On behalf of the European Union, I would first of all, like to welcome the Delegation of Türkiye, led by Deputy Minister, Mr. Mustafa Tuzcu (Ministry of Trade), as well as my colleague Ambassador Alparslan Acarsoy and his team here in Geneva. I would also like to thank WTO Secretariat and the Government of Türkiye for their reports and the Discussant, H.E. Ambassador Aitzhan, for her remarks.
The EU would also like to extend its congratulations to Türkiye on the 100th anniversary of the foundation of the Republic.
Türkiye remains a key partner for the European Union and a candidate country. The efforts to align to the EU acquis significantly support Türkiye’s implementation of the relevant WTO legal framework.
The EU and Türkiye have shared a Customs Union for almost 30 years. In this timespan, our bilateral trade has grown more than fourfold and reached almost EUR 200 billion last year. The EU remains by far Türkiye’s largest export and import market. The Customs Union has opened huge opportunities for companies based in Türkiye and enabled their integration with the European supply chains.
The EU is also the key investor in Türkiye. Total net foreign direct investments (FDI) into Türkiye were 0.9% of GDP in 2022. Geopolitical uncertainties, the build-up of macroeconomic imbalances and an unpredictable business and regulatory environment at times remain the main obstacles to attracting foreign investment.
In this context, we very much welcome the new economic team and the first decisions aiming to tame inflation and address some macro-economic imbalances. We expect that equivalent “rules-based” approach will be applied to both bilateral and multilateral trade.
The European Commission proposed to modernize the Customs Union and extend it to services, agriculture and public procurement in 2016. In June 2021, European Council reiterated the EU’s readiness to engage with Turkey in a phased, proportionate and reversible manner and recalled the need to address current difficulties in the implementation of the Customs Union, ensuring its effective application to all Member States. We would, therefore, like to convey our strong encouragement to Türkiye to take the necessary measures to fully implement the Customs Union vis-à-vis all EU Member States without delay and in all its aspects.
The particularly worrying trend is an increase in the MFN applied tariff, as set out in the Report, from 12.8% in 2015 to 19.6% in 2022. This increase is caused by the application of additional customs duties by Türkiye, which is a systemic breach of the Customs Union. In addition, the import surveillance measures result in a minimum import reference price for a large number of products.
We welcome Türkiye’s legislative alignment with the EU acquis in areas such as technical regulations and sanitary and phytosanitary (SPS) measures. At the same time, in certain areas this alignment is not fast enough or only partial, including in the area of SPS, as evidenced in the Report.
Regarding Competition Policy, we welcome the fact that legislative alignment with the EU acquis continues in areas such as Antitrust and Mergers. At the same time, there is backsliding and serious concerns in relation to the legislative framework, enforcement capacity and transparency in the field of State aid. In that context, it remains important to achieve an operational legal framework on the control of State aid and to make available an inventory of all aid schemes.
We note that Türkiye has updated its laws on E-Commerce. The EU highlights the importance of ensuring that these rules facilitate cross-border digital trade, that they are implemented in a transparent and objective manner, and that they do not involve unjustified data localisation requirements or other unjustified restrictions to the development of digital trade.
The EU also notes the prominence of transport services, especially maritime transport, in economy of Türkiye. In this regard, the EU would like to stress the importance of maintaining fair and open conditions of access to the Turkish Straits for foreign vessels, including through the application of reasonable and non-discriminatory fees and services.
We invite Türkiye to re-evaluate its stance vis-à-vis the WTO Government Procurement Agreement (GPA) and to consider acceding to the agreement to allow non-discriminatory access to its procurement market for other GPA Parties. Meanwhile, we regret to see further increase in use of protectionist measures in Türkiye, in particular domestic preferences, price advantages for local suppliers and the use of offsets promoting local production in public procurement in Türkiye.
While we welcome the recent and positive legislative changes, there is still room for improvement in protecting Intellectual Property Rights in Türkiye’s territory. Türkiye is a major transit hub and country of provenance for counterfeit goods coming into the European market.
The EU sees Türkiye as a close and important partner in addressing broader economic and sustainability challenges of today. Therefore, our cooperation needs to support the reform of the WTO and ensuring that the MC13 is a success. The rules-based multilateral trading system with a modernised and effective the WTO at its core is the best guardrail against economic fragmentation, and the most direct way for us all to benefit from global trade.
In particular, Türkiye would be a very welcome addition to the Multi-Party Interim Appeal Arbitration Arrangement (MPIA). I would also take the opportunity to welcome the announcement by the Deputy Minister this morning on the ratification of the Fisheries Subsidies Agreement, agreed at the MC12.
Chair,
The European Union looks forward to continuing working with Türkiye to strengthen our productive bilateral relationship and the multilateral trading system. On behalf of the EU, I wish Türkiye a successful 7th Trade Policy Review.
Source: EU mission to the WTO in Geneva – Press and information team