RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/TPR/G/192 
5 November 2007  
 
(07-4735) 
Trade Policy Review Body Original: English 
   
 
  
 
TRADE POLICY REVIEW 
 
Report by 
 
TURKEY 
 
  
 
Pursuant to the Agreement Establishi ng the Trade Policy Review Mechanism 
(Annex 3 of the Marrakesh Agreement Establishing the World Trade 
Organization), the policy statement by Turkey is attached. 
 
 
Note: This report is subject to restricted circ ulation and press embargo until the end of the first 
session of the meeting of the Trade Policy Review Body on Turkey. Turkey WT/TPR/G/192 
 Page 3 
 
 
CONTENTS 
  Page 
I. INTRODUCTION  5 
 (1) O VERVIEW  5 
 (2) M ACROECONOMIC POLICIES AND DEVELOPMENT  6 
 (i) Public financing and debt management 6 
 (ii) Inflation and monetary policy 7  (iii) Enhancement of the private sector's role in the economy 9 
 (iv) Financial sector reforms 12 
II. TRADE POLICIES  13 
 (1) I
MPLEMENTATION OF WTO  AGREEMENTS  13 
 (i) Trade in goods 13 
 (ii) Services 17  (iii) Trade-related intellect ual property rights (TRIPs) 18 
 (2) T
URKEY 'S ACCESSION PROCESS TO THE EU 20 
 (i) Recent developments in Turkey-EU relations 20  (ii) Turkey's current status of harmonization with the EC policies 21 
III. DEVELOPMENTS IN TURKISH FOREIGN TRADE 27 
 (1) O
VERVIEW OF STRATEGIES  27 
 (2) T RADE DEVELOPMENTS BY REGIONS , COUNTRIES , REGIONAL ORGANIZATIONS  
  AND SECTORS  28 
 (i) By regions and countries 28 
 (ii) By regional organizations 30 
 (iii) By sectors 31 
APPENDIX TABLES  33 
 
 Turkey WT/TPR/G/192 
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I. INTRODUCTION 
(1) OVERVIEW  
1. A steady strong growth has been the distinc tive feature of the Turkish economy during the 
period 2003–07. The economic pr ogram distinguished by tight fiscal and monetary policy 
implemented through decisive actions at the backdr op of political stability has led to a remarkable and 
multifaceted transformation in all sectors. The struct ure of growth has also improved significantly as a 
result of increasing private sector investment, cap ital accumulation and total factor productivity. 
2. Fiscal discipline became one of the corner stones of the ongoing economic program and 
played the leading role in maintaining macroe conomic stability by decreasing debt burden. This 
policy and its offspring successful debt management st rategy have been some of the foregoing factors 
that led to the impressive track record of the Turk ish economy in the past four years.  The reaction of 
the Turkish economy to the financial turmoil of 2006 and the more recent fluctuations in the financial 
markets, proved once more the rightness of the tenets underlying the economic program; the Turkish 
economy remained intact and stable though with ne w balances in the exchange and inflation rates. 
3. A persistent problem of the Turkish economy, the high level of net public debt, has fallen 
significantly; while the average annual primary surp lus, one of the main indicators of the fiscal 
discipline, has been realized in more than satisfactory figures.  
4. The durable fiscal adjustment h as also been crucial in convincing the markets of the prudent 
economic policies. Through this channel, the risk  premium and cost of public borrowing declined 
considerably. Also worth noting is that, while the debt stock fell relative to Gross Domestic Product 
(GDP), its structure has improved at the same time . The maturities extended and the foreign exchange 
denominated component of the debt decreased.  
5. In addition to the fiscal discipline, the other keystone of the economic program; tight 
monetary policy and the inflation targeting strate gy in particular has paved the way for equally 
striking results. Most remarkably, in 2004, single dig it inflation rate was achieved for the first time in 
more than 30 years and consumer price index (CPI) inflation decelerated below the targeted levels. 
Although various supply shocks (b eginning from April 2006 and financial turmoil in May-June 
period) has led to an accelerated inflation; po licy measures, taken to ensure the convergence of 
inflation to the target, proved to be effective a nd annual CPI inflation followed a downward path in 
the last quarter of 2006.  
6. On the other hand, booming investment, increase in imports of capital and intermediate goods 
as a result of the shift towards capital and technology intensive products in manufacturing industry 
and finally the increase in energy prices after 2004 ha ve been the factors that adversely affected the 
current account deficit during the 2003-2006 period.  The strengthened domestic currency increased 
the substitution opportunities between domestically  produced raw materi als and imported goods, 
which in turn contributed to the increasing trend of the current account deficit.  
7. However, one of the factors that led to the widening of the deficit, i.e. flourishing investment, 
has at the same time work ed adversely to offset its impact in the total balance of payments account. 
The astonishing increase in the amount of foreign direct investment (FDI) over the last 3-4 years eased the negative externalities of the current account deficit. 
8. The level and quality of the external financing kept improving in this period. The share of 
non-debt creating capital flows has risen quite signifi cantly with an upward trend, especially in FDI, 
while there has also been a signifi cant shift in the structure of financing from short-term to long-term. WT/TPR/G/192 Trade Policy Review 
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(haz eko ara ş ve anl gnm) Due to the improvement in investment environment and banking sector, the 
FDI hit record high level in 2006, in the forms of acquisitions in private sector, progress in privatization and acceleration in Greenfield investments  
9. Performance of the banking sector has been  supporting the overall macroeconomic success 
during 2003-06 period. Banks have  begun switching their asset portfolios mostly towards loans 
instead of holding government securities. This change  in the balance sheets of banks obviously led to 
significant improvement in the financial intermedia tion role of the banking sector in the economy.  
10. The aforementioned balance sheet demonstrat es how far the Turkish economy improved over 
the last four years from a crisis-hit country trying to recover, to a stable, resilient and flourishing 
market.  
(2) M
ACROECONOMIC POLICIES AND DEVELOPMENT  
11. In response to determined macroeconomic po licy implementations, prominent results have 
been achieved in production with continuously gr owing real GDP throughout the 2003-06 period. In 
the mentioned timeframe, real GDP grew by 31 ,3% on a cumulative basis and 7,0% on average 
making the Turkish economy one of the fastest grow ing economies in the world. Moreover, Turkey’s 
per capita GDP has risen above US$5,000 in 2005 fo r the first time ever and continued to rise to 
US$5,482 in 2006.  
12. Impressive developments on the macroeconomic si de of the program have been fortified by 
actions that addressed challenging micro-level issues  which have also had macro-level ramifications. 
Below are the policy actions taken in certain signi ficant realms of the economy that have had the 
accumulative effect of impressive success of the overall balance sheet. 
(i) Public financing and debt management 
13. The Law on the "Organization of the Public Fi nancing and Debt Management" was put into 
effect in April 2002 (Law No. 4749) in order to increase fiscal discipline, transparency, accountability 
and the effectiveness in the management of debt  and claims, a central objective of the economic 
program.  
14. Turkey took important steps on tax policy and ta x administration with a view to increase the 
tax base in the country in order to allow for lower ge neral rates. With this perspective, corporate and 
personal income tax reforms, wh ich simplified the tax system and improved the tax base while 
allowing for lower rates, have been put in place in  2006 and 2007. Regarding th e tax administration, a 
new semi-autonomous Revenue Administration was established to increase the revenue collection 
capacity and enhance enforcement. A Large-Taxpaye rs Unit was also established within the Revenue 
Administration to better serve the needs of the la rgest taxpayers. These steps were complemented by 
the foundation of Tax Policy Unit which is specialized on policy development. 
15. Turkey has also been working on a comprehensiv e reform on the Social Security System. The 
structural disorganization has been overcome vi a Law No: 5502 (16 May 2006) that unifies the three 
separate institutions under the newly founded Social Security Institution. The reorganization has been 
followed by the reform in pension systems and univer sal health insurance, which is regulated by Law 
No. 5510 (31 May 2006). However, as the enforc ement of this Law has been postponed from 
January 2007 to January 2008 upon the annihilation of certain  articles by the Constitutional Court, 
Turkey is still working on the necessary amendments  to this Law. The reform aims to decrease the 
burden of the social security system from 4,5% of the GDP to 1% via a new pension scheme and 
universal health insurance. Turkey WT/TPR/G/192 
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16. Furthermore, Turkey engaged in comprehens ive public sector governance reforms, starting 
from the year 2000 with the aim of increasing the efficiency of the overall public expenditures and service quality. In this regard, the Financ ial Management and Control Law No. 5018 
(10 December 2003) was introduced. With this Law,  the scope of financial management and budget 
was enlarged; principles of accountability and fiscal tr ansparency were streamlined; strategic planning 
and performance-based budgeting was introduced, multi-y ear budgeting was also introduced within 
the medium-term expenditure framework; and lastly , unity of accounting in the public sector and 
periodic publication of the comprehensive fiscal statistics were ensured.  
17. As an expected outcome of all the above -mentioned policy actions, Turkish economy has 
undergone structural changes over the past 5 years.  Debt stock ratios have lowered subsequently 
improving the economic indicators. The net public de bt to Gross National Product (GNP) ratio fell 
from 90,4% in 2001 to 45% in 2006 with an aver age 9,1 point decrease each year, and the gross 
external debt to GNP ratio dropped from 78% in 2001 to 51,9% in 2006. 
18. The average annual public sector primary surplus,  on the other hand, has been above 6% of 
the GNP over the last four years, while the ratio of budget deficit to GNP declined from 11,3% in 
2003 to 0,8% in 2006. 
19. The developments of the past five years pr ove that reducing the public debt ratio and 
maintaining the economic growth prim arily depends on strict control of public finance. In this respect, 
high primary surplus target rate was set as one of the central planks of the Medium Term Program of 2007-09.  
20. The medium term debt management strategy was introduced in the beginning of 2007 by the 
Debt Management Committee to further reduce the public  debt stock ratio and its risks. According to 
this strategy, the domestic cash borrowing will be made  mainly in the New Turkish Lira (YTL), fixed 
rate instruments will be used as a major source in YTL borrowing and the average maturity of 
domestic cash borrowing will be increased by market conditions. 
21. In addition to the decrease in the public debt  stock ratio, interest and foreign exchange 
sensitivity of the debt stock has declined as a resu lt of prudent debt management policies in recent 
years. Floating rate and foreign currency denominat ed proportions of total public debt stock have 
decreased significantly.  
(ii) Inflation and monetary policy  
22. The Central Bank of the Republic of Turkey  (CBRT) continued to implement implicit 
inflation targeting together with a floating exchange  rate regime in years 2003, 2004 and 2005 so as to 
achieve and maintain price stability. To this end, th e short-term interest rates were the main policy 
instruments while, at the same time, Base Money and the Net International Reserves (NIR) were 
monitored as performance criteria and the Net Dom estic Assets (NDA) as the indicative target, in 
compliance with the economic program conducted w ith the International Monetary Fund (IMF). 
23. A glance at the consumer price developmen ts in the Turkish economy during implicit 
inflation targeting period reveals a strong momentum of disinflation with the help of the prudent fiscal 
and monetary policies and also structural reforms.  The annual CPI inflation declined from 68,5% at 
the end of 2001 to the single digits, 9,3% at the end of 2004 and annual infl ation remained below the 
official end-year targets for four-consecutive years.  Furthermore, this progress has been coupled with 
a strong growth performance- 7.5% on average fo r the period between 2002 and 2005. Inflation 
expectations maintained a favourable course under the cautious stance of monetary policy, strong 
determination of the government on stru ctural reforms and fiscal discipline.  WT/TPR/G/192 Trade Policy Review 
Page 8 
 
 
24. Thus, The year 2005 was announced as the "trans ition year" to the full-fledged inflation 
targeting regime due to two im portant developments: First of these was the currency reform of 
dropping six zeros from the Turkish lira, hence the YTL. With this reform, the CBRT indicated its confidence on the permanency of the achievements made during implicit infl ation-targeting period, 
which in turn, enhanced the credibility of the m onetary policies further. Secondly, the new price 
indices were introduced by the Turkish Statistics In stitute, according to which, both the base year and 
calculation methodology of the CPI index have changed.  
25. The full-fledged inflation-targeting regime w as launched at the beginning of 2006. In this 
framework, the year-end targets were announced as 5%, for 2006 and 4% for 2007 and 2008 at the 
end of 2005 together with the government. Besides, th e quarterly path of inflation for 2006, consistent 
with the year-end targets with an uncertainty band of  2 percentage points on both sides was publicized 
for the purpose of accountability.  
26. However, as a reaction to the volatility in fina ncial markets in May-June 2006 period and the 
consequent rise in inflation expectations, the CBRT implemented a two-pillar strategy. The first pillar 
of the policy reaction was the 400 basis points interest  rate hike in June 2006. Together with the 
further 25 basis points increase in July 2006, rais ing the overnight borrowing rates to 17,50%, the 
CBRT aimed at containing the second round effects of the exchange rate pass-through and eliminating the gap between inflation expectations and the medi um-term targets. This gave the markets a clear 
signal that the CBRT was determined in its commitm ent to the medium term inflation targets. The 
second pillar, on the other hand, was a set of meas urements taken to manage the YTL and foreign 
exchange liquidity in the market.  
27. These policy measures confirmed the adherence of the CBRT to its medium-term 
commitments, and hence they were well received by the markets. As a consequence, financial markets 
stabilized and the YTL rebounded. Meanwhile, the dete rioration in inflation expectations stopped in 
July, although they remained well above the medium term target of 4%. On the other hand, the risk 
premium, supported also by the favourable global conditions, declined by almost 100 basis points 
between end-June and end-A ugust. In this period, the market inte rest rates also displayed a declining 
trend. 
28. In the second half of the year 2006, the contri bution of the domestic demand conditions to the 
disinflation process increased while the internati onal liquidity conditions improved. However, the 
CBRT maintained the tight stance of the moneta ry policy through the rest of the year.  
29. As a result of these developments, the annual CP I realization at the end of the year 2006 was 
9,65%, breaching the upper limit of the uncertain ty band announced as 7% for end-2006.  
30. Even though the target for 2006 was missed, th e CBRT preferred to keep the 2007 target at 
4%. Taking into account the structural transformation of the economy, the transition from chronic high inflation to low inflation, and the real conve rgence process, a target of around 4% is considered 
appropriate for the medium-term. Therefore, inflation target for 2009 was also set as 4%. 
31. The effects of the monetary tightening in 200 6 on inflation started to be seen in 2007. 
Although the lagged effects of exchange rate deprecia tion continued in the first half, the considerable 
slowdown in the domestic demand is the main fact or curbing the increasing inflation. As of 
June 2007, the annual inflation declined to 8,6% from its peak of 11,7% in July 2006. Thus, by the end of the second quarter, the annual inflation remain ed within the uncertainty band. The effects of 
monetary tightening are clearly visible on prices of services and durable goods. On the other hand, the 
high course of annual inflation partly owes to the elevated unprocessed food prices and the hikes in Turkey WT/TPR/G/192 
 Page 9 
 
 
the prices of tobacco products. Moreover, although  the lagged effects of the exchange rate pass-
through have moderated, some cumu lative impact still remains.  
32. In light of these developments, the CBRT has ma intained its tight policy stance in the first 
half of the year 2007 and kept the overnight borro wing interest rates at 17,50%. Annual inflation is 
expected to continue to decline in the second ha lf of the year 2007 due to the lagged effects of 
monetary tightening.  
Box 1. Floating Exchange Rate Regime  
 
Along with the inflation-targeting regime, the CBRT ha s implemented floating exchange rate regime since 
February 2001. Under this framework, exchange rates are determined by the demand and supply conditions in 
the foreign exchange market and the CBRT does not target any level of exchange rates. However, the CBRT 
retains the option of using discretionary intervention to prevent excessive exchange rate volatility. Besides, the 
CBRT may conduct foreign exchange purchase auctions, the terms and conditions of which are announced in 
advance, to improve the international reserve position conditional on the strength of the balance of payments 
position and the reverse currency substitution.  In this context, the CBRT has purchased a total net amount of 
US$48,794 millions since 2003 and substantially increas ed its foreign exchange reserves. The CBRT’s gross 
foreign exchange reserves have amounted to US$68,3 b illion in June, US$68,8 billion in July, and US$71,9 in 
August 2007.  
 
