WT/TPR/M/331/Add.1 9 May 2016 (16-2529) Page: 1/247 Trade Policy Review Body Original: English/French/Spanish 15 and 17 March 2016 anglais/français/espagnol inglés/francés/español TRADE POLICY REVIEW TURKEY MINUTES OF THE MEETING Addendum Chairperson: H.E. Mr. Atanas Atanassov Paparizov (Bulgaria) This document contains the advance written questions and additional questions by WTO Members, and replies provided by Turkey. Organe d'examen des politiques commerciales 15 et 17 mars 2016 EXAMEN DES POLITIQUES COMMERCIALES TURQUIE COMPTE RENDU DE LA RÉUNION Addendum Président: S.E. M. Atanas Atanassov Paparizov (Bulgarie) Le présent document contient les questions écrites communiquées à l'avance par les Membres de l'OMC, leurs questions additionnelles, et les réponses fournies par Turquie. Órgano de Examen de las Políticas Comerciales 15 y 17 de marzo de 2016 EXAMEN DE LAS POLÍTICAS COMERCIALES TURQUÍA ACTA DE LA REUNIÓN Addendum Presidente: Excmo. Sr. Atanas Atanassov Paparizov (Bulgaria) En el presente documento figuran las preguntas presentadas anticipadamente por escrito y las preguntas adicionales de los Miembros de la OMC, así como las respuestas facilitadas por Turquía. WT/TPR/M/331/Add.1 - 2 - QUESTIONS FROM MEMBERS AND ANSWERS PROVIDED BY TURKEY AUSTRALIA TRADE POLICY REVIEW – TURKEY Questions by Australia (March 2016) Questions on Report by Turkey (WT/TPR/G/331) 2.1 Fiscal Policy (Page 3, paragraph 2.7) Question 1 Australia notes the prioritisation of spending programs in education in the Turkish Government’s medium to long-term fiscal strategy. Could Turkey please outline the opportunities for foreign firms wishing to set up education institutions or provide education services on a cross-border basis in Turkey? Turkey’s Answer : Provision of education services is very much related to public service provision in Turkey, whereby private education institutions are required to provide education services on a non-profit basis. Concerning the provision of education services except for higher education, foreign natural or juridical persons, either directly or by forming partnerships with Turkish citizens, may establish “international educational institutions” including vocational and technical schools, only for foreign students and upon the approval of Council of Ministers. With respect to supply of higher education services, “non-profit foundation higher education institutions” may be founded by the enactment of a specific Law, and can only be established by foundations constituted in accordance with Turkish Civil Code. Turkish nationality requirement exists for the administrative board and the president of the non-profit foundation higher education institution. In addition, Turkish citizens are free to obtain diplomas from foreign universities through online education programs. The equivalence of such diplomas are approved by the Council of Higher Education; and, among other criteria, it is required that an equivalent Turkish online education program exists to obtain diploma equivalence for the foreign online education program. Question 2 Does Turkey see a need to increase competition in education services through removing foreign investment restrictions in this sector? Turkey’s Answer : Currently, there are no plans to alter the above-mentioned requirements for the supply of educational services by foreigners. 3 TRADE POLICIES 3.1.1 Doha Development Agenda (Page 8, paragraph 3.10) Question 3 We note that Turkey says it will ratify the Agreement on Trade Facilitation very soon. Can Turkey outline when it is expected to ratify the Agreement on Trade Facilitation? Turkey’s Answer: The ratification process of the Agreement on Trade Facilitation has already been finalized through a Council of Ministers Decree published on 5th March, 2016. The instrument of acceptance will be conveyed to the WTO this week. WT/TPR/M/331/Add.1 - 3 - Questions on Report by Secretariat (WT/TPR/S/331) SUMMARY Foreign Direct Investment (Page 10, paragraph 5 and Page 40, para. 2.57) Question 4 Australia notes that Turkey has a number of initiatives in place for encouraging FDI and that Turkey maintains a relatively open FDI regime in most sectors. However, as the Secretariat Report notes, Turkey continues to impose restrictions in the education, mining, broadcasting, aviation, maritime transport, port services, fishing, accounting, financial, real-estate and electricity sectors. Could Turkey please explain if it plans to take any steps towards removing investment restrictions in these sectors? Turkey’s Answer: As overall assessment of the Turkish Foreign Investment Regime indicates, Turkey has a fairly open FDI regime based on equal treatment of domestic and foreign investors. However there are certain national legislations and regulations