. /.   WORLD TRADE  
ORGANIZATION  WT/REG240/3 
12 October 2009 
 (09-4928) 
Committee on Regional Trade Agreements Original:   English 
  
 
FREE TRADE AGREEMENT BETWEEN TURKEY AND ALBANIA 
(GOODS) 
 
Questions and Replies
 
 
 
 The following communication, dated 6 October 2009, is being circulated at the request of the delegations of Turkey and Albania.   This document reproduces the follow-up
 question addressed to the Parties following the 
54th Session of the CRTA and the responses submitted. 
 
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Question from the Delegation of the European Communities  
 
1. The representative of the EC  noted from paragraph 29 and Box II.3 of the Factual 
Presentation that there were some discrepancies in the conditions for outward processing with 
respect to rules of origin.  Article 12-13 of Protocol II of the Agreement established that 
outward processing outside the Parties' territor ies normally did not confer originating status 
unless certain conditions were fulfilled.  In addi tion, outward processing was not allowed for 
textile products of HS Chapters 50 to 63.  Howe ver, Box II.3 indicated that outward processing 
was not authorized.  She understood that this should read as the use of outward processing in the context of origin acquisition was limited  and asked the Parties to confirm if her 
understanding was correct and clarify further the conditions for outward processing.  With 
respect to export restrictions, she noted that the Agreement provided for the elimination of 
existing, and the prohibition of new export restri ctions and export taxes which applied only to 
industrial products and asked the Parties to explain the reasons for not extending this 
commitment to agricultural products.  
 
Joint Response from Turkey and Albania  
 
 Article 12 of Protocol II sets out the conditions re lated to territoriality: According to that, as a 
main rule, no outward processing is authorized in  the context of origin acquisition. However, 
notwithstanding the main rule, there is also a tole rance limit of 10% of the ex-works price acquired 
outside the territory of the Parties. According to  that, the acquisition of originating status in 
accordance with the conditions set out  in Title II of Protocol II shall not be affected by working or 
processing done outside Turkey or Albania on materials exported from Turkey or from Albania and subsequently re-imported there, with other cond itions. This makes the use of outward processing 
limited.  
 In addition to this, Article 13 refers to direct transport which provides that products 
constituting one single consignment transported th rough other territories with trans-shipment or 
temporary warehousing under the surveillance of th e customs authorities and operations needed to 
preserve the good conditions of the products pe rmitted in the absence of direct transport. WT/REG240/3 
Page 2  
 
   In this regard, the statement in the Box II. 3 of the factual presentation regarding outward 
processing provides the main rule; however, it should be known that the use of outward processing is 
permitted limitedly in the context of origin acquisition. Indeed, the same situation is also valid in the 
Paragraph 34 and Box II.2 of the EU-Albania Fact ual Presentation, which is on page 11 of that 
document (WT/REG226/1/Rev.1). 
 
Question from the Delegation of the United States 
 
 2. Elimination of only 14.7% and 15.9% of Albania and Turkey’s agricultural tariff lines, 
respectively, is even less ambitious than the elim ination of only 18.7% of Turkey’s agricultural 
tariff lines in its FTA with Tunisia, which was examined in the 53
rd meeting of the CRTA. 
 Although high percentages of the Parties’  overall, current trade may be covered under 
this agreement, it is very unclear to us how su ch minimal coverage of agriculture qualifies as 
satisfying the “substantially all trade” requirement .  In effect, this agreement appears to exclude 
the agricultural sector for most intents and purposes.   
 
 Is it Turkey’s intention to continue on this  path in its future bilateral trade agreements? 
 
 In the year 2008 the share of agricultura l sector in GDP was 9%, while the share of 
agriculture in total employment was 26% in Turkey. On the other hand, the agricultural land is highly 
fragmented and the average farm size is 6 ha. Due to the inherent structural deficiencies, this sector is 
considered as highly sensitive on both economical and social terms. 
  Therefore, while Turkey has liberalized 100 % of all industrial tariff lines, only 15.9% of agricultural tariff lines are duty fr ee within the Turkey-Albania FTA . However, Turkey has also 
granted concessions for certain agricultural products that are of critical importance to Albania. As 
these concessions are granted within tariff quotas they are not reflected in the calculations done by the 
Secretariat.   In fact the concessions granted for Albania c overs 35 % of actual imports from Albania in the 
year 2007. This figure is 26% in 2008, 95 % in 2009 and 31 % in the first 12 months since the entry into force of the FTA (from May 2008-April 2009). 
 
 Given the above mentioned sensitivity of the sect or we believe that concessions granted   to 
Albania by the FTA is considered as a good way to ad just gradually the farmers in Turkey to foreign 
competition. Nevertheless, the relevant Article of th e FTA also encourages parties to further liberalize 
agricultural trade in the future. 
 
 Please also note that Turkey has signed RTAs with 13 countries (including the EU as one), and has exchanged concessions for agricultural produc ts with each of these counties.  Therefore, 
considerable share of total Turkish agricultural im ports is already realized subject to preferential 
customs duties granted in favour of these countries.  
 In that respect, in the future  Turkey will continue to excha nge concessions within the RTAs 
taking into account the sensitivity of the agricultu ral sector in Turkey in our partner countries. 
 
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