(iii) Enhancement of the private sector’s role in the economy 
(a) Improvement of the investment environment  
33. Turkey’s efforts to attract foreign direct inv estment in amounts commensurate with its market 
size and economic potential have received fruitful results since the last TPR.  
34. The process starting with the studies undertaken1 to identify the main investment barriers and 
the ensuing Decree on Improving the Investment C limate in Turkey (11 December 2001) which then 
resulted in the establishment of the Coordination Council for the Improvement of the Investment 
Environment (CCIIE), has been a defining st ep in Turkey’s investment efforts.  
35. Despite the initial emphasis on FDI, the CCIIE program aimed "to streamline the investment 
environment and attract more private direct dom estic and foreign investment" from the outset. The 
CCIIE process therefore has not been limited narrowly to foreign investment but has been assisting in 
improving the business and investment environment for private domestic investors as well. So far, the activities of the CCIIE have been quite successful . The Government has taken several steps in 
compliance with the recommendations of the Counc il and enacted 20 laws, including a very liberal 
Foreign Direct Investment Law and Company Registration Law among others.  
   
                                                     
 
1 To analyze the reasons for Turkey’s underper formance in attracting FDI, three studies were 
undertaken in 2001 and 2002 by the World Bank/ IFC "Foreign Investment Advisory Service" (FIAS): A 
diagnostic study of Turkey’s overall investment environment, a study focusing on administrative barriers to 
investments and a third study setting out the framework for an investment promotion strategy and recommending the creation of an investment promotion agency. WT/TPR/G/192 Trade Policy Review 
Page 10 
 
 
Box 2. Enacted Laws as a result of the CCIIE Process: 
 
The Law for the Recruitment of Expatriates (4817) 
Labor Law (4857) 
Foreign Direct Investment Law (4875) 
Company Registration Law (4884) 
IŞKUR (Employment Agency) Law (4904) 
Land Acquisition and Site Development Law (4916) 
Law on Fighting Smuggling (4926) 
Law on Social Insurance for Self-Employed and Artisans (4956) 
Law on Amendments of the Law on  Encouragement of Tourism (4957) 
Law on Social Insurance for Workers (4958) 
Turkish Patent Institute Law (5000) 
Law on the Inflation Accounting (5024) 
Law on the Protection of Intellectual and Industrial Property Rights (5117) 
Trademark Law Agreement (5118) 
Law on Protection of Topographies of the Integrated Circuits (5147) 
Mining Law (5177) 
Changes about Definition of SMEs in the Law of Min. of Ind. And Trade (5331) 
Law on the Establishment of the Investment Support and Promotion Agency of Turkey (5523) 
Corporate Income Tax Law (5520) 
Law on Withholding Taxes on Capital Gains (5527) 
 
36. In addition to CCIIE, Investment Advisory Council of Turkey was established in 2004 to 
provide an assessment of business climate from an in ternational perspective for further improvement 
of business environment.2 Since 2004, the Council has convened once a year, holding its last meeting 
on 11 June 2007. So far, concrete steps have b een taken in line with the recommendations of the 
Council such as simplifying the tax regime, strengthening corporate governance, reducing 
administrative and bureaucratic barriers, accelerati ng the privatization progr am and, reforming the 
social security system. 
37. Furthermore, Investment Support and Promotion Agency of Turkey (TISPA) was established 
in July 2006 to fulfil the corporate capacity need ed in the effective prom otion of the investment 
opportunities in Turkey. TISPA will define and implement investment support and promotion 
strategies to encourage international investors to invest in Turkey. 
38. As a result of the general improvement of th e Turkish economy as well as the reform program 
to improve business environment, FDI inflows to Tu rkey started to increase in 2003 and reached to a 
record high level in 2006. 
39. According to the balance of payments statistics of the Central Bank of Turkey, total value of 
FDI inflow reached US$20,070 million in 2006, with a 104% increase relative to the 2005 value of US$9,803 million.
3 
40. Moreover, a considerable increase in the num ber of companies with foreign capital was 
witnessed since the Foreign Direct Investment Law came into effect.4 
                                                      
2 This Council is chaired by the Prime Minister, and composed of Ministers in charge of investment-
related issues, the CEOs of multinational companies with  investments in Turkey, high-level representatives of 
international organizations, such as IMF, the World Bank and the European Investment Bank, as well as the 
heads of leading Turkish Business Associations. 
3 See Annex 1, for Table 1: FDI Inflows and Their Distribution by Components Between 1995-06. Turkey WT/TPR/G/192 
 Page 11 
 
 
(b) Privatization  
41. Turkey aims at further enhancing her functi oning market economy through ensuring openness 
and competitiveness; upgrading productivity; strengt hening the investment climate-attracting much 
more Foreign Direct Investment-encouraging priv ate initiative/entrepreneurial skills and as a result 
promoting employment. 
42. Therefore, major legislative changes took place in  Turkey in recent years such as Electricity 
Market Law, Natural Gas Market Law, Telecommuni cations Law, Sugar Law, Tobacco Law, Banking 
Law, Petroleum Market Law, Foreign Direct I nvestment Law, Company Law, Law concerning the 
elimination of FDI restrictions in some sectors, Law regarding several amendments which is aimed at 
accelerating privatization, and provisions au thorizing real estate purchases to foreigners. 
43. As a result, unprecedented privatization proceed ed and the noticeable increase in foreign 
investor interest has been observed. While ove rall earnings from privatization in 2005 (on a 
commitment basis) reached US$12,5 billion, the amount of proceeds (on a commitment basis) as of 
31 December 2006 has reached US$8,1 billion.  
44. Substantial portion of the total privatization fl ows, on a commitment basis, both in 2005 and 
2006 arise from big-ticket items such as TURK  TELEKOM (Telecommunications, 55%), TÜPRA Ş 
(Petroleum Refining, 51%), ERDEM İR (Iron and Steel, 49.29%), ATATÜRK AIRPORT (Airport 
operations, Operating rights of 15.5 years), VAKIFL AR BANKASI (Banking, Initial Public Offering 
/ 25,18%), TÜPRA Ş (sale channelled through ISE to an Institutional Investor Fund, 14,76%), ET İ 
ALÜMİNYUM (Bauxite/Aluminum production, 99,99%), PETK İM (Petrochemicals, Secondary 
Public Offering / 34,5%), BA ŞAK Companies (Insurance & Retirement Fund, Various Stakes), THY 
(Turkish Airlines, Public Offering / 28,75) and ATAKÖY Group of Companies (Tourism including marina operations, all of the state-owned shares).  
45. In addition, Turkey has also initiated the pr ivatization process of the seaports and already 
launched the tender processes of Mersin, Derince and İzmir Ports. The tender for the transfer of 
management rights of Mersin Port (located on the Me diterranean coast of Turkey), which is an asset 
of Turkish State Railways Administration, for a period of 36 years were held on 12 August 2005. The 
highest bid was given in an amount of US$755 million. The Concession Rights Agreement was signed on 12 May 2007.  
46. On the other hand, the negotiations for the transf er of operational rights of Izmir Port (located 
on the Aegean coast of Turkey), which is an asset  of Turkish State Railways Administration, for a 
period of 49 years has been completed on 3 May 2007. The highest bid was given in an amount of 
US$1.28 billion. The approval process about the tender is ongoing.  
47. Hence, during the period beginning with 2003 until July 2007, the privatization 
implementations of Turkey have resulted in a ne t worth of approximately US$30 billion (excluding 
both of Istanbul Sabiha Gökçen & Antalya Airports Operations).
5 
48. Privatization process will continue unabated between the years 2007–09. The big ticket items, 
in sectors of petro-chemicals, tobacco and tobacco products, lottery games, civil aviation, electricity 
distribution, power generation,  harbor/seaport operations, suga r processing, cruise port/tourism 
                                                                                                                                                                     
4 See Annex 2, for Table 2: The Number of Companies Established with Foreign Capital. 
5 See Annex 3, for Table 3: Privatization Implementations by Years. WT/TPR/G/192 Trade Policy Review 
Page 12 
 
 
complex, mining, banking, toll road construc tion, maintenance and repair operations, and 
telecommunications are planning to be privatized in this period.6   
(iv) Financial sector reforms  
(a) Banking sector reforms 
49. Banking Law: (November, 2005) There have been significant reforms in terms of regulation 
and supervision in the last few years. Upon a pproval of the new Banking Law which touches upon 
issues such as risk based superv ision, capital adequacy and provisioning, full-fledged secondary 
regulations were issued in late 2006. These reform s further converged Turkish banking system with 
the international best practices and th e European Union (EU) standards.  
50. Strengthening the Banking System: The credit in termediation role of the banking sector is 
improving with the support of the reforms in th e sector and declining public sector borrowing need. 
The ratio of credits to assets has increased from 23% in 2002 to 44% in 2006. Although the amount 
and ratio of loans have increased, the total credit to  GDP ratio in Turkey is still one of lowest in 
Europe.   
51. Improved Banking Soundness Indicators: The high  capital adequacy ratio of 22,4% and low 
gross non-performing loan ratio of 3,8% in 2006 are two indicators of the high asset quality in the 
Turkish banking system. Additionally, the foreig n exchange position of the banking sector is quite 
low. Most recently, the required capital adequacy ra tio has been increased to 12% for banks which 
desire to open new branches and general provision s has been increased to 1% for new loans. 
52. Increased Foreign Participation and Privatizati on: In parallel with the improvements in the 
banking business, there have been significant changes in the ownership structure of the banking sector 
in terms of increased foreign participation and de clining state ownership. With strong growth 
potential of the economy and the sector, Turkish ba nks have become more attractive for foreign 
investors. Total share of foreign participation in  the banking sector capital has increased from 4,3 in 
2004 to 22,4% in 2006 through mergers and acquisitions in the last years. On the other hand, there are 
important steps to further reduce the public sector’s  share in the banking sector. Upon completion of 
the financial and structural restructuring of stat e banks, privatization process has been initiated. In 
parallel with this strategy, two state banks have gone through successful IPO (Initial Public Offering) 
processes. 
(b) New mortgage law (February, 2007): 
53. The new Mortgage Law has brought in new oppor tunities for long-term funding and helped 
banks to better manage their portfolios. This la w lays the legal basis for a more efficient and 
financially stable mortgage lendi ng system, by allowing mortgage finance institutions, securitization 
of housing loans and variable rate mortgages.  
(c) New insurance law (June, 2007): 
54. The new Insurance Law is another important ach ievement in the financial sector. With the 
law, the insurance sector further complies with th e EU standards and international best practices on 
issues such as minimum capital, fit and proper requireme nts, direct licensing, and changes in control.   
                                                      
