RESTRICTED
WORLD TRADE WT/REG22/6
7February 1997
ORGANIZATION(97-0452)
Original: English Committee onRegional Trade Agreements
CUSTOMS UNION BETWEEN TURKEY AND
THE EUROPEAN COMMUNITY
Questions andReplies
Thefollowing questions, posed orally atthefirstexamination meeting oftheCustoms Union
between Turkey andtheEuropean Community, havebeentransmitted inwriting totheSecretariat with
therequest thattheybereplied to.Thequestions andreplies setoutbelow areorganized inaccordance
withdocument WT/REG22/5.
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II. Trade Provisions
8. Sector-specific provisions
Imports from Third Parties
Textiles andClothing
1. IsArticle XXIV oftheGATT theonlylegalinstrument upon which Turkey draws onfor
thealignment ofitstextile regime withtheEUandtheimposition ofquantitative restrictions
against third country suppliers?
Thequantitative restrictions (QRs) taken byTurkey intheclothing andtextile sectors are
measures thathavebeentaken toachieve theCustoms Union between theECandTurkey. Therefore
thejustification oftheintroduction ofthesemeasures istobefound inArticle XXIV (seeanswer No.2,
below). However, therestrictions introduced byTurkey arealsocovered bytheprovisions ofthe
Agreement onTextiles andClothing (ATC).
Article 2.4oftheATCsafeguards members 'rights andobligations under theWTO Agreements
annexed thereto andrelevant toGATT 1994 provisions. Itstates that"nonewrestrictions" interms
ofproducts orMembers shallbeintroduced "except under theprovisions ofthisAgreement orrelevant
toGATT 1994 provisions". Thequantitative restrictions taken byTurkey intheclothing andtextile
sectors aremeasures thathavebeentaken toachieve theCustoms Union between theECandTurkey:
theyhave been introduced tofulfil therequirements ofArticle XXIV -a"relevant GATT 1994
provision" -andassucharecovered byArticle 2.4.
2. What arethespecific provision(s) under Article XXIV oftheGATT which intheview
ofTurkey justify itsaction inquestion 1above?
According toArticle XXIV:8(a)(i) acustoms union requires that"duties andother restrictive
regulations orcommerce ...areeliminated withrespect tosubstantially allthetrade ..."between the
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Page2
parties. Furthermore, according toArticle XXIV:8(a)(ii) acustoms union involves theadoption of
"substantially thesameduties andother regulations ofcommerce" byeachofthemembers oftheunion
tothetradeofterritories notincluded intheunion. Since textiles represent 40percentoftotalTurkish
exports totheEC,theirexclusion would inpractice prevent thisagreement frombeing aCustoms Union
interms ofGATT 1994.
With respect tothecoverage ofQRsbyArticle XXIV, theissue oftheintroduction ofnew
quantitative restrictions intheinterests ofthecompletion ofacustoms union hasbeenraised inmany
Working Parties. Atleastbythetimeofthe1986 Working Party examining theaccession ofSpain
andPortugal totheEC,itwasnolonger disputed thatquantitative restrictions formed partofthe"other
regulations ofcommerce" (c.f.GATT Articles XXIV:5(a) and8(a)(i)). Wearepleased thataMember
recognizesthattheinterpretationof"dutiesandotherregulationsofcommerce"shouldnowbeinterpreted
tocover notonlytariffschedules, butalsoallforms oftariff andnon-tariff barriers totrade. (Written
questions relating totheEnlargement oftheEuropean Communities -Accession ofAustria, Finland
andSweden (WT/REG3/2)).
Indeed, according toArticle XXIV:8(a)(i) acustoms union requires thatduties and"other
restrictive regulations orcommerce" areeliminated withrespect tosubstantially allthetrade between
theparties. Byimplication, members ofacustoms union areallowed toapply restrictive measures
otherthanthose which theywould havebeenabletoapply ifthecustoms union hadnotbeenestablished.
Thisinterpretation isfurther confirmed bythestipulation thattheoverall incidence should notbe"more
restrictive" thanthose regulations applied before theformation ofthecustoms union. SoArticle XXIV
allows members ofacustoms union totakerestrictive measures provided thatthese measures arenot
more restrictive onthewhole thanprior totheformation ofthecustoms union (Article XXIV:5(a)).
3. Article XXIV:8(a)(ii) stipulates that"substantially thesame duties andother regulations
ofcommerce areapplied byeachofthemembers oftheunion tothetrade ofterritories
notincluded intheunion". Based onthisprovision, onlysubstantially thesame external
regime needed tobeadopted bymembers ofacustoms union. Assuch, itisinterested
toknow whyTurkey haschosen toalign itstextiles regime withtheEUwhile other sectors
e.g.agriculture, steel, etc.remain subject toseparate regime.
Withrespect toArticle XXIV:8(a), theEU/Turkey customs union includes, interalia,textiles
andclothing products which account forapproximately 40percentofindustrial exports fromTurkey
intotheCommunity. Alsobymeans ofthisinclusion, theEU/Turkey customs union haveeliminated
duties andother restrictive regulations ofcommerce withrespect tosubstantially allthetradebetween
theconstituent territories (Article XXIV:8(a)(i)) andhaveapplied substantially thesame duties and
otherregulationsofcommercetothetradeofterritoriesnotincludedintheunion(ArticleXXIV:8(a)(ii)).
Itistherefore irrelevant forthefulfilment oftheobligations under Article XXIV:8(a)(ii) to
assess thetreatment oftheremaining products suchasagricultural andsteelproducts, which aresubject
totransitional phase-in periods. However, theCommunity ispleased toinform thatprovision ismade
forafullopening oftradeinagricultural products. Intheinterim, thepreviously-existing preferential
regime continues toapply.
Steel products covered bytheTreaty establishing theEuropean CoalandSteel Community
aresubject toanagreement designed tocreate afree-trade area. ThisAgreement between Turkey
andtheEuropean CoalandSteel Community entered intoforce on1August 1996 (Official Journal
No.L/227, 7.9.96) (notified totheWTO on31July1996 (WT/REG22/1/Add.1)). TheAgreement
isintended asthecomplement totheCustoms Union inrespect ofproducts covered bytheEuropean
CoalandSteelCommunity andasatransitional arrangement inrespect ofsuchproducts untiltheTreaty
establishing theEuropean CoalandSteel Community expires intheyear2002.