relevant to licensing processes and regulations in some sectors, as summarized in Secretariat Report (S331, page 195, Table A2.3). Some of these requirements and restrictions are applied both for foreign and domestic investors such as permission requirements of financial sector and electricity sector. Currently, there is no work carried out regarding further liberalization in these sectors. State-owned Enterprises (Page 11, paragraph 12 and Page 101, paragraph 3.3.4.2) Question 5 Australia notes that state-owned enterprises continue to be involved in a number of sectors of the Turkish economy, including: mining, oil and gas, agriculture, manufacturing, transport and banking. Australia welcomes improvements in terms of transparency and accountability and notes the progress made in Turkey’s privatisation policy, especially in the electricity distribution and power generation industries. Could Turkey please provide an update and any further information on its privatisation program for other sectors? Turkey’s Answer: Please find below the relevant information. Milli Piyango (National Lottery) In accordance with Privatization High Council (PHC) decision, the privatization of national lottery operation will only include the license that transfers the rights to plan and organize the games of chance and execute draws and install systems of games of chance and operation activities. Any asset and liability of National Lottery Administration will not be subject to privatization. The license will be granted to the bidder in the form of a profit sharing method and the duration of the license will be 10 years. The license includes passive drawing game, instant scratch card game, lotto and super lotto, numeric games and new games to be introduced. Regarding the privatization through licensing of National Lottery, Privatization Administration (PA) and General Directorate of the National Lottery Administration are still working on preparatory work in order to determine matters such as privatization method and the method of payment to be applied for the tender. The Port Sector The technical studies to privatize Izmir (operated by Turkish State Railways) and Tekirdağ (operated by TDİ-Turkish Maritime Inc.) Ports will be completed soon. The tender invitations for those ports will be made in 2016. General Directorate of Turkish Electromechanics Industry (TEMSAN) The Company is engaged primarily in the manufacturing of electromechanical parts used in the construction of hydropower dams. The entire shares (100%) of TEMSAN are fully owned by Turkish Privatization Administration. The technical studies to privatize TEMSAN’s shares are continuing. Turkey Petroleum Oil Distribution Co. (TPAO-Türkiye Petrolleri Petrol Dağıtım A.Ş.) Turkish Petroleum Oil Distribution Company which is recently taken into privatization portfolio is WT/TPR/M/331/Add.1 - 4 - engaged in the oil and gas distribution. The technical studies are continuing together with consultants. CH 3 TRADE POLICIES AND PRACTICES BY MEASURE 3.1.2 Trade facilitation (Page 48, Paragraph 3.18) Question 6 We note that Turkey has notified its Category A commitments under the WTO Agreement on Trade Facilitation and can implement all Articles fully except for Article 7.9 relating to perishable goods. Does Turkey have a timeframe when it believes it will be able to implement Article 7.9? Turkey’s Answer: Turkey has notified all the commitments of the WTO Trade Facilitation Agreement under Category A, with the exception of its commitments relating to perishable goods for which Category B notification has been made. Although there is not a specific timeframe for the implementation of the commitments under the Article 7.9 on perishable goods, Turkey considers that commitment a priority issue and intends to issue a legislative regulation as soon as possible. In the meantime, Turkey will continue to grant priority to perishable goods at the customs. 3.1.9.7 WTO and Bilateral Agreements (Page 75, paragraph 3.9.4) Question 7 Can Turkey clarify its policy on providing mutual recognition of conformity assessment bodies for Good Manufacturing Practice certification for manufacturers of human and veterinary medicines and medical products? Turkey’s Answer: The GMP certificate is a document required for obtaining the pharmaceutical product license. The objective of the relevant legislation on the issuance of the GMP certificates is to protect human health and safety through meeting effectiveness and safety criteria. Ministry of Health of Turkey has been conducting GMP inspections since 1995 in accordance with the GMP Guidelines for Pharmaceutical Products which comply with the relevant guidelines of the World Health Organization (WHO) and in line with that of the EU. Until March 2010, in the applications