6 See Annex 4, for Table 4: The Privatiza tion Program In Big-Ticket Items (2007-09). Turkey WT/TPR/G/192 
 Page 13 
 
 
II. TRADE POLICIES  
55. The objective of Turkey’s trade policies at all leve ls is to effectuate the principle of "free and 
fair trade" in its relations. The World Trade Or ganization (WTO), which regulates the course of the 
multilateral trade system, and the ongoing Doha Deve lopment Round negotiations are considered as 
invaluable platforms by Turkey to voice its concerns and endorse its interests. 
56. The Customs Union established with the Europ ean Community (EC) in 1995, which came 
into force in 1996 right after the completion of the Uruguay Round has also been a cornerstone in 
Turkey’s trade policies. The EC’s determining infl uence in Turkey’s trade relations has intensified 
even more with the beginning of the full membership process. 
57. Turkey also makes efforts to achieve a liberalized world trade and beginning from its region, 
works to enhance its commercial and economic relations  with its neighbours. Turkey expects its trade 
policy to contribute to the economic and also political stability in its region. Towards that end, Turkey 
also pursues ambitious trade agendas from a regiona l perspective in organizations such as Economic 
Cooperation Organization (ECO), Black Sea Economic  Cooperation (BSEC), Organization of Islamic 
Conference (OIC) and Developing-8 as a member. 
(1) IMPLEMENTATION OF WTO  AGREEMENTS  
(i) Trade in goods 
58. The Import Regime of Turkey reflects national economic needs and Turkey’s rights and 
obligations arising from the WTO Agreements, the Cu stoms Union with the EC and other bilateral, 
regional and multilateral agreements incl uding free trade agreements (FTA). 
59. In scope of the Turkish Import Regime, import of goods is free. However, import of some 
products is subject to restrictions on the grounds of  public morality, public order or public security, 
and the protection of health of humans, animals and plants. 
60. The Turkish tariff structure is transparent and si mple. With respect to taxes and fiscal charges, 
Turkey’s import regime has been totally simplifie d. There is no seasonal or temporary customs duty 
for any good. 
61. The clarity of the Import Regime is ensure d by indicating the rates of customs duties 
separately for countries and country groups; and by  classifying the products under six lists; namely, 
agricultural products (List I), industrial products (L ist II), processed agricultural products (List III), 
fish and fishery products (List IV), the suspension lis t (List V), and list of goods used in civil aircraft 
eligible to relief from customs duties (List VI). 
62. These lists are made available to the public in  the Official Gazette in the beginning of each 
year. They are also released in the official website  of the Undersecretariat of the Prime Ministry for 
Foreign Trade (UFT) as well. 
63. The most recent changes in the import regi me were introduced with the Import Regime 
Decree for the year 2007, which was published in the Official Journal (No: 26392 bis) on 
30 December 2006. The Import Regime Decree of 2007 has been prepared by taking into 
consideration the Agreement Establishing the WT O, the Customs Union Decision (CUD), the free 
trade agreements with various countries, the pr eferential treatments gran ted under the Generalized 
System of Preferences (GSP) to developing, l east developed and special incentive arrangement WT/TPR/G/192 Trade Policy Review 
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countries, and also the needs and demands of the agricultural and industrial sectors in accordance with 
the objectives determined by the development plans and annual programs. 
(a) Non-agricultural products 
64. As a participant to the Uruguay Round negotia tions and a signatory of the Agreements 
indicated in the annexes of th e Agreement establishing the WTO, Turkey has undertaken tariff 
reductions on industrial and agricultu ral products to be implemented gra dually. In addition, as a result 
of the Customs Union with the EC, Turkey bega n to apply the Community’s Common Customs Tariff 
(CCT) on the imports of industrial goods from thir d countries, which is far below its Uruguay Round 
bound rates. Thus, with the Customs Union, Turkey ’s simple average protection rate for the third 
countries declined from approximately 15% to 4,2% in 2007. This rate is zero for the EU and EFTA 
countries since 1996. Hence, despite its developing c ountry status in the WTO, Turkey has embarked 
on one of the most comprehensive tariff reductions among member countries.  
65. Moving from this picture, Turkey expects amb itious results from the Doha Round in terms of 
genuine market access opportunities, which can be realized through the simple Swiss formula, 
harmonizing the tariff rates of the member countries.  
66. An essential component for a harmonizing result  is definitely reaching a well-calculated 
balance between the formula and th e flexibilities. In addition, achieving 100% binding rate for all 
Members is another important objective to attain for Turkey  
Information technology products  
67. Being one of the 70 participant countries to  The Ministerial Declaration on Trade in 
Information Technology Products (ITA), signed on 13 December 1996 in Singapore at the conclusion 
of the first WTO Ministerial Conference, Tu rkey committed to phase out customs duties on 
information technology products as of 1 January 2000 . Turkey has completed the integration stages on 
1 January 1998 before the deadline.  
Preferential treatment for LDCs  
68. As part of the Customs Union Decision, Turkey  has been aligning its Generalized System of 
Preferences with the EC's.7 Duties on products under the CUD are entirely eliminated for the least 
developed countries in line with the Everything Bu t Arms (EBA) Initiative of the EC GSP Scheme. In 
compliance with the agreement with the EC, Turkey  also grants further preferences to selected 
15 countries under the Special Incentive Arrange ments for Sustainable Development and Good 
Governance. Beneficiary countries are announced annually in the Annexes of Turkey's Import 
Regime.  
(b) Agricultural products  
69. Within the framework of Agreement on Agricultu re, Turkey has bound all of its tariffs for the 
agricultural products in 1995. According to the Sche dule of Commitment List (Schedule 37) attached 
to this Agreement, Turkey has made 10% mini mum cut per product and 24% average cut for all 
agricultural products between the period 1995 and 2 004. As a result, Turkey has reached the bound 
rates in 2004. The average customs duty for agricultural products by 2006 is 59,2%.  
                                                      
7 See also Paragraphs 123-124 on GSP Regime of Turkey. Turkey WT/TPR/G/192 
 Page 15 
 
 
70. On the other hand, decisive steps have been taken since 2001 by the Ministry of Agriculture 
and Rural Affairs (MARA) in order to deal with  the structural problems of the sector through a 
multifaceted reform process. In November 2004, Tu rkey has prepared Agricultural Strategy Paper – 
ASP (2006-10), building on the formerly enacted AR IP (Agricultural Reform Implementation Project, 
2001-05) for shaping an organized, competitive and sustainable agriculture sector that utilizes 
resources efficiently. With the enactment of ASP, the implementation of ARIP has been extended to 
the end of 2008. ARIP is a policy tool to support farmers with an appropria te social and economic 
safety net while putting in force a new agricultu ral support system, which aims to increase 
productivity in the sector. In the context of the refo rm package, measures have been taken in four 
main areas: (i) withdrawing the State from direct involvement in production, processing, and 
marketing of crops; (ii) reducing output interven tion purchases financed from the budget leading to 
price cuts; and phasing out price support and credit subsidies, and their replacement by a less distorting direct income support (DIS) system to farmers based on a uniform per hectare payment (about US $90/ha), and (iv) making available one-time transition grants to farm ers, switching out of 
crops and suffering excess supply, such as hazelnuts and tobacco, to assist them covering their 
transitional costs, and facilitating the transition to efficient production patterns. The ARIP, which is 
restructured by the ASP, is supported by a Worl d Bank Loan Agreement. This process enriched the 
ARIP with new sub-components such as rural deve lopment activities and agri-environmental policies. 
Land Consolidation actions, Village  Based Participatory Investme nts program, Licensed Warehousing 
investments, Conservation of Agricultural Lands for Environmental Purposes (CATAK) are projects 
started in this context. 
71. Besides, in April 2006, Turkey has adopted Agriculture Law (Law No. 5488) to establish 
required policies for developing agricultural sect or and rural areas. The support instruments 
determined by the Agriculture Law are in lin e with the Agricultural Strategy Paper.  
72. Turkey highly prioritizes the ongoing Doha De velopment Round negotiations on agricultural 
products. Agriculture is one of the dominant sectors in the Turkish economy with its 27% share within 
the total employment. However, in comparison to the other sectors with respect to employment, the 
income of those employed in the agricultural sector remains extremely low. Therefore, the results of 
the negotiations will not only have economic but also social-adjustment impacts. In case of the market 
access, as tariffs are the only instruments to sust ain agricultural production in Turkey like most 
developing countries, a gradual liberalization pr ocess and some complementary instruments to 
minimize the possible negative impacts of liberaliza tion are expected. In that sense, Turkey fully 
believes in the necessity of Special Products (SP) and Special Safeguard Mechanism (SSM). 
(c) Rules 
Anti-dumping and subsidies/safeguards  
73. Turkey enacted its first anti-dumping and subsid y legislation (Legislation on the Prevention 
of Unfair Competition in Imports) in 1989, which was comprised of the Law on the Prevention of 
Unfair Competition in Imports (Law No. 3577); Th e Decree on the Prevention of Unfair Competition 
in Imports (Decree No. 89/14506); and the Regulati on on the Prevention of Unfair Competition in 
Imports, which took effect on 1 October 1989. Purs uant to Article 90 of the Constitution of the 
Republic of Turkey; the Agreement on the Implementa tion of Article VI of the General Agreement on 
Tariffs and Trade 1994 and the Agreement on Subs idies and Countervailing Duties of the WTO, on 
which the legislation is based on, constitute an inte gral part of the Turkish national legislation.  WT/TPR/G/192 Trade Policy Review 
Page 16 
 
 
74. Certain imperative amendments were made in the Legislation on the Prevention of Unfair 
Competition in Imports became imperative, follo wing the outcomes of the Uruguay Round and the 
Customs Union established with the EC.8  
75. The amendments introduced by the Law on the Prevention of Unfair Competition in Imports 
No. 4412 set forth new rules and procedures to be  followed during the course of anti-dumping and 
anti-subsidy investigations, to counteract injury caused by dumped or subsidized imports. The amendments introduced by the Decree No. 2005/9840 brought new rules pertaining to the prevention 
of circumvention of anti-dumping duties which are of significant importance to sustain the effective functioning of the legislation against injurious dumped or subsidized imports. The amendments 
introduced by the Regulation on the Prevention of Unfair Competition in Imports relate to two main 
areas: namely, rules concerning imports from non-ma rket economies, published on 2 June 2002; and 
rules and procedures to be followed during anti-ci rcumvention investigati ons, interim and expiry 
reviews, refund and other investigations published on 26 January 2006. All am endments were notified 
to the Committee on Anti-Dumping Practices a nd Committee on Subsidi es and Countervailing 
Measures of the WTO.  
76. Turkey also has had Safeguard Legislation in  compliance with the Agreement on Safeguards 
of the WTO since 1 June 1995. After the accessi on of People’s Republic of China to the WTO, 
Turkey amended its legislation according to the Ar ticle 16 of the Accession Protocol on 28 May 2003. 
(d) Technical barriers to trade  
77. Turkey has been implementing The Agreement on Technical Barriers to Trade of the WTO 
since 1 January 1995, in line with which, an Enquiry Point was also set up.  
78. In order to render the distribution of notificati ons timely and effective,  and information about 
draft regulations easily accessed by all actors of tr ade, the notifications have been exchanged by 
means of electronic communication since the end of 2002. To complement this process, in 2006, a 
website www.teknikengel.gov.tr has been introduced in order to ensure the efficient administration of 
that notification system. 
79. To ensure cooperation in the fields of techni cal regulations, standardization, conformity 
assessment, metrology, accreditation and consumer saf ety and to contribute to the development of 
bilateral trade through eliminating technical barrier s to trade, Turkey has signed technical cooperation 
agreements with China (P.R.), Ukraine and Is rael. Text based negotiations for signing and 
implementing similar agreements are in progress with other countries.  
(e) Investment  
80. Turkey has attributed considerable importance to the foreign investment and pursued liberal 
foreign policies since 1980's in parallel with the advances in the global economy. The new foreign 
direct investment regime became effective on 17 June 2003 by the publication of "Foreign Direct 
Investment Law No. 4875" in the Official Gazette. The law not only provides foreign capital the best 
international standards, such as equal treatment, guar antee to transfer proceeds, right to resort to 
                                                     
 
8 The amendments concluded and notified to the WTO are as follows: The Law on the Prevention of 
Unfair Competition in Imports No. 4 412 replaced the Law No. 3577; The D ecree on the Prevention of Unfair 
Competition in Imports No. 99/13482, amended by the Decree No. 2005/9840, replaced the Decree 
No. 89/14506; and The Regulation on the Prevention of Unfair Competition in Imports published in the Official 
Gazette on 30 October 1999, amended with the Regulations published in the Official Gazette on 02 May 2002 and 26 January 2006, repl aced the Regulation published in the Of ficial Gazette on 01 October 1989. Turkey WT/TPR/G/192 
 Page 17 
 
 
international arbitration and right to employ key ex patriate personnel, but also repeals prior approval 
procedures for foreign investors and minimum capital requirements to invest in Turkey. 
81. On the other hand, the Turkish Investment En couragement System, which is currently in 
force, consists of an integrated program called as "The Investment Encouragement Program (IEP)", 
which contains various measures to encourage, s upport and orient all types of investments with 
objectives such as regional development, support of  SMEs, R&D and environmental protection based 
on the provisions of related legislation.  
82. The Program (IEP) is based on a regional and hor izontal approach. As far as the mechanism is 
concerned, domestic and foreign investors are e qually treated; the companies having foreign capital 
can benefit from all encouragement measures gr anted to domestic companies with the same 
conditions. Within the objectives and the scope of  the Program, eligible investment projects can 
benefit from tax based encouragement measures (namely "Exemption from Customs Duties" and "Value Added Tax Exemption for imported and dom estically purchased machinery and equipment") 
and "Energy Support for Tourism Investments". A dditionally, a new measure "Interest Support" 
provides for the compensation of certain percentage po ints of the interest rate for credits obtained in 
commercial terms by investors. 
83. In addition to IEP, within the context of "Law No. 5084 dated 29 January 2004 on 
Encouragement of Investments and Employment a nd Amendment of Certain Laws", "energy support" 
is provided to undertakings in certain provinces laggi ng behind the others in socio-economic terms.  
84. In all legal measures and programs introduced, Turkey is very rigorous to observe its 
commitments to the TRIMs Agreement. Today, Turk ey’s FDI regime is in full compliance with the 
rules set forth in the Agreement.  
(ii) Services  
85. In scope of the National Ninth Development Pl an (2007-13), it is estimated that the annual 
average real growth rate of the services sector woul d be 7,3% between 2007 and 2013, while the share 
of services in GDP is expected to reach 65.0% in 2013 in Turkey. The current share of services is 
64.2% of the GDP as of 2006. 
86. With the aim of liberalization of services, Turk ey has made commitments in several services 
categories under the General Agreement on Trade in Services (GATS). Turkey has also been actively 
and constructively engaged in trade in services nego tiations (both bilaterally and plurilaterally) on the 
basis of GATS, since 2000. 
87. In the Doha Round services negotiations, Turkey ’s objective is to improve the number and 
quality of market access and trade-related commitmen ts. In this context, Turkey has submitted its 
initial conditional services offer to the WTO on 15 August 2003 and its revise d conditional offer on 
12 September 2005. They were circulated on 3 September 2003 (TN/S/O/TUR) and on 
29 September 2005 (TN/S/O/TUR/Rev.1), respectively.  
88. Turkey, on the way of full membership to the EU, has continued its regulatory reforms in 
services since its last TPR in 2003. The reforms are embodied particularly in key sectors such as telecommunication and financial services. In the telecommunications services, monopoly of Türk 
Telekom on voice telephony and infrastructure was re moved at the end of 2003. In addition, Türk 
Telekom, having been a state monopoly, was privatized as of 14 November 2005. WT/TPR/G/192 Trade Policy Review 
Page 18 
 
