WORLD TRADE  
ORGANIZATION   
WT/REG288/2 
12 September 2011  
 
(11-4382) 
Committee on Regional Trade Agreements Original:   English 
  
 
FREE TRADE AGREEMENT BETWEEN TURKEY AND SERBIA  
(GOODS) 
 
Questions and Replies 
 
 
 The following communication, dated 6 September 2011, is being circulated at the request of the delegations of Turkey and Serbia.  
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  This document reproduces the questions addressed to the Parties and the responses submitted.  
Question from the Delegation of Japan 
Trade Environment 
 
1. Japan would like to know whether it is im possible for Turkey to establish FTAs with 
other countries which have not concluded FT As with the EU due to the Turkey-EU 
Customs Union.  If it is impossible, under what  conditions and timing will Turkey be able to 
begin the negotiations with third countries?  Will it be possible only when the EU agrees for the 
start of negotiations with third countries, or will it have to be on a case-by-case basis? 
The Turkey-EU Customs Union constitutes the lega l basis of Turkey's free trade agreements 
(FTA) and autonomous preferential regimes. Unde r the Customs Union, Turkey shall align its 
commercial policy with the EU's Common Commercia l Policy. Together with the Common Customs 
Tariff, the preferential trade regime constitutes the most important part of the trade policy applied 
towards third countries. 
 
Article 54 of the Decision N° 1/95 of the Turk ey - EC Association Council on implementing 
the final phase of the Customs Union necessitates th e harmonization of Turkish legislation in areas of 
direct relevance to the operations of the Customs Union with Community legislation as far as possible. These areas of direct relevance include  commercial policy and agreements with third 
countries. 
 
Therefore, in order to ensure the smooth functioning of the Customs Union, Turkey negotiates 
and concludes FTA's with the third countries in parallel with the EU. In this respect, once the 
Commission receives the necessary mandate of the Eur opean Council to conduct negotiations with a 
third country , Turkey conveys its request to start FTA ne gotiations with that country immediately. 
 
Questions from the Delegation of the United States 
Import Duties and Charges, and Quantitative Restrictions 
Liberalization of Trade and Tariff Lines (Paragraph 16-17, pages 8-10) WT/REG288/2 
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  Annex I – Market Access Opportunities (Table AI.1-AI.2 Page 24) 
 
2. According to Paragraphs 16 and 17 and A nnex 1 of the Factual Presentation, Table 
AI.1-AI.2:  
 - Turkey eliminates tariffs on 83.6% of a ll tariff lines covering 85.9% of imports 
 from Serbia under the agreement.  Howev er, though 97.3% of industrial tariffs 
 are duty-free, only 13.9% of agricul tural tariff lines are duty-free under the 
 Agreement. 
  - Serbia eliminates duties on 75.7% of all tariff lines covering 90.8% of imports 
 from Turkey under the Agreement.  Howev er, though 95.2% of industrial tariffs 
 are duty-free, only 1.7% of agricultural tariff lines are duty-free under the 
 Agreement. 
  
(a) How do Turkey and Serbia explain the highly disproportionate liberalization 
between the industrial and agricultural sectors?  
Regarding bilateral trade between Turkey a nd Serbia in the year 2010, the agricultural 
products and the industrial products consist of approximately 13% and 87% of the total bilateral trade 
respectively. Taking into account sensitivity of the agricultural sector and its small share in total 
bilateral trade, the Parties preferred to liberalize ma inly their industrial sector. In this respect, Turkey 
abolished the customs tariffs on all industrial products originating in Serbia on the date of entry into 
force of the Agreement and Serbia will abolish those tariffs in six years after the Agreement enter into 
force. On the other hand, Parties exchanged concessi ons on selected agricultural products as an initial 
liberalization process.   
Article 11 of the Agreement states that “taking into account the role of agriculture in their 
respective economies, the development of trade in ag ricultural products between the Parties, the high 
sensitivity of agricultural products and the rules of th eir respective agricultural policy, the Parties shall 
examine in the Joint Committee the possibilities of granting further c oncessions to each other in trade 
in agricultural products”. Moreover, it is also possible to grant further concessions if the Parties 
consider that it would be useful and in the inter est of the economies of the Parties. In that sense, 
progressive liberalization for the agricultural products in the future may be provided. 
 
(b) How does Turkey and Serbia explain the lack of agriculture commitments in the 
FTA? 
The same explanation for paragraph (a ) above is valid for this question. 
 
(c) In light of the limited liberalization in the agricultural sector, could the Parties 
please explain how the level of tari ff elimination achieved meets the 
"substantially all trade" standard set out in GATT Article XXIV? 
According to GATT XXIV: 8, a free-trade area m eans a group of two or more customs 
territories in which the duties and other restrict ive regulations of commerce are eliminated on 
substantially all the trade between the constituent terr itories in products originating in such territories. 
 
In this sense, the Free Trade Agreement between Turkey and Serbia envisages an 
establishment of a free trade area between the Parties on substantially all their trade over a transitional 
period lasting a maximum of six years starting from date of entry into force of this Agreement in 
conformity with Article XXIV of the GATT 1994. In this respect, Turkey abolished the customs  WT/REG288/2 
 Page 3 
 
 
  tariffs on all industrial products originating in Serbia  on the date of entry into force of the Agreement 
and Serbia will abolish those tariffs in six years af ter the Agreement enter in to force. On the other 
hand, Parties exchanged concessions on selected ag ricultural products as an initial liberalization 
process.   
As a result of the concessions provided by the Agreement, Turkey’s 85.9% of total imports 
from Serbia became duty free upon the Agreement’s entry into force and Serbia’s 90.8% of total 
imports from Turkey will become duty free in six year s after the Agreement enter into force.  In this 
regard, substantially all trade requirement has been met.  Regulatory Provisions of the Agreement 
Standards 
Sanitary and phytosanitary measures (Page 18, paragraph 43) 
 3. Please explain what is meant by "within the spirit" (Article 12 of the Agreement)?  
Why did the Parties not use stronger language, su ch as "consistent with"?  Also, why have the 
Parties chosen to emphasize the "arbitrary or  unjustifiable discrimination or a disguised 
restriction of trade" from the WTO SPS Agreemen t preamble and not other elements of the 
Agreement? 
In the Preamble of the FTA between Turkey an d Serbia, the Parties present their commitment 
to the continual reinforcement of the multilateral tr ading system, and the provisions and instruments 
of the General Agreement on Tariffs and Trade 1994  and the World Trade Organization as a basis for 
their foreign trade policy. The Article 12 of the Ag reement reaffirms the will of the Parties to apply 
their sanitary measures within the rules and pr ocedures of the GATT 1994 and the WTO Agreement 
on Application of Sanitary and Phytosanitary Measures without any discrimination. Therefore, although it has been stipulated as “within the spirit” in  the Agreement, it is clear that the Parties are 
committed to apply their SPS measures in consiste nt with the WTO SPS Agreement in pursuant with 
their respective commitments under the WTO. 
  
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