3.1 Tariff and tariff administrative measures

3.1.1 Tariff peak

The average ad valorem tariff rate on imports currently stands at 10 percent in Turkey. However, Turkey imposes a much higher tariff rates on certain imports, thus forming a tariff peak. These tariff-peak products include agricultural products (25 percent), meat products (227.5 percent), dairy products (170 percent), fruits (61 percent–149 percent), processed fruit juices and vegetables (41 percent–138 percent). Turkey tends to raise tariff rates drastically on imports of agricultural products on the occasion of domestic harvest or a large stock of agricultural products.

3.1.2 Tariff escalation

Turkey adopts tariff escalation to protect specific domestic industries. The average tariff rate for semi- finished goods is 6.4 percent, while the average tariff rate for fully processed products has risen to 13.6 percent. Tariff escalation is most obvious in the case of bulk commodities such as wood products, paper and paper products, petroleum, coal, rubber and plastics.

3.2 Barriers to customs procedures

According to Turkey's customs regulations, goods imported into Turkey shall not, without the agreement of the importer, be sold to any third parties or sent back to the exporter, and if the importer fails to take delivery of the goods within 45 days after the arrival, the customs shall be entitled to sell the goods by auction and the original importer shall have priority in purchasing them. Some importers in Turkey do not pick up the imports under various pretexts for the purpose of buying them at a considerably lower price as the legitimate preferential purchaser when the customs put the imported goods on auction. Such a regulation has, so far, given rise to many trade disputes, incurring heavy losses to Chinese exporters. The Chinese government has taken up the matter with Turkey's customs authorities on a number of occasions, but no satisfactory results have been produced. The Chinese side believes that in international trade only those who possess the title of ownership of the goods, such as a bill of lading, can claim the goods in question. However, Turkey's customs regulations totally disregard whether the importer has actually obtained the title of ownership, unilaterally accord the importer the right to dispose the imports, run counter to normal international trade rules and practices, and put Chinese exporters in an extremely disadvantaged position. The Turkish government should eliminate such a regulation the soonest possible so as to maintain the development of normal trade. In 2005, Turkey placed 15 more categories of imports under customs clearance restriction by means of import surveillance. According to the pertinent Turkish regulations, the decision to impose import surveillance over a particular imported product is made by the Directorate General of Imports of the Undersecretariat of the Prime Ministry for Foreign Trade, but the decision is rather arbitrary because of the absence of detailed rules of evaluation. China's exports of the above 15 categories of products to Turkey valued approximately US$ 90 million in 2005.

In addition, Turkey also implements its surveillance over imports by setting quantitative restrictions. For example, quantitative import restrictions were placed on such products as loud speakers, juicers, toys and combs in 2004. The Chinese side believes that the import surveillance measures have constituted a restriction on relevant Chinese exports and hopes that the Turkish authorities will take measures to make their import surveillance process transparent and fair.

3.3 Technical barriers to trade

In 2004, Turkey made CE marking obligatory for imported toys, medical devices, active implantable medical devices, machinery, low-voltage equipment, and a variety of other products. However, the documents and inspections required under the CE marking system introduced by Turkey differed from those stipulated by the EU, and utter chaos that accompanied the start of this system brought customs clearance to a complete halt. Turkey abolished in 2005 the CE marking requirement for the imports of toy products, but stipulated that certain toys should meet the Law Concerning the Formulation and Implementation of Technical Standards of Imports as issued in the Government Notice dated 11 July 2001 (No. 24459) and the Legislative Regulation on Imported Toys as issued in the Government Notice dated 17 May 2002 (No. 24758) by the Undersecretariat of the Prime Ministry for Foreign Trade. As China is the major exporter of the aforesaid products to Turkey, the frequent changes in Turkey's technical regulations have created business uncertainty and export risks to Chinese exporters, over which the Chinese side expresses its grave concern.

3.4 Sanitary and phytosanitary measures

The Turkish government has a poor track record of notifying other WTO members of proposed technical regulations and phytosanitary measures in accordance with the Agreement on Technical Barriers to Trade, and implementation appears to be arbitrary. Importers report increasing difficulty in obtaining information on sanitary and phytosanitory certifications. The Turkish government often requires laboratory testing on items of imported foods, medicines for people and for animals, allegedly without any scientific basis.

3.5 Trade remedies

By the end of 2005, Turkey has launched altogether 51 trade remedy investigations against China , including 36 anti-dumping investigations, 11 safeguard measure investigations and 4 special safeguard measure investigations, which makes Turkey the fourth largest user of trade remedy investigations against China. The Chinese products involved in the investigations include light industrial products, machinery, metallurgical products, medical products, chemical products and textile products. Turkey still maintains its trade remedy measures on 72 percent of the involved Chinese products.

3.5.1 Anti-dumping

In 2005, Turkey initiated 4 anti-dumping investigations against China, involving pentaerythritol, air-conditioner, motor, and composite wood flooring. In the same year, Turkey issued its final determinations on 6 anti-dumping investigations against Chinese exports of impregnated textile products, zip fasteners, skid chains, tires, color television sets, and pentaerythritol, and imposed anti-dumping duties on the above mentioned Chinese exports to Turkey. For example, according to its final determination, an anti-dumping duty of 50 percent was levied on color television sets, and an anti-dumping duty of 60 percent and 87 percent was respectively levied on different categories of tires involved.