 
89. With regard to financial sector, some significan t structural and regulatory reforms have also 
been made, in line with the EU standards. As mentioned above, a new Banking Law No. 5411 entered 
into force in November 2005. With the new Law,  the supervision and re gulation authority of non-
bank financial institutions, which have formerly b een in the responsibility of Undersecreteriat of 
Treasury, was assigned to Banking Regulatory and S upervisory Agency (BRSA) as well.  In the 
insurance sector, the new Insurance Law No. 5684 cam e into force in June 2007 to provide economic 
integration with international financial markets, a nd to assure an effective operating sector in a secure 
and stable atmosphere. Finally, in the tourism sector, a new Law No. 5571 entered into force in 
January 2007 enabling foreign service suppliers to ope rate travel agencies in Turkey with the same 
qualification requirements applied to domestic service suppliers.  
(iii) Trade-related intellectual property rights (TRIPs) 
90. In line with its commitments under the WTO TRI PS Agreement and in scope of its efforts to 
align laws and regulations with the EU legislati on, Turkey has introduced  certain changes to its 
intellectual property regime since the last TPR. 
Copyright 
91. Latest comprehensive amendment in the Intell ectual and Artistic Works Law of December 5, 
1951 was made to prevent piracy and to reconcile  disputes between collecting societies and users 
(Law No. 5101, 3 March 2004). In this context, reproduction or lending of works for the needs of the disabled has been ensured and economic rights of br oadcasting institutions have been rearranged in 
detail in accordance with Article 14 of TRIPS. B esides, implementation of the provisions of the 
Customs Law No. 4458 concerning struggle with piracy and the Law on Combating Against 
Smuggling has also been re-planned in  accordance, through the process.   
92. On the other hand, Public Prosecutor was aut horized to request the competent court to 
confiscate the illegally reproduced copies and publications. In the case of infringement of rights of authors and other right holders, the authorities can ha ve the copies destroyed, the technical devices of 
reproduction sealed and the venue where sale and illegal reproduction takes place closed down. The 
necessary amendments were made to ensure that, upon recurrence of offences the penalty of 
imprisonment cannot be adjourned and turned into  fines or precautionary measures and the related 
provisions of "the Law upon Fight against Profit-Orie nted Criminal Organizations" shall apply to the 
offences (Law No. 5846). Penalties, within the scope of Law on Intellectual and Artistic Works, have 
also been reduced to applicable levels, taking into account the TRIPS Article 61.  
93. Moreover, Reconciliation Committee has been est ablished by the Ministry of Culture and 
Tourism so as to resolve any disputes, which may arise in the course of fixation of tariffs. The opportunity to establish collecting society has been  granted to publishers as well as authors and 
related right holders.  
94. Efforts have also been made fo r transparent administration of collecting societies in terms of 
administrative and financial liabilities. To this en d, collecting societies have been put under the 
supervision of the Ministry of Culture and Tour ism (Articles 42/A and 42/B of the Law No. 5846). 
95. The amendments effected cover (i) the certifi cation of the enterprises producing materials like 
CDs, VCDs, DVDs or recording, reproducing, selli ng or distributing the intellectual and artistic 
works; (ii) the royalties payable to the right holders in case of resale of works of fine arts (Article 44 
and 45 of the Law No. 5846).  Turkey WT/TPR/G/192 
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96. Principles and procedures regarding banderol (str ip stamp) implementation, inspection, and 
penalties to be imposed in case of infringement of  the implementation have been rearranged. Ex 
officio authority has been gran ted to security forces and municipal police concerning banderol 
infringements. Furthermore, sale of legally reprod uced banderolled work copies on streets, squares, 
bazaars, pavements, wharfs, bridges and similar spots has been banned (Article 80 and 81 of the Law 
No. 5846).  
97. Additional articles have been put in force, regarding the sui generis  protection in databases (in 
line with the EU Directive on Legal Protection of  Databases). With these additional articles, 
establishment of a database that will facilitate the flow of work between Ministry of Culture and 
Tourism and other related units, diminish bureaucr atic transactions, and ensure easy access to reliable 
information for pursuit of intellectual property ri ghts has been realized. The database, comprising 
information with respect to banderol, certification,  recording-registration, and authors and other right 
holders, will be accessible to collecting societies, co urts, the Undersecretariat of Customs, and the 
Ministry of Interior. 
98. Besides, in the scope of membership to th e EU, a Twinning Project "To Support Turkey’s 
Efforts in the Full Alignment and Enforcement in the Field of Intellectual Property Rights with a 
Focus on Fight Against Piracy" has been in itiated in May 2006 and scheduled to end by 
November 2007.  
99. Finally, according to the Circular on the loss of tax revenues stemming from actions of piracy 
and counterfeiting, which is issued and updated on  20 March 2006 by the Ministry of Justice, the 
Offices of Public Prosecutors shall inform the Finance Departments on the final decisions of the 
criminal courts regarding convi ction of piracy and counterfeiting to prevent tax evasion.  
Industrial property rights 
100. In the field of industrial property rights, The Law protecting the topographies of integrated 
circuits came into force on 22 April 2004 (Law No. 5147). "Law on the Protection of Breeders’ Rights on New Plant Varieties" numbered 50 42 entered into force on 15 January 2004.  
101. The Law No. 5000 relating to the establishment and the functions of the Turkish Patent 
Institute came into force on 6 December 2003 and invalidated the previous Decree Law No. 544 dated 
1994).  
102. Turkey signed the PLT (Patent Law Treaty) on 2 June 2000 and Singapore Treaty on 
28 March 2006 both of which are World Intellect ual Property Organization (WIPO) administered 
treaties. The Hague Agreement and the Trad emark Law Treaty (TLT) came into force on 
1 January 2005. 
103. Moreover, Turkey has been a party to th e European Patent Convention (EPC) since 
1 November 2000. Turkey has also ratified the revised version of the EPC (EPC 2000), which is 
expected to come into force on 13 December 2007. Th e revision aims to adapt the international laws 
particularly TRIPS and PLT.  
104. The patent and trademark agent system, an im portant element of structural framework of 
industrial property rights has been established and a draft law for a patent and trademark agent union 
has been prepared and submitted to the interested parties for consultation.  WT/TPR/G/192 Trade Policy Review 
Page 20 
 
 
IPR-related Courts 
105. In order to strengthen the enforcement of inte llectual property rights two specialized courts 
(Criminal IPR Court and Civil IPR Court) were set up in 2001 in Istanbul, where IPR cases are 
relatively intensive in comparison with other cities (almost half of the total number of cases are in 
Istanbul). 
106. The number of Specialized IPR Courts was increased by: 
- eight in 2004 (2 civil and 3 criminal IPR Courts in Istanbul,  1 civil and 1 criminal IPR Courts 
 in Ankara, 1 criminal IPR Court in Izmir) - twelve in 2006 (4 civil and 3 criminal IPR Courts in Istanbul,  3 civil and 1 criminal IPR 
 Courts in Ankara, 1 criminal IPR Court in Izmir) 
- nine in July 2007 (3 civil and 3 criminal IPR Courts in Istanbul, 1 civil IPR Court in Ankara, 
 1 civil and 1 criminal IPR Courts in Izmir).   107. On the other hand, a pilot project
9 funded by European Union was completed successfully in 
May 2004. The overall objective of the Project was to enable Turkey to meet its commitments in the 
fields of intellectual, industrial and commercial property rights in accordance with the Agreement on 
European Community-Turkey Customs Union.  
(2) TURKEY 'S ACCESSION PROCESS TO THE EU  
(i) Recent developments in Turkey-EU relations  
108. Turkey made its first application to join th e then European Economic Community (EEC) in 
1959. This application resulted in the signature of  the Ankara Agreement in  1963, which foresaw a 
gradual process for Turkey’s EU integration an d envisaged the progressive establishment of a 
Customs Union. The Ankara Agreement was supplemen ted by an Additional Protocol signed in 1970, 
which set out the timetable for abolition of tariffs  and quotas on goods circ ulating between Turkey 
and the EEC. 
109. In line with the Ankara Agreement, Turkey undertook to eliminate its customs tariffs on 
industrial products in 22 years starting from 1973, culminating in the establishment of Turkey-EC 
Customs Union on 1 January 1996. 
110. In 1987, Turkey applied for full membership . The Helsinki European Council held on 
10-11 December 1999 produced a breakthrough in Turkey-EU relations, during which Turkey was officially recognized without any precondition as a candidate country. Thus a pre-accession strategy 
has begun for Turkey to stimulate and support its reforms.  
111. A defining moment in Turkey-EU relations has been experienced on 6 October 2004, when 
the European Commission published the 2004 Pr ogress Report and the Recommendation Document. 
Within that Document, Turkey was said to have fu lfilled the political criteria in required measure and 
the launch of accession negotiations with Turkey was recommended. 
112. Brussels European Council of December 2004 then confirmed that Turkey sufficiently 
fulfilled the Copenhagen political criteria and decide d to start accession negotiations with Turkey on 
3 October 2005. Decisions taken at the Brussels Summit with regard to Turkey’s membership 
                                                     
 
9 The "Effective Enforcemen t of Intellectual Rights Project" which was prepared by the Ministry of 
Justice, General Directorate for European Union Affairs. Turkey WT/TPR/G/192 
 Page 21 
 
 
included some special clauses that were not featured in previous rounds of EU enlargement. In the 
decision, there was reference to th e possibility of permanent restricti ons in such areas as freedom of 
movement of persons, structural policies and agriculture. 
113. The European Commission presented the Accessi on Negotiations Framework for Turkey on 
29 June 2005. The framework includes the princi ples regulating the negotiations, the content of 
negotiations, negotiation procedures and negotiatio n headings. The framework document emphasized 
that the ultimate objective of negotiations is full membership. The document was adopted by the EU Council on 3 October 2005. On 29 July 2005, Turkey  signed the Additional Protocol extending the 
Turkey-EU Customs Union to new member states  that acceded to the EU on 1 May 2004.  
114. Shortly after the EU Accession Negotiations w as launched on 3 October 2005, Screening 
Process was started with a meeting on the Chap ter "Science and Research" on 20 October 2005. 
Screening Process for all negotiation Chapte rs was completed on 13 October 2006.  
115. On 29 November 2006, the European Commissi on recommended suspension of opening of 
negotiations in 8 chapters (Free Movement of Good s, Right of Establishment and Freedom to Provide 
Services, Financial Services, Agriculture and Ru ral Development, Fisheries, Transport Policy, 
Customs Union and External Relations) and not clos ing negotiations in any of the chapters due to 
problems in Commission’s view of implementation of  Additional Protocol to Ankara Agreement. The 
EU General Affairs and Extern al Relations Council agreed w ith the recommendation of the 
Commission to suspend opening of negotiations for 8 chapters on 11 December 2006.  This decision 
was confirmed by Brussels European Council of 14-15 December 2006.  
116. As of July 2007, negotiations  regarding Chapter "Science and Research" are provisionally 
closed, and negotiations for Chapters "Enterprise and Industrial Policy", "Financial Control" and 
"Statistics" are ongoing. 
117. Turkey’s Program for Harmonization with the EU acquis was released on 17 April 2007. The 
said Program that includes the necessary legisla tive changes for the period 2007-13 will serve as a 
roadmap for the harmonization efforts within  the framework of accession negotiations.  
(ii) Turkey’s Current Status of Harmonization with the EC Policies  
(a) Harmonization in commercial policies 
118. Harmonization with the basic mechanisms a nd principles of the EU’s Common Commercial 
Policy constitutes a substantial part of Turkey’s obl igations in scope of the Decision No. 1/95 of the 
EC-Turkey Association Council establishing the Cust oms Union between Turkey and the European 
Union. 
119. In this framework, in line with Article 12 of the above-mentioned decision, harmonization 
with the EU acquis has been achieved in the follo wing areas: "common rules for imports and exports", 
"common rules for exports from certain third c ountries", "administration of quantitative quotas",  
"protection against dumped and subsidized imports",  "community procedures in the field of common 
commercial policy in order to ensure the exerci se of the community’s rights under international 
rules", "officially supported export credits", "tex tile imports under common rules", "textile imports 
under autonomous arrangements", "inward pro cessing", "outward processing" and "outward 
processing in textile and clothing". Thus, Turkish le gislation regulating the foreign trade regime has 
been harmonized with the EU acquis to a great extent. WT/TPR/G/192 Trade Policy Review 
Page 22 
 
 
Textiles and clothing  
120. One of the most important aspects of the Cust oms Union between Turkey and the European 
Union was Turkey’s adoption of the EC’s textiles and clothing restrains as part of the Common 
Commercial Policy measures, in conformity with Article XXIV of GATT 1994. Since quotas and all 
restrictions were phased out on 1 January 2005 under the WTO Agreement on Textiles and Clothing 
(ATC) of 1995; Turkey terminated all textile quotas for WTO members. On the other hand, in 
accordance with the paragraph 242 of the Report of the Working Party on the Accession of China to 
the WTO, Turkey has quotas in place for certain  Chinese origin textiles and apparel products. 
121. On the other hand, market conditions that came  to effect after the removal of quotas have 
created turbulence in Turkey. As an exporter count ry in textiles and clothing products, Turkey has 
engaged in certain initiatives within two separate bodies of the WTO, the Council for Trade in Goods 
(CTG) and the NAMA Negotiating Group, to un derline the unique status of this sector.10 
Preferential customs regime of the EC 
122. Article 16 of the Decision of the Association Co uncil No. 1/95 states that with a view to 
harmonizing its commercial policy with that of the Community, Turkey shall align itself progressively 
with the preferential customs regime of the Community  as from the date of the entry into force of the 
Decision. This alignment will concern both the auto nomous regimes and prefer ential agreements with 
third countries.  
Generalized system of preferences11 
123. EC’s Generalized System of Preferences (GSP) has been adopted by 1 January 2002 partly 
for 2456 products, taking account Turkey’s domestic needs and interests. The product coverage has 
been further enlarged to cover half of the produc ts (3056 CN codes) under the EC’s GSP regime as of 
1 January 2004. Turkey also enacted a new decree on 25 August 2004. With this new decree all industrial products covered by th e EC’s GSP Regime are included in to Turkey’s GSP. According to 
2007 Import Regime, the GSP Regime covers 5357 products (CN codes) and it constitutes nearly 53% 
of total tariff lines and 68% of all industrial products. 
124. Under Turkey's GSP regime, preferences are gran ted to industrial goods and some agricultural 
goods in the scope of the CUD.  The goods covere d by the regime are classified according to their 
"sensitivity". Duties on non-sensitive products are fu lly eliminated, while those on sensitive products 
are reduced. The reduction is by 3.5 percentage points on the MFN duty rate, unless preferential rates 
under the EC's GSP scheme provides for tariff reductions of more than 3.5 percentage points. In that 
case, the higher reductions will apply. Finally, for Ch apters between 50-63 the reduction is 20% of the 
MFN duty rate.   
Free-trade agreements  
125. The Customs Union between Turkey and the EC constitutes the legal basis of Turkey’s free 
trade agreements.  
126. The composition of Turkey’s FTAs is quite exte nsive. More precisely, the tariff concessions 
for the industrial and agricultural products, quan titative restrictions on imports and exports, customs 
                                                     
 
10 The relevant documents are: G/C/W/497 (25 October 2004), G/C/W/522 (30 June 2005), G/C/W/549 
(28 April 2006), G/C/W/573/Corr.1 (15 March 2007) and JOB(06)/60 (22 March 2006). 
11 See also Paragraph 68 for preferential treat ment of LDCs in scope of the GSP regime. Turkey WT/TPR/G/192 
 Page 23 
 
 
duties or measures having equivalent effect, basic duties, safeguard measures, internal taxation, 
technical barriers to trade, sanitary and phyto sanitary measures, rules of origin, services and 
investment, general exceptions, security exceptions, state monopolies, payments, rules of competition, 
public procurement, intellectual property rights, dump ing and subsidy, re-export and serious shortage 
and balance of payments difficulties are governed by FTAs. Moreover, rules of origin are a major 
component of FTAs. 
Graph 1.  
 
