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RESTRICTED WT/TPR/S/331 9 February 2016

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RESTRICTED WT/TPR/S/331 9 February 2016 RESTRICTED WT/TPR/S/331 9 February 2016 (16-0830) Page: 1/215 Trade Policy Review Body TRADE POLICY REVIEW REPORT BY THE SECRETARIAT TURKEY This report, prepared for the sixth Trade Policy Review of Turkey, has been drawn up by the WTO Secretariat on its own responsibility. The Secretariat has, as required by the Agreement establishing the Trade Policy Review Mechanism (Annex 3 of the Marrakesh Agreement Establishing the World Trade Organization), sought clarification from Turkey on its trade policies and practices. Any technical questions arising from this report may be addressed to Ms Denby Probst (tel.: 022 739 5847), Ms Katie Waters (tel.: 022 739 5067), Ms Mena Hassan (tel.: 022 739 6522), and Mr John Finn (tel.: 022 739 5081). Document WT/TPR/G/331 contains the policy statement submitted by Turkey. Note: This report is subject to restricted circulation and press embargo until the end of the first session of the meeting of the Trade Policy Review Body on Turkey. This report was drafted in English. WT/TPR/S/331 • Turkey - 2 - CONTENTS SUMMARY ...................................................................................................................... 10 1 ECONOMIC ENVIRONMENT ........................................................................................ 14 1.1 Recent Economic Developments.................................................................................. 14 1.2 Balance of Payments ................................................................................................. 17 1.3 Fiscal Policy ............................................................................................................. 19 1.4 Monetary and Exchange Rate Policy ............................................................................ 20 1.5 Trade Performance ................................................................................................... 20 1.6 Foreign Direct Investment ......................................................................................... 24 2 TRADE AND INVESTMENT REGIME ............................................................................ 27 2.1 General Framework .................................................................................................. 27 2.2 Trade Policy Objectives ............................................................................................. 28 2.3 Trade Agreements and Arrangements .......................................................................... 30 2.3.1 Participation in the WTO ......................................................................................... 31 2.3.2 Regional and preferential agreements ....................................................................... 31 2.3.2.1 Customs Union with the EU .................................................................................. 31 2.3.2.2 Reciprocal trade agreements................................................................................. 33 2.3.2.3 Unilateral preferential regimes .............................................................................. 36 2.3.3 Other agreements and arrangements ........................................................................ 36 2.3.3.1 Turkey-Iran Preferential Trade Agreement .............................................................. 36 2.3.3.2 Economic Cooperation Organization (ECO) .............................................................. 37 2.3.3.3 Developing-8 (D-8) ............................................................................................. 37 2.3.3.4 Organization of Islamic Cooperation (OIC) .............................................................. 37 2.3.3.5 Black Sea Economic Cooperation (BSEC) ................................................................ 38 2.4 Investment Regime .................................................................................................. 38 2.4.1 Overview and framework ........................................................................................ 38 2.4.2 Investment policy .................................................................................................. 39 2.4.3 Investment restrictions ........................................................................................... 40 2.4.4 Investment incentives ............................................................................................ 40 2.4.4.1 Investment schemes ........................................................................................... 40 2.4.4.2 Investment zones ............................................................................................... 42 2.4.4.2.1 Technology Development Zones ......................................................................... 42 2.4.4.2.2 Organized Industrial Zones ................................................................................ 43 2.4.4.2.3 Free Zones ...................................................................................................... 43 2.4.5 Investment promotion ............................................................................................ 44 3 TRADE POLICIES AND PRACTICES BY MEASURE ........................................................ 45 3.1 Measures Directly Affecting Imports ............................................................................ 45 3.1.1 Customs procedures and requirements ..................................................................... 45 3.1.2 Trade facilitation .................................................................................................... 48 3.1.3 Customs valuation ................................................................................................. 49 WT/TPR/S/331 • Turkey - 3 - 3.1.4 Rules of origin ....................................................................................................... 49 3.1.5 Tariffs .................................................................................................................. 50 3.1.5.1 Applied MFN duties .............................................................................................. 50 3.1.5.2 WTO bound duties ............................................................................................... 55 3.1.5.3 Preferential tariffs ............................................................................................... 55 3.1.5.4 Other duties and charges (ODCs) .......................................................................... 56 3.1.5.5 Tariff-rate quotas ................................................................................................ 57 3.1.5.6 Tariff exemptions ................................................................................................ 58 3.1.5.7 Fees and charges for services rendered .................................................................. 58 3.1.6 Other charges affecting imports ............................................................................... 59 3.1.6.1 Value Added Tax ................................................................................................. 59 3.1.6.2 Strip stamps for alcoholic beverages and tobacco products ........................................ 59 3.1.6.3 Special Consumption Tax ..................................................................................... 60 3.1.6.3.1 SCT on petroleum products ................................................................................ 60 3.1.6.3.2 SCT on motor vehicles, aircraft, and vessels ......................................................... 61 3.1.6.3.3 SCT on alcoholic beverages ................................................................................ 63 3.1.6.3.4 SCT on tobacco products ................................................................................... 64 3.1.6.3.5 SCT on durable consumer goods ......................................................................... 64 3.1.6.4 Other taxes and charges ...................................................................................... 65 3.1.7 Import prohibitions, restrictions, and licensing ........................................................... 65 3.1.7.1 Import prohibitions ............................................................................................. 65 3.1.7.2 Import restrictions and licensing ........................................................................... 66 3.1.8 Contingency measures ........................................................................................... 68 3.1.8.1 Anti-dumping and countervailing measures ............................................................. 68 3.1.8.2 Safeguard measures ............................................................................................ 69 3.1.9 Standards and other technical requirements .............................................................. 70 3.1.9.1 Developments .................................................................................................... 70 3.1.9.2 Policy and framework .......................................................................................... 70 3.1.9.3 Alignment with the EU ......................................................................................... 72 3.1.9.4 Controls at the border.......................................................................................... 73 3.1.9.5 Quality infrastructure ........................................................................................... 73 3.1.9.6 Market surveillance ............................................................................................
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