EC-Turkey Customs Union and the WTO system

Transcription

1 EC-Turkey Customs Union and the WTO system by Cécile Rapoport University of Rennes 1- France Workshop on «Current issues in EU-Turkey relations» T.C. Yeditepe University october 2008

2 EC-Turkey Customs Union Association Ankara Association Agreement (1963) Established the institutions of the Association 1st phase of the Customs Union Turkey reinforce its economy in order to support the EEC s competition Additionnal Protocol (1970) 2nd phase of the Customs Union Turkey progressively approximate its legislation to that of the EC Decision 1/95 of EC-Turkey Association Council Final phase of the CU Turkey s alignement with the EC s Customs policy must be completed within a 5 years period

3 DEFINITIONS Customs Union (CU): the substitution of a single customs territory for two or more customs territories, so that duties and other restrictive regulations of commerce are eliminated with respect to substantially all the trade in products originating in such territories Substantially the same duties and other regulations of commerce are applied by each of the members of the union to the trade of territories not included in the union Free Trade Area (FTA): a group of 2 or more customs territories in which the duties and other restrictive regulations of commerce are eliminated on substantially all the trade between the constituent territories in products originating in such territories

4 Main difference between the EC-Turkey CU Association and other EC s FTA Association : Adoption of a common customs policy => Obligation of alignement on the EC relevant acquis

5 As far as WTO rules are concerned, the Association with Customs Union model generates many constraints in comparison with Association with free trade area without really being of much help in the accession process.

6 EC-Turkey Customs Union and the WTO system 1. Impact of WTO Rules on Turkish external trade policy 2. Impact of the EC-Turkey Customs Union on Turkey s WTO obligations

7 1. Impact of WTO Rules on Turkish external trade policy A double legal obligation for Turkey : - Art. 16 paragraph 1 of the 1/95 decision - Art. 1 paragraph 1 of the GATT

8 Art. 16 paragraph 1 of the 1/95 decision 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 within five years as from the date of entry into force of this Decision. This alignment will concern both the autonomous regimes and preferential agreements with third countries. To this end, Turkey will take the necessary measures and negotiate agreements on mutually advantageous basis with the countries concerned. The Association Council shall periodically review the progress made.

9 Article I 1 of the GATT General Most-Favoured-Nation Treatment With respect to customs duties and charges of any kind imposed on or in connection with importation or exportation or imposed on the international transfer of payments for imports or exports, and with respect to the method of levying such duties and charges, and with respect to all rules and formalities in connection with importation and exportation, and with respect to all matters referred to in paragraphs 2 and 4 of Article III,* any advantage, favour, privilege or immunity granted by any contracting party to any product originating in or destined for any other country shall be accorded immediately and unconditionally to the like product originating in or destined for the territories of all other contracting parties.

10 Preferential Trade Agreements Countries Status of Turkey s FTA Related WTO provision EFTA In force (1992) Art. XXIV Israel In force (1997) Art. XXIV FYROM In force (2000) Art. XXIV Croatia In force (2003) Art. XXIV Bosnia-Herzégovina In force (2003) Art. XXIV Palestine In force (2005) Art. XXIV Tunisia In force (2005) Art. XXIV Egypt In force (2007) Enabling clause Syria In force (2007) Art. XXIV Morrocco In force (2006) Art. XXIV Albania In force (2008) Art. XXIV Jordan Negotiating - Lebanon Negotiating - Faeroe Islands Negotiating - South Africa Negotiating - Mexico Negotiating - Chile Negotiating -

11 Declaration regarding Turkey The Community recalls that according to the Customs Union in force between the Community and Turkey, this country has the obligation, in relation to countries which are not members of the Community, to align itself on Common Customs Tariff and, progressively, with the preferential customs regimes of the Community, taking the necessary measures and negotiating agreements on mutually advantageous basis with the countries concerned. Consequently, the Community invites Chile to enter negotiations with Turkey as soon as possible.

12 Alignement on autonomous regimes 1979 Enabling Clause 1. Notwithstanding the provisions of Article I of the General Agreement, contracting parties may accord differential and more favourable treatment to developing countries, without according such treatment to other contracting parties. 2. The provisions of paragraph 1 apply to the following: a) Preferential tariff treatment accorded by developed contracting parties to products originating in developing countries in accordance with the Generalized System of Preferences,(...)

13 2. Impact of the EC-Turkey Customs Union on Turkey s WTO obligations 2.1. WTO disputes affecting the turkish side of the CU 2.2. The never-ending examination of the CU by the Committe on Regional Trade Agreements (CRTA)

14 2. Impact of the EC-Turkey Customs Union on Turkey s WTO obligations 2.1. WTO disputes affecting the turkish side of the CU The example of the India vs. Turkey Case

15 Tariffs applied by the European Union and Turkey Before Customs Union After Customs Union Weighted average tariff rates (%) 5,48% 4,65% Average customs duties collected (Billions ECUs) 12,8 billions ECUs 10,9 billions ECUs Source: WTO Committee on Regional Trade Agreement WT/REG22/11 (2 mai 2006)

16 2. Impact of the EC-Turkey Customs Union on Turkey s WTO obligations 2.2. The never ending examination of the CU by the Committe on Regional Trade Agreements (CRTA) Never-ending for procedural resons inherent to the CRTA functionning Never-ending because of diverging interpretations of Art. XXIV of the GATT Lack of consensus about the meaning of «substantially all the trade»(sat) Lack of consensus about the meaning of «other restrictive regulations of commerce» (ORRC)

17 Lack of consensus about the meaning of «substantially all the trade»(sat) Article XXIV : 8) a) i) 8. For the purposes of this Agreement: (a) A customs union shall be understood to mean the substitution of a single customs territory for two or more customs territories, so that (i) duties and other restrictive regulations of commerce (except, where necessary, those permitted under Articles XI, XII, XIII, XIV, XV and XX) are eliminated with respect to substantially all the trade between the constituent territories of the union or at least with respect to substantially all the trade in products originating in such territories

18 Lack of consensus about the meaning of «other restricive regulations of commerce Article XXIV : 8) a) i) 8. For the purposes of this Agreement: (a) A customs union shall be understood to mean the substitution of a single customs territory for two or more customs territories, so that (i) duties and other restrictive regulations of commerce (except, where necessary, those permitted under Articles XI, XII, XIII, XIV, XV and XX) are eliminated with respect to substantially all the trade between the constituent territories of the union or at least with respect to substantially all the trade in products originating in such territories.

19 Conclusion. EC-Turkey Customs Union and the accession process an opportunity to developp its external trade policy But a constraint as far as WTO system is concerned The functionning of the CU is just a one among others subject of negociations Similar results could have been achieved with a free trade association agreement

20 Thank you!