(*) FTAs with Lithuania, Hungary, Estonia, Latvia, Slovakia, Po land, Slovenia, Romania, Czech Republic and Bulgaria have not 
 been mentioned since all these countries have become full members to the EU.  (**) Out of the scope of harmonization efforts.  The EU does not have an FTA with Georgia. 
(***) Turkey-Albania FTA has been signed on 22 December 2006 and will enter into fo rce once the internal ratification procedure s are 
 completed in both countries.  
127. The Agreement between Turkey and the EFTA States12, which entered into force on 
1 April 1992, constitutes the first step towards Turkey ’s undertaking of preferential customs regime of 
the EU.  
128. Regarding the CEEC, following the FTA between  Turkey and EFTA, between 1997 and 2000 
Turkey concluded FTAs with Romania, Lithuani a, Hungary, Estonia, Czech Republic, Slovakia, 
Bulgaria, Poland, Slovenia and Latvia respectively.   The FTAs signed with these 10 CEEC have been 
terminated due to the enlargement of the EU in  May 2004 and January 2007. As of these dates, 
preferential trade between Turkey and these count ries is conducted within the scope of Turkey-
European Community association relationship.  
129. Within the context of the Stabilization and Association process of the EU towards the 
Western Balkans countries13 and due to Turkey’s well-founded hist oric, social and cultural relations 
as well as trade and investment opportunities, trad e relations with these countries constitute another 
major area of concern for Turkey. Accordingly,  Turkey’s FTAs with Macedonia (September 2000), 
Croatia (July 2003), and Bosnia a nd Herzegovina (July 2003) are in force and a FTA with Albania 
was signed on 22 December 2006 in Tirana which will enter into force once the internal ratification 
process in both countries are completed. Regarding Montenegro, after its inde pendence in June 2006, 
                                                      
12 EFTA states are Switzerland, Li echtenstein, Norway and Iceland. 
  13 Western Balkan countries are Albania, Macedonia, Croatia, Bo snia and Herzegovina, Serbia, 
Montenegro and Kosovo. T UR KE Y ’ S  F RE E  T RADE  AGRE E ME NT S
Agreem ents s i gned(*)
1. EF TA (Swi tz erl and,  
L i chtenstei n,  Icel and,  
Nor way )
2. Is rael
3. Mac edoni a
4. Croati a
5. Bos ni a and H erz egov i na
6 . P a le st in e A u t h o r it y7. Tuni s i a
8. Moroc c o
9. Sy ri a
10. Egy pt
11. Al bani a (***)Fa ro e  Isla n d s
L ebanon Jo rda n
GCC
Montenegro
Ge orgia **O n g o in g N e g o t ia tio n s
Expl oratory Tal ks
C h ile                 M e x ico
South Af ri c an Cus tom s U ni on
UkraineWT/TPR/G/192 Trade Policy Review 
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the first round of negotiations are held in 24-25 May 2007 in Kolasin, Montenegro and the second 
round is planned to be held in  8-9 October 2007 in Ankara. Th e FTA negotiation process between 
Turkey and Serbia is supposed to be  initiated before the end of 2007. 
130. Turkey is also part of the Pan-Euro-Medite rranean Partnership process. The Pan-Euro-Med 
Partnership process is based on the Barcelona Declaration14, which was accepted in Euro-
Mediterranean Ministerial Conference dated on 27-28  November 1995. It envisages the formation of 
Euro-Mediterranean Free Trade Area as of the year 201015.  
131. In this context, Turkey started her initiativ es to conclude FTAs with the Mediterranean 
countries.16 The FTAs with Palestine (2005), Tunisia (2005), Morocco (2006), Syria (2007) and Egypt 
(2007) entered into force respectively. Moreove r, Turkey’s FTA negotiations with Lebanon and 
Jordan are still continuing and FTA negotiations with Faeroe Islands which were brought to a 
standstill by the year 2000 are set to resume in the second half of 2007.  
132. Alongside Jordan, Lebanon, Montenegro and Faro e Islands, Turkey’s FTA  negotiations with 
the Gulf Cooperation Council (GCC) countries17 and Georgia are also under way. Finally, The 
exploratory talks with South African Customs Uni on (SACU), Mexico, Chile and Ukraine were held 
in July 2005, May 2005, May 2007 and June 2007 respectively.  
(b) Harmonization in competition policy  
133. The Turkish Competition Authority (TCA) is res ponsible for the enforcement of competition 
rules regulated by the Act No 4054 on the Pr otection of Competition (Act No. 4054). Brief 
information on the history and description of the Act No 4054 and the TCA can be given as follows: 
134. According to the Decision No. 1/95, Turkey ha d to make its legislation in the competition 
field compatible with articles 81 and 82 of the Rome Treaty prohibiting anti-competitive agreements 
and abuse of dominant position respectively. To th at purpose, the Decision No. 1/95 requires Turkey 
to adopt a law prohibiting anti-competitive agreem ents and abuse of dominant position and establish a 
competition authority to apply the law before the en try into force of the Customs Union. Moreover, 
Turkey had to ensure that, within one year afte r the entry into force of  the Customs Union, the 
principles contained in block exemption regulations  in force in the Community, as well as in the case-
law developed by EC authorities, shall be applied in Turkey.  
135. Although the Act No 4054 entered into force in 1994 before the Customs Union as provided 
in the Decision No. 1/95, establishment of the TCA could not be realized until 1997. As a result, the 
TCA and its decision-making body, the Competition Bo ard, could begin its operations in 1997.  
136. According to the Act No. 4054, anti-competiti ve agreements, concerted practices and 
decisions, abuse of dominant position are prohibited in line with the Articles 81 and 82 of the Rome Treaty. Moreover, Act No. 4054 provides necessary rul es for merger control as well. According to the 
Act No. 4054, the Turkish Competition Authority has administrative and financial autonomy. The 
                                                     
 
  14 Barcelona Declaration has been signed by EU Coun cil, EU Commission, 15 Member States, Turkey, 
Algeria, Morocco, Tunisia, Egypt, Le banon, Syria, Jordan, Palestine, Israel, Malta and Cyprus. Libya is an 
attending the Euro-Med Partners hip as observer since 1999. 
  15 The Economic and Financial Chapter of the Barcelona Declaration envisages the gradual formation 
of a "Free Trade Area" between the part ner countries until 2010 where a region of shared prosperity is formed.  
16 The FTA with Israel had already entered into force as of 1 May 1997, before the beginning of the 
process.    
17 GCC countries are Bahrein, Kuwait, Oman, Qa tar, Saudi Arabia and United Arab Emirates. Turkey WT/TPR/G/192 
 Page 25 
 
 
Turkish Competition Authority has the necessary administrative capac ity and enforcement tools in 
order to apply the law effectively.  Here it is al so important to mention that in addition to its 
enforcement role of the competition rules envi saged in the Act No. 4054, the TCA has also 
competition advocacy role to develop competition cu lture and eliminate anti-competitive regulations 
and acts of the State. 
137. As a matter of fact, following the screening report praising the state of competition rules in 
Turkey, the final Progress Report of 2006 on Turkey also provides that harmonization level of Turkish competition rules is "well advanced" reflecti ng the main principles of competition rules in the 
Community, and the Turkish Competition Authority has sufficient level of administrative capacity to 
enforce the competition rules. Additionally, the fi ndings in the Peer Review Report on Turkey’s 
Competition Law and Policy prepared by the OECD in 2005
18 are parallel to those of the European 
Commission in terms of enforcement record, legi slative framework and the institutional capacity. 
(c) Harmonization in technical legislation  
138. Turkey has undergone a structural change in  its regulatory practices as a result of its 
obligation to approximate its tec hnical legislation with that of the European Union within the 
framework of the Turkey – EC Customs Union Deci sion. This CUD stipulates the elimination of not 
only classical trade restricting measures but also the barriers to trade arising from different regulatory 
practices on goods in the two signatories to the CUD. 
139. Within the context of the transposition of the EU  horizontal legislation in relation to the safety 
of products, the Law on the Preparation and Implem entation of Technical Legislation on Products 
(The Framework Law No. 4703) was put into force as of 11 January 2002. 
140. The Framework Law has been prepared to trans pose different elements of the EU technical 
legislation into the Turkish legal order and describ es the rights and duties of the regulators, producers 
and third party conformity assessment bodies. 
141. Turkey has made significant progress especially  in the implementation of the so-called 
horizontal technical legislation. Moreover, the alig nment of the sector-specific legislation has also 
accelerated. Competent authorities put into force 232 pieces (out of approximately 300) of technical 
legislation, which was determined by Turk ey-EC Association Council Decision No. 2/97. 
142. The market surveillance concept has also deeply changed toward s a new direction in Turkey 
with the Customs Union. The Framework Law, wh ich lays down general principles of product safety 
brought about fundamental changes in th e national market surveillance system.  
143. Moreover, in accordance with Article 6.3 of th e TBT Agreement and in order to prevent any 
possible trade diversion between Turkey and the EU , Turkey is planning to conclude bilateral 
agreements parallel to EU’s mutual recognition agre ements. As a first step, Turkey has started text 
based negotiations with EFTA to conclude mutu al recognition of conformity assessment between 
Turkey and the EFTA States.  
144. On the other hand, Turkey has the Regime for Technical Regulations and Standardization for 
Foreign Trade, which consists of a Decree (No. 2005/9454), a regulation and number of 
Communiqués. It was first put into force in 1995  and continues to regulate the standardization 
activities since then. It is a transitional regime that  is revised annually. The aim of the regime is to 
                                                      
18 The OECD Report on "Competition Law and Po licy in Turkey – 2005" can be accessed at 
http://www.oecd.org/dataoecd/26/7/34645128.pdf WT/TPR/G/192 Trade Policy Review 
Page 26 
 
 
prevent technical legislation, specifications and st andards applied in foreign trade from constituting an 
obstacle to international trade.  
145. With regard to Turkish technical institutions, Turkish Accreditation Agency, which is one of 
the main institutions in ensuring international acc eptance of certificates issued by conformity 
assessment bodies, was established on 4 November  1999, with the enactment of the Law on the 
Organization and Functions of the Turkish Accreditation Agency (TÜRKAK). To ensure its 
international recognition and to enhance internati onal cooperation, TÜRKAK has become the member 
of European Co-operation for Accreditation si nce 28 November 2002 and has signed 4 out of 7 
EA-MLAs in April 2006. It is expected that th e 3 remaining EA-MLAs will be signed within the 
second half of 2008. TÜRKAK has also become a full member of the International Laboratory 
Accreditation Cooperation (ILAC) and Internati onal Accreditation Forum (IAF). Whereas TÜRKAK 
has signed an MRA with ILAC in the fields of te sting and calibration, its application for MLA with 
IAF has not been concluded yet. 
146. Turkish Standards Institution (TSE) is the sole responsible authority for the preparation and 
adoption of national standards. TSE, which is a fu ll member of the International Organization for 
Standardization (ISO), the International Electrot echnical Commission (IEC) and affiliate member of 
the European Committee for Standardization (CEN) and the European Committee for Electrotechnical 
Standardization (CENELEC), has applied for the full membership of both CEN and CENELEC. TSE 
is expected to become a member of CEN and CENELEC after the Turkish Parliament adopts the 
amendments to its existing law. 
(d) Harmonization in agricultural policies  
147. Turkey and the EC have agreed to extend th e preferential regime in basic agricultural 
products with a view to assisting Turkey to adapt its  agricultural policy to that of the EU. In that 
respect, a series of negotiations on better market access possibilities for agricultural products have 
been held between the Parties during the period 1993-1997. 
148. As a result of these negotiations, the Parties concluded the Decision No. 1/98 of the Turkey-
EC Association Council, which entered into force as of 1 January 1998. 
149. In the context of the Association Council D ecision No. 1/98, apart from full ad valorem 
exemption on almost all agricultural products, Tu rkey acquired concessions in a number of products 
including tomato paste, poultry meat, sheep and goat meat, olive oil, cheese, certain fruits and 
vegetables, hazelnuts, fruit marmalade and jams in th e form of duty exemption/reduction, within tariff 
quotas or without any quantity restrictions. Similarly,  Turkey has granted concessions to the EC in the 
form of tariff quotas on live bovine animals, froze n meat, butter, cheese, seeds of vegetables and 
flowers, flower bulbs, apples, peaches, potatoes, cereal s, refined or raw vegetable oil, sugar, tomato 
paste and some animal food. 
150. Finally, negotiations between Turkey and the European Commission were undertaken with a 
view of adapting the Association Council Decision No . 1/98 in order to take into account of the 
enlargement of the European Community on 1 May 2004. As a result of the negotiations, the Association Council Decision No. 2/2006 amending the Protocols I and II of the Association Council 
Decision No. 1/98 was adopted on 17 October 2006. W ith the Decision, the modality of the existing 
concessions has been improved.  
151. On the other hand, within the context of th e Association Council Decision No. 1/95, Turkey 
adopted Community’s system regarding the processe d agricultural products (PAPs). Thus Turkey 
aligned its import regime accordingly and charges separate duties for the agricultural and industrial Turkey WT/TPR/G/192 
 Page 27 
 