Turkey has pledged in bilateral talks to accord Chinese enterprises the market economy status on a case-by-case basis. However, the Turkish authorities have, up to the present, granted no Chinese enterprises responding to anti-dumping charges the market economy status, including private enterprises run according to the market mechanism and multinational corporations such as TCL, although the Chinese government has taken up the matter with Turkey for many times. In addition, Turkey has never given separate tariff rates to Chinese enterprises that have responded to anti-dumping investigations.

China hopes that Turkey will grant as soon as possible the market economy status to Chinese industries and enterprises involved in anti-dumping cases, and is very dissatisfied with Turkey's persistent refusal to bind the particular Chinese industry or enterprise involved in the case to a separate tariff rate in its decision of anti-dumping investigation.

3.5.2 Safeguard measures

Turkey promulgated in 2004 the amended Decree on Safeguard Measures Against Imports and the Implementation Regulation on Safeguard Measures Against Imports, which serve as its legislative base for initiating safeguard measures. The above decree and regulation provide detailed stipulations on initial investigation application, placing the application on file for investigation, fact-finding visits, confidential information and so on, but they are still inconsistent with WTO's Agreement on Safeguard Measures in a number of important aspects, including but not limited to the following:

(1) Expanding the means of trade remedies in provisional safeguard measures. Turkey's decree and regulation on safeguard measures provide that provisional safeguard measure may take the form of the increase in tariff rates, the raise of extra financial fees, quantitative (price) restrictions on imports, tariff quotas, or any combination of these measures. However, as stipulated in Article 6 of WTO's Agreement on Safeguard Measures, the increase in tariff rates is the only provisional safeguard measure.

(2) Lack of specification of key concepts and investigation procedures when launching safeguard measures. Articles 8, 9 and 12 in WTO's Agreement on Safeguard Measures provide specific stipulations on the level of concession and other obligations, developing country members, notification and consultation, and so forth, but Turkey's decree and regulation on safeguard measures do not provide corresponding stipulations on these important matters.

China hopes that Ankara will fully comply with the relevant stipulations of the relevant WTO agreements to increase transparency of its related laws and regulations, and is greatly concerned with potential problems that may arise in the implementation process of its safeguard measures owing to the inadequacies of its pertinent laws and regulations.

3.5.3 Product-specific transitional safeguard measures

In May 2002, Turkey's President signed and promulgated the Decree on Implementing Surveillance and Safeguard Measures Against Imports from the People's Republic of China, which specifically targets products imported from China. Based on Article 16 in the Protocol on China's Accession to the WTO, Turkey promulgated in June 2003 the Regulation on Surveillance and Safeguard Measures Against Imports from the People's Republic of China, later renamed the Regulation on Safeguard Measures Against Imports from the People's Republic of China, which provides a legal basis for product-specific transitional safeguard measures (hereinafter referred to as "special safeguard investigations") against products of Chinese origin. Without briefing the Chinese side and seeking consultations, Turkey decided on 20 August 2005 to start special safeguard investigations against imports of float glass from China. Although China had taken up the matter with Turkey several times through bilateral channels, Turkey made its final ruling on 23 December in the same year, recommending the adoption of special safeguard measures against Chinese float glass, and launched the consultation process as from the date of the final ruling. If no satisfactory settlement can be reached through consultations between the two sides within 60 days, Turkey would formally adopt special safeguard measures.

China is deeply concerned over the matter and hopes that Turkey will excise restraint in adopting discriminatory safeguard measures so as not to create obstacles to the healthy development of trade between the two countries.

3.5.4 Interim textile special safeguard measures

On 31 December 2004, immediately after promulgating the Regulation on Surveillance and Safeguard Measures Against Textile-Specific Imports, Turkey announced that in accordance with Article 12 in the above regulation, 42 categories of textile products of Chinese origin were placed under import quota restrictions. In December 2005, Turkey circulated a notice, launching again special safeguard measures on textile products. A total of 44 categories of textile products imported from China are to be placed under quota restrictions in 2006, adding 2 new categories to the previous 42 categories. According to Paragraph 242 as contained in the Report of the Working Party on the Accession of China, any WTO members should first demonstrate the presence of "market disruption" before they can adopt transitional textile safeguard measures against Chinese exports. However, Turkey's announcement of the imposition of special safeguard measures did not provide any such relevant supporting information. China demands that Turkey fully comply with Paragraph 242 in the Report of the Working Party on the Accession of China as well as relevant WTO rules and take an extremely prudent attitude when considering the initiation of safeguards against Chinese products. At the same time, Turkey authorized the Secretariat of the Istanbul Union of Exporters in Textiles and Garments to administer the allocation and management of quotas. As the Istanbul Union could be the applicant to the Turkish government for safeguard measures against Chinese textile products, China is extremely concerned with the fairness of the Istanbul Union in its administration of quotas.

3.6 Barriers to trade in services

Turkey abolished in 2003 legal restrictions on the entry of foreigners into professional services, but restrictions on foreigners practicing medicine and law in Turkey still remain.

Chinese-invested companies in Turkey report that Turkey applies very strict standards to the issuance of working visas to Chinese bus iness people and that it is sometimes difficult even for a Chinese trader who has been living in Turkey for a long time to get a work permit. In recent years, it has become increasingly difficult for the Chinese business people to be granted a work permit, which has caused much inconvenience to Chinese enterprises in Turkey. Chinese is deeply concerned over the matter.