 
components in imports of PAPs from all countries. However, as the industrial products are in free 
circulation within the customs zone, Turkey and EU  mutually eliminated tariffs applicable to the 
industrial component and PAP’s are in free circ ulation with the EU since 1 January 1996. 
152. Upon the enlargement of the Community on May 1, 2004, Association Council Decision 
No. 1/2007 has entered into force on 1 July 2007 wh ich includes concessions in the form of duty free 
tariff quotas for the most of the processed agricultural products.  
III. DEVELOPMENTS IN TURKISH FOREIGN TRADE  
(1) OVERVIEW OF STRATEGIES  
153. More than a quarter of century has passed since Turkey switched from defensive, inward-
oriented import substitution policies towards an export-led, outward-orie nted economic growth 
model. From 1980’s to the 2000s, Turkey establis hed a free market economy integrated into the 
global economic system. 
154. Over the past four years, utilization of the opportunities of the global trading environment and 
a sound integration with the world economy, have been, more than ever, the main motives behind the economic and trade policies of Turkey. To this end, ambitious steps have been taken in line with the 
programs introduced by the Government and stra tegies developed by the public institutions. 
155. In particular, policies are adopted to transf orm Turkey from a peripheral, labour-intensive 
production centre to an increasingly high-tech a nd capital-intensive goods exporting country. To 
lessen Turkey’s market dependency and concentrati on on certain regions and countries, extra political 
capital has been spent and new export strategies devised for improved access to a wider range of 
markets.  
156. In this context, "The Neighbouring and Surrounding Countries Strategy"(2000) has been 
taken on board by the Undersecretariat of the Prime Ministry for Foreign Trade to fully utilize the benefits of the location and logistics. This stra tegy, covering the neighbouring regions as the first 
phase than the surrounding regions as the second, paid off well to gain sufficient access in the markets 
concerned, through the intensive contacts at both official and business levels along with intensive 
promotional activities. In addition, specific regi onal strategies such as "The African Countries 
Strategy"(2003), "The Asian-Pacific Countries Stra tegy" (2005), and "The Americas Strategy" (2006) 
have also been implemented through the identical policy tools.  
157. Turkey has also been increasing its regional effort s, within the organizations that it has been a 
member of, such as the Islamic Conference, th e Developing-8, the Organization for Economic 
Cooperation, and the Black Sea Economic Coopera tion (BSEC). The main purpose of these regional 
policies are to add a comprehensive trade dimension to the agenda of these organizations with a view 
to create new market access opportun ities for members and to eliminate any barriers to trade through 
the proposed arrangements.    
158. Moreover, based on a comprehensive approach, "The Exports Strategic Plan for 2004-06" has 
been prepared by the Undersecretariat for Foreign Trade, in order to set targets to reach and the 
appropriate policy tools to utilize for enhanced mark et access opportunities. The plan offers long-term 
solutions to the structural problems of Turkish expor t oriented industries, rather than dealing with 
short-term considerations. Following the successful implementation of the Strategic Plan for 2004-06, 
the Government has set the goal of "improving co mpetitive structure towards a sustainable export 
growth" on the basis of its "Three Year (2007-09) Export Strategy Plan".  WT/TPR/G/192 Trade Policy Review 
Page 28 
 
 
159. Thus, in the period concerned, the upward tre nd in external trade figures has been striking, 
where the ratio of trade volume to GDP also incr eased steadily. Exports have grown on an accelerated 
momentum in the last five years. 
(2) TRADE DEVELOPMENTS BY REGIONS , COUNTRIES , REGIONAL ORGANIZATIONS AND 
 S ECTORS19  
160. Both external and internal factors have trigge red Turkish external trade in different ways, 
leading to record foreign trade volumes, US$190, 3 billion in 2005 and US $225 billion in 2006. 
Increasing global demand depending on relatively higher economic growths in major markets created a favourable global environment fo r Turkish exports reaching US$85,5 billion in 2006. Main internal 
driving force for exports was the regional and sect oral policies, as mentioned above, implemented by 
the government. On the other hand, peaking oil prices as a result of the future supply concerns related 
to the depletion of reserves and political-military  conflicts in major producer countries has had 
ramifications in Turkey, a net energy importer, as high import values. Moreover,  high growth rates in 
the Turkish economy increased the demand for im ports due to higher in come and additional 
investments. Turkey imports a large amount of intermediate goods, more than 70% of its total 
imports. Consequently, integration of the Turkis h economy to global markets accelerated with a 
dazzling performance in recent years.  
161. Over the past four years, while exports reached  US$85,5 billion with an annual average rate 
of 24%, imports surged to US$139,5 by rising at an annual average of 28%. At the same time, the ratio of exports to imports fell to 61,3% in 2006 from 69,9 in 2002. 
162. An overall review of the current Turkish trad e in bilateral and regional perspectives would 
provide the picture of the general structure of Tu rkey’s commercial links as a country that bridges 
different groups of countries with respect to  their production pattern s, economic and political 
structures, different geographies and cultures. For this purpose, here will be taken major trading 
partners of Turkey with figures in merchandise export s and imports to reflect recent trends in bilateral 
trade and then some regional initiatives that Turkey  is involved will be highlighted in a broader 
perspective. 
(i) By regions and countries 
The European Community (EC) 
163. The EC is clearly the biggest trade partner of Turkey. In 2006, the EC accounts for 51,4% of 
total exports and 39% of total impor ts. Turkey is an important trade partner of the EC as well. The 
foreign trade statistics of the EC for the year 2006 demonstrate that Turkey ranks seventh at imports 
of the EC with a share of 2,8% and fifth at exports of the EC with a share of 4%.  
164. The Customs Union has strengthened the trad itionally comprehensive trade relations. The 
volume of trade between Turkey and the EC reac hed to US$99 billion in 2006 from US$27,9 billion 
in 1995.  
165. Even though imports from the EC has fluctuated in parallel with internal and external macro 
economic developments, during the 1995-2000 period, im ports recorded a higher rate of increase than 
exports. However, this trend reve rsed in 2001 and some positive devel opments were observed in trade 
                                                     
 
19 See Annexes 5-A, 5-B, 5-C, 5-D and 5-E for "Table 5-A. Foreign Trade by Years", "Table 5-B. 
Exports by Country Groups", "Table 5-C. Imports by Country Groups", "Table 5-D. Exports by SITC", and "Table 5-E. Imports by SITC". Turkey WT/TPR/G/192 
 Page 29 
 
 
balance with the EC. During the period of 1995-200 6, the increase rate of exports has exceeded the 
increase rate of imports. 
166.  The Customs Union locked in reforms toward s liberalization in Turkey and accelerated the 
regional integration process, which characterizes exte rnal trade relations of Turkey. The openness rate 
of Turkey, which is the share of total trade volum e in GNP, increased considerably to 56,3% in 2006 
from 30,6% in 1994. 
Other Europe & CIS Countries 
167. Compared to the EU, the growth rate of trade volume with other European countries 
transcended between 2002 and 2006. With the impetu s stemming from the FTAs with the non-EU 
countries (Croatia, Macedonia, Albania, Bosnia and Herzegovina), jumping by nearly 3,3 fold since 
2002, trade volume with this group of countries re ached US$33,7 billion in 2006. Imports from Other 
Europe consist mostly of raw materi als, intermediate goods and energy.  
168. On the other hand, The Commonwealth of Indepe ndent States (CIS), besides its cultural ties 
with Turkey, plays an important role  in Turkey’s foreign policy as we ll as in its external trade and 
economic strategies. The trade volume reache d US$30 billion in 2006 with an impressing 300% 
increase compared to the year 2000. 
169. As of 2006, trade volume with Russian Federation, the first country in the ranking of 
Turkey’s imports, totalled US$21 billio n with a bilateral trade deficit of US$14,6 billion on the side of 
Turkey. 
170. Due to the success of policies followed since 2000, the trade volume between Turkey and the 
Central Asian – Caucasian Republics attained US  $4, 8 billion in 2006 whereas it reached only 
US$1,2 billion in 2000. In 2006, Turkey’s export s to Central Asian and Caucasian countries 
augmented to US$2,5 billion with a threefold increase.  
Asia-Pacific Countries  
171. Asia-Pacific, the most dynamic region of th e world in terms of economic and social 
development, is another potential ma rket for Turkey so that a trade development strategy is tailored in 
2005. A solid trade and investment infrastructure and an increase in the interaction with those 
growing markets are expected to be established. Th e rise of the share of Asia-Pacific Countries in the 
world trade also stimulates Turkey’s trade relations  with countries in the region. The total trade, 
which was US$22.4 billion in 2005, reached US$27.1 billion in 2006, with an increase of 21,1%. 
Turkish businessmen’s increasing access to certain As ian markets caused steady expansion in Turkish 
exports, especially, in mining ores, oil and oil pr oducts, non-iron metals, electrical and non-electrical 
products. In this context, Turkey’s exports to China have shown an increasing trend since 2000 and 
have been realized as US$693 million in 2006  compared to US$96 million in 2000.  
172. Turkish exports to Japan has shown a stab le trend, ranging arou nd 150-300 million dollars 
between the period of 2003-06, while Turkish impor ts from Japan has shown a fluctuating trend. In 
2006, Turkish imports from Japan were realized as 3,2 billion dollars and Turkish exports to Japan 
were registered as 263 million dollars.  
Middle East  
173. Over the last four years, the Middle East countries have been a crucial country group within 
the scope of Turkey’s trade strategy. As a result of an increase in both imports and exports over the WT/TPR/G/192 Trade Policy Review 
Page 30 
 
 
five years, Turkey’s total trade volume has in creased from US$6 billion in 2002 to around 20 billion 
in 2006. 
174. For five years since 2002, export of Turkish goods to this region has exceeded imports. 
However, trade surplus has gradually  decreased within the last two years; from US$2,1 billion in 2004 
to 368 million in 2006. The foremost reason of this decline is the increase in oil and natural gas 
imports. Exports of Turkey to the region totalle d US$10,2 billion (11,9% of the total) in 2006. 
Africa 
175. Having a 5,3% share in Turkey’s total trade in 2006, African countries have gained particular 
significance in trade figures of Turkey starting especi ally with the contribution of African Countries 
Strategy in 2003. The results obtained so far in te rms of the development of trade seem to be much 
promising. The total trade volume reached US $9, 6 billion with 77% cumulative increase between 
2003 and 2005, and US$11,9 billion in 2006. Of the total trade with Africa, 65% of imports and 
67,8% of exports in 2006 were realized with four  North African countries, namely, Morocco, Algeria, 
Tunisia, Libya and Egypt. 
Americas 
176. Turkey’s trade with the Americas approached US$16 billion in 2006. Of the total trade 
volume with this group, 72,5% was realized only w ith the USA. Turkish exports to the USA reached 
US$5,1 billion in 2006, amounting to a share of 5, 9% in Turkey’s total exports. Having almost 1 
billion trade volume with each, Brazil and Canada are th e other biggest trading partners of Turkey in 
the Americas. In 2006, Turkey’s e xports to Canada were US$378,5 m illion, while imports from this 
country amounted to US$674,7 million. In the sa me year, Turkey’s exports to Brazil reached 
US$121,9 million, while imports from Brazil amounted to US$933,9 million.  
177. As one of the two pillars of the Strategy towards Americas, "The Trade and Investment 
Enhancement Strategy towards North America", which had been contemplated in an innovative style, 
was put into effect at the beginning of 2006 with the aim of enhancing commercial relations with the 
US and Canada. This market access strategy targe ting some selected US and Canada Federal States 
utilizes a "province-product matrix" in order to captu re the potential share fo r Turkey from the largest 
export market in the world.  
178. On the other hand, The Latin American and the Caribbean countries with strong economic 
capacity and trade development potential are among the priority regions with whom Turkey wants to 
increase its trade. In 2006, Turkey’s export to Latin America and the Caribbean region was 
888,9 million dollars, and its import from these count ries was 2,5 billion dollars. Turkey aims to 
increase its trade volume to the region and MERCOSUR in particular. In this regard, Turkey launched 
"Trade Enhancement Strategy with Latin Amer ican Countries" in 2006, the second pillar of the 
Strategy towards Americas. 
(ii) By regional organizations 
Economic Cooperation Organization (ECO)20 
179. On the other hand, Turkey’s trade volume with the Economic Cooperation Organization 
(ECO) region reached US$11,4 billion by 2006, r esulting in US$4,7 billion deficit. The value of 
                                                      
20 Members of the ECO are: Afghanistan, Azerbaij an, Iran, Kazakhstan, Ky rgyz Republic, Pakistan, 
Tajikistan, Turkmenistan and Uzbekistan alongside Turkey. Turkey WT/TPR/G/192 
 Page 31 
 
 
Turkish exports to this region in 2006 reached US$3, 3 billion, which represents a share of 3,8 in total 
exports. With the entry into force of ECO Trade Ag reement (ECOTA), it is expected that the steady 
increase in Turkish exports to the region will gain momentum. ECOTA will also bring about 
deepening trade relations among ECO member countries.  
Black Sea Economic Cooperation (BSEC)21 
180. As for the Black Sea Economic Cooperation (BSEC), Turkey’s trade with the region 
accelerated with spectacular rates in each year over th e past four years. Of the total trade volume with 
the BSEC countries, having nearly 17,2% share in  Turkey’s total trade volume, in 2006, the 
proportion of imports was nearly 70% causing more than US$15 billion deficits. The value of Turkish 
exports to the BSEC region in 2006 reached US$11,6 billion (13,5% in total exports). In the first 
seven months of 2007, the value of Turkish e xports to the region rose by 54,9% and totalled 
US$8,9 billion. 
Organization of Islamic Conference (OIC)22 
181. Turkey is a founding member of the Organiza tion of Islamic Conference (OIC). In 2006, 
while Turkey’s exports to OIC countries reache d US $15 billion with a 14,9% annual increase, its 
imports from those countries showed a remarkable  increase by 32% and reached US $19,1 billion 
mostly due to drastic increase in world oil prices. Overall, the establishment of a Trade Preferential 
System among the OIC countries by 1 January 2009 w ill have positive effects on Turkey’s exports to 
these countries.  
Developing 8 (D-8)23  
182. On the other hand, trade volume with Developing 8 (D-8) countries in 2006 surged to 
US$11,1 billion by 38% annual increase. While there is a sluggish percentage increase in Turkey’s 
exports to the member countries by 5%, amounting to US$2,2 billion, imports from those countries 
reached US$8,9 billion with a considerable increas e by 50% mainly due to a huge jump of imports 
from Iran. However, the conclusion of the nego tiations on the Preferential Trade Agreement among 
D-8 countries is expected to stimulate Turkey’s exports to D-8 countries.    
(iii) By sectors  
183. Sectoral composition of exports has been changing towards more capital and technology 
intensive products in accordance with the developm ents in global trends in world commerce. The 
share of medium and high-tech products in Turk ish exports moved up from 26% with a value of 
8 billion dollars in 2000 to 35% with  a value of 25 billion dollars, in creasing by more than three folds 
compared to the value in 2000.  
                                                      
21 Members of the BSEC are: Albania, Armenia, Azerbaijan, Bulgaria, Georgia, Hellenic Republic, 
Republic of Moldova, Romania, Russian Federation, Serbia, and Ukraine alongside Turkey. 
22 Members of the OIC are: Afghanistan, Albania, Algeria, Azerbaijan, Bahrain, Bangladesh, Benin, 
Brunei, Burkina Faso, Cameroon, Chad, Comoros, Cote  D’Ivoire, Djibouti, Egypt, Gabon, Gambia, Guinea, 
Guinea-Bissau, Guyana, Indonesia, Iran, Iraq, Jordan, Kazakhstan, Kuwait, Kyrgyz Republic, Lebanon, Libya, 
Malaysia, Maldives, Mali, Mauritania, Morocco, Mozamb ique, Niger, Nigeria, Oman, Pakistan, Palestine, 
Qatar, Saudi Arabia, Senegal, Sierra Leone, Somalia, Sudan, Suriname, Syria, Tajikistan, Togo, Tunisia, 
Turkmenistan, Uganda, United Arab Emirates , Uzbekistan and Yemen alongside Turkey. 
23 Members of the D-8 are: Bangladesh, Egypt, In donesia, Iran, Malaysia, Nigeria, Pakistan and 
Turkey. WT/TPR/G/192 Trade Policy Review 
Page 32 
 
 
184. In the recent years, the share of "machine ry and transport equipment", a product group 
dominated by high value added and high-tech produ cts, increased from 23,9% in 2002 to 30,5% in 
2006. "Machinery and transport equipments", which is a capital-intensive sector, has become the 
largest component of Turkish exports since 2004, surpassing "textiles and clothing". But it is 
particularly the "automotive industry products" that played the most significant role in increasing the 
share of this relatively high capital-intensive produc t group. While the average annual rate of increase 
for total exports in 2002-06 was approximately 24%, it was 38,5% for "automotive products" and 
28,7% for "electrical machinery and apparatus". 
185. The total share of "automotive industry produc ts", "office machines and telecommunications 
equipment" and "chemicals" increased continuo usly from 17,5% to about 21,9% between 2002 and 
2006. Clothing, automotive products, iron and steel ar e the products with the largest weight in the 
exports of industrial products. Wh ile the shares of these sectors in exports were 22,4%, 8,8% and 
7,9% in 2002 respectively, they were 14,1%, 13,7% and 8,5% in 2006.  
186. Turkey has also been making e fforts for the smooth adjustment of its labour-intensive exports 
sectors such as textiles and clothing. Both Turkish polic y makers and private sector work to adjust to 
the new circumstances and to transform the sect or towards "niche" markets that promise higher 
productivity and higher returns.  
187. In the period between 2002 and 2006, imports also increased significantly due to various 
reasons. First of all, the economic growth fed the need for intermediary and capital goods. Secondly, 
higher income levels accompanied with the pos tponed purchases in 2001 crisis caused a boom in 
domestic demand in the following years. Also, th e appreciation of Turkish Lira created a cost 
advantage for imports. Energy prices rose dramatically  pushing the cost of energy imports up in the 
world. 76 billion US dollars of the rise in imports  between 2002 and 2006 is due to intermediary and 
capital goods and 19,4 billion US dollars of this increase  are completely attributable to fuels and oil. 
Meanwhile, energy imports increased  three folds from 9,2 billion dollars to 28.6 billion US dollars 
and constituted more than one fi fth of total imports in 2006. 
188. In 2006, 16,7% of imports were  capital goods, 71,3% were in termediary goods and 11,6% 
were consumption goods. Due to the import depe ndency in industrial production, growth in 
production triggers growth in imports.  In the sa me period, intermediary and capital goods marked 
20,8 and 13,8% increases, respectively. APPENDIX TABLES Turkey WT/TPR/G/192 
 Page 35 
 
 
Table 1 
FDI Inflows and their distribution by components between 1995-06 
(Million US$) 
 1995-00 2001 2002 2003 2004 2005 2006 
Foreign Direct Investment (Net)  5.117 3.352 1.137 1.752 2.883 9.803 20.070 
Foreign Direct Capital 5.117 3.352 1.137 754 1.540 7.962 17.148 
Capital (Net) 5.117 3.352 617 737 1.191 8.200 17.062 
Inflow 6.173 3.374 622 745 1.291 8.536 17.719 
Outlow -1.056 -22 -5 -8 -100 -336 -657 
Other Capital .. .. 520 17 349 -238 86 
Real Estate (Net) .. .. .. 998 1.343 1.841 2.922 
 WT/TPR/G/192 Trade Policy Review 
Page 36 
 
 
Table 2 
The number of companies established with foreign capital 
Year Number of companies 
1954-2000 (cumulative) 4.588 
2001 477 
2002 495 
2003 1.105 
2004 2.095 
2005 2.845 
2006 3.350 
Total number 14.955 
 Turkey WT/TPR/G/192 
 Page 37 
 
 
22979412673476394412490
8095
02000400060008000100001200014000
1985-
1994 avg.1995-
2003 avg.2004 2005* 2006 2007 2007**million US $Table 3 
Privatization implementations by years 
 
 
* The 15.5 years Transfer of Operating Ri ghts (TOR) of Ataturk Airport (USD 3 billi on) and Initial Public Offering (IPO) of 
 Vak ıflar Bank’s 25.18% share (USD 1.3 billion) are included.  
** Total value of privatization transactions that is  awaiting approval or comple tion (at handover phase).   WT/TPR/G/192 Trade Policy Review 
Page 38 
 
 
Table 4 
The privatization program in big-ticket items (2007- 09)  
 Name of the company/institution Field of activity-operation 
1 PETK İM Petrokimya Holding A. Ş. (51 percent) Petrochemicals 
2 TEKEL Tütün, Tütün Mamülleri Genel Md Tobacco and Tobacco Products 
3 Milli Piyango İdaresi Lottery Games 
4 Turkish Airlines (THY) Civil Aviation/Flag Carrier 
5 TEDA Ş / Electricity Distribution (20 regional companies) Electricity Distribution 
6 Electricity Generation (EÜA Ş) Power Generation 
7 Ports of Samsun, Band ırma, İskenderun and Derince Harbor/Seaport Operations 
8 Türkiye Şeker Fabrikalar ı A.Ş. (34 sugar processing f acilities) Sugar processing 
9 TDI / Sal ıpazar ı-Galataport Cruiseport/Tourism Complex 
10 Sumer Holding’s Phosphate Facilities (t ransfer of management rights) Mining 
11 T. Halk Bankas ı A.Ş. (75.01 per cent) Banking 
12 Toll Motorways & Bridges Toll Road Cons truction, Maintenance & Repair/Operations 
13 Türk Telekom A. Ş. (IPO of 45 percent of the shares ) Telecommunications 
 Turkey WT/TPR/G/192 
 Page 39 
 
 
Table 5-A 
Year Exports Imports Balance Volume of trade Imports covered by 
exports 
 Value Change 
(%) Value Change 
(%) Value Change 
(%) Value Change 
(%) (%) 
2002 36 059 089 15.1 51 553 797 24.5 - 15 494 708 53.9  87 612 886 20.5 69.9 
2003 47 252 836 31.0 69 339 692 34.5 - 22 086 856 42.5  116 592 528 33.1 68.1 
2004 63 167 153 33.7 97 539 766 40.7 - 34 372 613 55.6  160 706 919 37.8 64.8 
2005 73 476 408 16.3 116 774 
121 19.7 - 43 297 743 26.0  190 250 559 18.4 62.9 
2006 85 528 416 16.4 139 480 
247 19.4 - 53 951 945 24.6  225 008 777 18.3 61.3 
 WT/TPR/G/192 Trade Policy Review 
Page 40 
 
 
Table 5-B 
Exports by country groups 
(Value 000 $) 
  2002 2003 2004 2005 2006 
Total 36 059 089 47 252 836 63 167 153 73 476 408 85 528 416 
A-E.U COUNTRIES* 18 458 533 24 484 137 32 589 043 38 394 518 43 999 151 
B-FREE ZONES IN TURKEY 1 438 477 1 928 266 2 563 637 2 973 224 2 967 219 
C-OTHER COUNTRIES 16 162 079 20 840 433 28 014 472 32 108 666 38 562 046 
   1-Other European Countries 4 563 472 6 271 621 8 499 225 8 825 747 11 891 615 
   2-North African Countries 1 266 596 1 576 974 2 203 356 2 544 398 3 096 665 
   3-Other African Countries  430 060  554 243  764 791 1 086 849 1 469 127 
   4-North American Countries 3 596 000 3 972 875 5 206 705 5 275 698 5 439 399 
   5-Central America and Caraips  196 883  166 016  333 715  410 753  548 451 
   6-South American Countries  120 951  130 540  192 754  273 783  340 598 
   7-Near And Middle Eastern Countries 3 439 789 5 464 810 7 921 284 10 184 230 11 315 185 
   8-Other Asian Countries 1 789 998 2 347 927 2 544 121 3 028 878 3 941 514 
   9-Australia and New Zeala nd  121 669  158 098  264 495  270 794  327 020 
   10-Other Countries  636 661  197 329  84 026  207 536  192 474 
Selected country groups           
 OECD Countries 23 551 240 30 424 741 40 518 488 44 354 995 54 475 349 
 EFTA Countries  409 043  538 086  666 588  820 849 1 189 172 
Organization of Black Sea Economic 
Cooperation 3 598 969 5 044 444 6 778 995 8 619 516 11 583 000 
Economic Cooperation Organization  1 041 911 1 569 221 2 206 321 2 669 869 3 340 505 
Commonwealth of  Independent States 2 278 878 2 962 593 3 961 619 5 056 779 6 992 480 
Turkic Republics  619 345  899 114 1 194 307 1 409 257 1 981 561 
Organization of Islamic Conference 4 725 287 7 204 574 10 214 345 13 061 019 15 006 891 
Asia-Pacific Countries 1 518 449 1 904 784 2 041 627 2 493 282 3 013 944 
Middle East  3 105 136 4 994 251 7 317 642 9 384 326 10 211 936 
Africa 1 695 316 2 128 559 2 967 475 3 631 063 4 564 705 
Neighbouring and Surrounding Countries 9 268 545 13 507 968 18 919 251 24 121 261 29 379 574 
D-8   976 608 1 330 839 1 592 490 2 115 125 2 225 283 
* EU-25 for 2005-06 / EU-15 for 2002-04. Turkey WT/TPR/G/192 
 Page 41 
 
 
Table 5-C 
Imports by country groups  
(Value 000 $) 
 2002 2003 2004 2005 2006 
Total   51 553 797   69 339 692   97 539 766 116 774 121 139 480 247 
A-E.U COUNTRIES*   23 321 035   31 695 936   42 359 420 49 220 093 55 007 820 
B-FREE ZONES IN TURKEY    574 504    588 912    811 460  760 060  943 964 
C-OTHER COUNTRIES   27 658 258   37 054 844   54 368 886 66 793 969 83 528 463 
   1-Other European Countries   9 855 144   13 785 701   21 500 249 23 861 577 30 022 236 
   2-North African Countries   2 138 099   2 518 707   3 231 235 4 212 112 4 878 372 
   3-Other African Countries    558 078    819 763   1 589 145 1 835 122 2 526 121 
   4-North American Countries   3 420 584   3 740 706   5 114 159 5 822 698 6 931 952 
   5-Central America and Caraips    103 054    169 378    209 040  287 280  334 909 
   6-South American Countries    541 251   1 012 373   1 271 462 1 747 404 2 129 737 
   7-Near And Middle Eastern Countries   3 185 675   4 455 199   5 584 836 7 966 854 10 567 685 
   8-Other Asian Countries   6 529 948   9 643 755   15 500 398 20 581 162 25 633 682 
   9-Australia and New Zealand    313 072    246 974    301 553  321 399  398 548 
   10-Other Countries   1 013 352    662 288    66 810  158 360  105 221 
Selected country groups            
 OECD Countries   32 984 638   43 899 441   59 649 528 66 106 955 77 737 936 
 EFTA Countries   2 511 999   3 395 678   3 911 430 4 439 552 4 520 181 
Organization of Black Sea Economic 
Cooperation   6 587 757   9 297 694   15 368 136 20 480 090 27 017 434 
Economic Cooperation Organization    1 548 166   2 735 688   3 217 953 5 108 258 8 100 631 
Commonwealth of Independent States   5 554 504   7 777 111   12 926 894 17 252 743 23 371 922 
Turkic Republics    467 790    623 295    753 526 1 267 479 1 967 519 
Organization of Islamic Conference   6 071 754   8 195 006   10 630 643 14 459 182 19 108 457 
Asia-Pacific Countries   6 394 436   9 333 518   14 929 502   19 880 505   24 287 238 
Middle East    2 983 177   4 058 675   5 142 629   7 391 305   9 882 350 
Africa   2 696 158   3 338 424   4 820 378   6 047 202   7 404 486 
Neighbouring and Surrounding Countries   12 779 177   17 326 570   26 058 910   34 998 151   45 815 887 
D-8    1 942 488   3 348 149   4 006 276   5 922 517   8 910 570 
* EU-25 for 2005-05 / EU-15 for 2002-04. WT/TPR/G/192 Trade Policy Review 
Page 42 
 
 
Table 5-D 
Exports by SITC, Rev.3 
 2002 2003 2004 2005 2006 
Total 36,059,089 47,252,836 63,167,153 73,476,408 85,528,416 
1- AGRICULTURAL PRODUCTS 4,052,177 5,257,071 6,501,210 8,308,537 8,633,253 
    i-Food  3,668,133 4,734,867 5,891,437 7,713,648 7,931,538 
             (0)  Food and live animals 3,117,647 3,943,522 5,044,160 6,512,312 6,594,497 
                   (00) Live animals 31,333 8,217 7,311 5,180 8,515 
                   (04) Cereals and cereal preparations 298,667 408,982 520,191 891,873 876,054 
                   (05) Vegetables and fruit 2,061,864 2,567,804 3,405,374 4,373,537 4,260,901 
                   (06) Sugars, suga r preparations and honey 183,281 225,864 236,688 211,427 282,690 
                   (08) Animal foods 12,902 14,448 11,592 17,583 10,361 
                   (01, 02, 03, 07, 08, 09) Others   529,599 718,207 863,004 1,012,713 1,155,975 
             (1)  Beverages and tobacco 426,112 488,61 3 590,940 736,445 819,962 
                   (11) Beverages 40,764 69,804 113,091 146,398 135,072 
                   (12) Tobacco a nd tobacco manufactures 385,34 8 418,809 477,848 590,047 684,890 
             (4)   Animal and vegeta ble oils, fats, waxes 97,870 254,730 205,450 405,300 437,581 
             (22) Oil seeds and oleaginous fruits  26,504 48,002 50,887 59,592 79,498 
    ii-Agricultural Raw Materials 384,044 522,204 609,773 594,889 701,715 
             (21) Hides, skins and furskins, raw 34,300 34,046 30,378 24,682 18,912 
             (23) Crude rubber 4,665 5,024 8,431 7,205 13,248 
             (24) Cork and wood 36,427 21,152 21,230 25,221 28,841 
             (25) Pulp and waste paper 738 637 659 937 1,191 
             (26) Textile fibres and their wastes 231,683 363,063 442,057 435,877 540,787 
             (29) Crude animal a nd vegetable materials 76,230 98,282 107,019 100,966 98,736 
2- MINING PRODUCTS 1,497,038 2, 011,127 2,894,572 4, 563,651 6,511,014 
      i- (27, 28) Metalliferous ores and metal scrap 454,687 573,429 800,992 1,005,62 4 1,497,338 
     ii- Mineral fuels, lubricants and relate d materials (3) 691,466 980,128 1,429,137 2,641,024 3,566,212 
             (32) Coal, c oke and briquettes 1,569 1,492 2,593 4,881 2,605 
             (33) Petrol eum, petroleum products and related 
materials 650,648 819,452 1,111,251 2,027,439 3,260,126 
             (34) Gas, natural and manufactured 23,407 139,094 255,121 505,260 179,910 
             (35) Electric current 15,841 20,090 60,171 103,444 123,570 
     iii-Non-ferrous metals (68)  350,885 457,569 664,44 3 917,003 1,447,464 
3- MANUFACTURES 30,287,645 39,593,975 53,486,569 60,116,350 69,319,404 
    i-Iron and steel (67) 2,831,431 3,342,453 6,049,737 5,827,036 7,238,821 
     ii-Chemicals 1,522,905 1,893,457 2,566,143 3,060,488 3,923,008 
             (57, 58) Plastics 404,812 544,537 780,361 1,038,182 1,443,695 
             (54) Pharmaceutical products 163,988 219,637 289,194 316,818 354,691 
             (51, 52, 53, 55, 56, 59) Other chemicals 954,106 1,129,283 1,496,588 1,705,488 2,124,622 
     iii-Other semi-manufactures 3, 139,148 4,142,901 5,490,338 6,589, 383 7,583,233 
             (61) Leather, leather manufactures, n.e.s. and 
dressed furskins 46,799 68,752 84,189 102,689 144,311 
             (62) Rubber manufactures, n.e.s. 509,158 678,445 832,409 1,000,614 1,178,082 
             (63) Cork and wood manufactures  82,447 124,399 182,221 224,614 307,076 
             (64) Pape r and paperboard and articles of 
paper-pulp, of paper 307,141 373,785 462,434 560,406 600,235 
             (66) Non-metallic mineral manuf actures, n.e.s. 1,310, 558 1,602,479 2,049,54 8 2,390,069 2,477,208 
                    (661) Lime, cement and fabricated 
construction materials 558,437 674,672 919,403 1,185,581 1,219,328 
                    (664, 665) Glass and glassware 412,793 483,728 563,995 579,701 631,242 
                    (66-(661+664+665)) Others 339,329 444,080 566,150 624,788 626,638 
             (69) Manufactures of metals, n.e.s.  883,045 1,295,040 1,879,537 2,310,990 2,876,322 
     iv- Machinery and transport equipment 8,631,878 12,370,228 18,275,356 21,608,983 26,383,400 
             (781, 782, 783, 784, 7132, 7783) Automotive 
products  3,173,903 4,927,921 8,098,640 9,370,454 11,688,731 
             (75, 76, 776) Office machines and 
telecommunications equipment 1,607,002 1,978,111 2,926,062 3,209,461 3,159,192 
             Other machinery and transport equipment 3,850,973 5,464,196 7,250,654 9,029,067 11,535,477 
             (71-713) Power generating machinery 182,617 245,769 353,601 502,381 666,511 
             (72, 73, 74) Other non-electrical machinery 1,110,385 1,599,433 2,191,892 2,794,961 3,451,061 
             (79, 785, 786, 7131, 7133, 7138, 7139) Other 
transport equipment 946,931 1,542,636 2,043,354 2,545,989 2,990,355 
             (77- (776+7783) ) Electrical machinery and 
aparatus 1,611,040 2,076,359 2,661,807 3,185,736 4,427,549 
    Table 5-D (cont'd) Turkey WT/TPR/G/192 
 Page 43 
 
 
 2002 2003 2004 2005 2006 
      v- Textiles (65) 4,268,29 1 5,261,671 6,428,486 7,075,525 7,584,345 
     vi- Clothing (84) 8,093,656 9,961,748 11,193,386 11,833,106 12,049,369 
             (848.1, 848.3) Articles of apparel, clothing 
accessories & other articles of furskins; artificial fur and 
articles thereof 388,610 405,711 382,949 364,527 386,414 
             (84-(848.1, 848.3)) Other clot hing apparels 7,705,046 9,556,037 10,810,437 11,468,579 11,662,955 
     vii - Other consumer goods  (81, 82, 83, 85, 87, 88, 
89 (-891) ) 1,800,337 2,621,518 3,483,122 4,121,831 4,557,229 
             (81) Prefabricated buildings; sanitary plumbing, 
heating and lighting fixtures 270,482 528,070 740,046 833,932 1,003,100 
             (82) Furniture and parts thereof 288,496 451,719 604,569 706,897 788,150 
             (83) Travel goods, handbags and similar 
containers 42,858 45,788 60,429 81,383 96,320 
             (85) Footwear 131,884 183,788 204,917 215,793 237,069 
             (87) Prof essional, scientific and controlling 
instruments and apparatus 64,677 101,516 135,216 151,883 195,402 
             (88, 89-(891)) Other manufactured articles 1,001,940 1,310,636 1,737,945 2,131,943 2,237,188 
4- OTHER PRODUCTS  (9+891) 222, 229 390,663 284,801 487,869 1,064,744 
 WT/TPR/G/192 Trade Policy Review 
Page 44 
 
 
Table 5-E 
Import by SITC  
(Value 000 $) 
 2002 2003 2004 2005 2006 
Total 51,553,797 69,339,692 97,539,766 116,774,151 139,480,361 
1- AGRICULTURAL PRODUCTS 3,994,918 5,264,725 6,058,610 6,480,289 7,283,672 
    i-Food  1,911,733 2,791,141 3,089,433 3,283,882 3,485,474 
             (0)  Food and live animals 1,055,486 1,603,760 1,817,345 1,615,498 1,729,140 
                   (00) Live animals 15,932 11,845 9,782 14,074 15,546 
                   (04) Cereals and cereal preparations 392,020 721,548 557,634 226,296 211,783 
                   (05) Vegetables and fruit 141,967 131,262 161,481 283,764 347,235 
                   (06) Sugars , sugar preparations and honey 20,451 35,539 38,579 45,987 40,330 
                   (08) Animal foods 144,068 199,875 401,458 341,484 316,518 
                   (01, 02, 03, 07, 08, 09) Others   341,048 503,691 648,411 703,893 797,728 
             (1)  Beverages and tobacco 218,013 250,24 8 270,022 298,876 295,909 
                   (11) Beverages 10,097 15,370 30,744 23,372 39,647 
                   (12) Tobacco a nd tobacco manufactures 207,91 6 234,878 239,278 275,504 256,263 
             (4)   Animal and vegeta ble oils, fats, waxes 414,760 512,099 531,907 744,730 932,619 
             (22) Oil seeds and oleaginous fruits  223,474 425,034 470,159 624,778 527,806 
    ii-Agricultural Raw Materials 2,083,186 2,473,585 2,969,177 3,196,406 3,798,197 
             (21) Hides, skins and furskins, raw 453,149 440,561 396,850 293,296 336,191 
             (23) Crude rubber 182,569 256,390 343,834 445,836 614,539 
             (24) Cork and wood 121,167 165,530 287,351 361,578 475,729 
             (25) Pulp and waste paper 191,730 187,335 221,372 278,094 346,338 
             (26) Textile fibres and their wastes 1,030,837 1,285,400 1,564,434 1,642,916 1,834,033 
             (29) Crude animal a nd vegetable materials 103,734 138,368 155,337 174,688 191,368 
2- MINING PRODUCTS 11,656,1 41 15,247,840 20,176, 701 28,100,899 38,600,460 
      i- (27, 28) Metalliferous ores a nd metal scrap 1,362,414 2, 262,073 3,530,82 3 3,839,712 4,863,052 
     ii- Mineral fuels, lubricants and rela ted materials (3) 9,203,594 11,574,886 14,407,061 21,254,831 28,859,194 
             (32) Coal, coke and briquettes 749,192 985,990 1,316,623 1,686,889 2,054,506 
             (33) Petrol eum, petroleum products and related 
materials 5,410,836 6,578,868 8,635,900 12,412,477 16,608,314 
             (34) Gas, natural and manufactured 2,915,351 3,966,576 4,438,856 7,137,257 10,177,750 
             (35) Electric current 128,215 43,453 15,683 18,208 18,624 
     iii-Non-ferrous metals (68)  1,090,133 1,410,881 2,238,816 3,006,357 4,878,214 
3- MANUFACTURES 34,023,230 45,830,581 67,416,889 78,044,814 89,161,344 
    i-Iron and steel (67) 2,198,467 3,282,592 5,324,867 6,746,639 8,139,066 
     ii-Chemicals 7,908,534 10,427,243 14,211,039 16,438,225 18,384,425 
             (57, 58) Plastics 2,063,865 2,836,895 4,226,227 5,183,916 6,217,350 
             (54) Pharmaceutical products 1,721,199 2,302,560 3,036,134 3,184,483 3,332,417 
             (51, 52, 53, 55, 56, 59) Other chemicals 4,123,469 5,287,788 6,948,677 8,069,825 8,834,658 
     iii-Other semi-manufactures  2,680,708 3,489,434 4,789,813 5,796,149 7,170,185 
             (61) Leather, leather manufactures, n.e.s. and 
dressed furskins 296,458 295,700 274,790 269,315 345,780 
             (62) Rubber manufactures, n.e.s. 330,381 496,710 697,430 736,720 909,245 
             (63) Cork and wood manufactures  112,316 177,118 285,749 439,495 464,799 
             (64) Paper and paperboard and articles of paper-
pulp, of paper 831,449 1,140,165 1,498,060 1,737,914 2,009,525 
             (66) Non-metallic mine ral manufactures, n.e.s. 379,968 479,730 686,581 968,634 1,363,911 
                    (661) Lime, cement and fabricated 
construction materials 28,791 37,960 61,344 123,421 287,261 
                    (664, 665) Glass and glassware 150,827 211,814 312,391 402,339 490,165 
                    (66-(661+664+665)) Others 200,351 229,957 312,846 442,875 586,485 
             (69) Manufactures of metals, n.e.s.  730,137 900,011 1,347,203 1,644,070 2,076,925 
     iv- Machinery and transport equipment 15,609,827 21,509,824 33,704,570 38,028,187 42,994,840 
             (781, 782, 783, 784, 7132, 7783) Automotive 
products  2,794,058 6,208,805 11,511,934 11,973,233 12,916,179 
             (75, 76, 776) Office machines and 
telecommunications equipment 3,200,063 4,118,700 6,097,615 6,873,367 7,543,970 
             Other machinery and transport equipment 9,615,707 11,182,319 16,095,020 19,181,588 22,534,691 
             (71-713) Power generating machinery 1,276,807 758,059 858,725 1,082,538 987,346 
             (72, 73, 74) Other non-electrical machinery 5,516,065 7,344,696 9,332,071 10,949,986 12,898,004 
             (79, 785, 786, 7131, 7133, 7138, 7139) Other 
transport equipment 1,201,579 1,011,762 2,647,662 2,829,348 3,440,464 
             (77- (776+7783) ) Electrical machinery and 
aparatus 1,621,255 2,067,802 3,256,562 4,319,716 5,208,876 
   Table 5-E (cont'd) Turkey WT/TPR/G/192 
 Page 45 
 
 
 2002 2003 2004 2005 2006 
      v- Textiles (65) 2, 844,497 3,440,895 4, 169,896 4,441,101 4,674,583 
     vi- Clothing (84) 283,292 422,445 651,348 787,841 1,096,704 
             (848.1, 848.3) Articles of apparel, clothing 
accessories & other articles of furskins; artificial fur and 
articles thereof 24,817 27,040 26,053 38,724 63,000 
             (84-(848.1, 848.3)) Ot her clothing apparels 258,476 395,405 625,295 749,116 1,033,704 
     vii - Other consumer goods  (81, 82, 83, 85, 87, 88, 89 
(-891) ) 2,497,905 3,258,148 4,565,356 5,806,672 6,701,541 
             (81) Prefabricated buildings; sanitary plumbing, 
heating and lighting fixtures 130,842 201,115 289,635 374,692 522,706 
             (82) Furniture and parts thereof 125,608 170,387 282,768 365,048 514,159 
             (83) Travel goods, handbags and similar 
containers 36,829 56,798 122,767 231,756 296,219 
             (85) Footwear 116,479 191,058 303,284 412,786 514,968 
             (87) Prof essional, scientific and controlling 
instruments and apparatus 749,850 945,802 1,304,933 1,681,128 1,798,673 
             (88, 89-(891)) Other manufactured articles 1,338,297 1,692,988 2,261,969 2,741,261 3,054,817 
4- OTHER PRODUCTS  (9+891) 1,879,508 2,996,546 3,887,566 4,148,149 4,434,885 
 
__________