WT/TPR/S/44 Trade Policy Review
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II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES
(1) OVERVIEW
1. The customs union with the EU has become the main factor shaping Turkey's foreign trade
policies and orientation within the wider WTO framework.  The customs union decision (CUD)
provides for generally free internal trade and a common external tariff (CET) for industrial and the
industrial component of processed agricultural goods (there is no firm timetable for the integration ofagriculture).  To implement the CUD, Turkey has in a short time span enacted a wide range of trade
and related legislation, aimed at bringing its practices into line with those of the EU.  In this respect,
the adoption of measures approximating the EU " acquis communautaire " will also provide improved
and more secure trading conditions for third countries.  Apart from the CET, Turkey also applies other
external measures of the EU, such as restraints on imports of textiles and clothing, but anti-dumpingmeasures are distinct and also apply on mutual trade.  The CUD also requires Turkey to sign parallel
agreements with countries that have free-trade agreements with the EU;  Turkey has already signed
free-trade agreements with Bulgaria, the Czech Republ ic, Estonia, Hungary, Israel, Latvia, Lithuania,
Romania, the Slovak Republic, and Slovenia.
2. Turkey's legislation governing foreign direct investment has been revised, with a new law
brought into effect in 1995.  The already liberal foreign direct investment policies have been
simplified and bureaucratic formalities streamlined.  However, the continued macroeconomic
imbalances, together with frequent changes in government, are likely to have discouraged foreign
investment.
(2) T
HE INSTITUTIONAL FRAMEWORK
(i) General framework
3. Since Turkey's previous Review, the structure of the legislative and executive bodies remain
unchanged.  Legislative power is vested in the Parliament, which has a single chamber (the Turkish
Grand National Assembly).  Elections must be held every five years, although Parliament may be
dissolved earlier by the Prime Minister or on a vote of confidence.  The Parliament is responsible for
reviewing and changing statutes and law-amending ordinances, and elects the  President for a seven-
year term.  Statutes and law-amending ordinances are prepared as bills by the relevant Ministriesfor presentation to the Parliament.  After approval by Parliament and signature by all Ministers, thePrime Minister and the President, the bills become law, entering into force upon publication in theOfficial Gazette.  Regulations are approved by the Council of Ministers.  The President signsDecrees by the Council of Ministers, and appoints the Prime Minister and other Ministers.
1  The
main executive power rests in the hands of the Prime Minister and the Council of Ministers.
4. Over the past four years, Turkey has enacted important trade and related legislation, in areas
such as customs provisions, duty concessions, offi cially supported export credits, competition policy,
state aid, intellectual property rights, standards, sanitary and phytosanitary measures, and foreign
investment  (Table II.1).  Many of these have been adopted as a result of the customs union betweenEU and Turkey (discussed further below).  Several new bilateral free-trade agreements (Israel,
Hungary, Romania, and Lithuania) covering trade and other areas of cooperation have entered into
force since 1993.  The Marrakesh Agreement establishing the WTO was ratified in 1995.  Changes
have also been made for activities in several sector (Chapter IV).
                                                     
1 Decrees which the President declines to sign do not enter into force.  The President can only refuse to
sign an Act once;  if it is then readopted by the Parliament it is promulgated as law automatically.Turkey WT/TPR/S/44
Page 17
Table II.1
Turkey's main legislation related to trade, 1998
Area Legislation
Main trade legislation Foreign Trade Regulations Law (No. 2976 of 1984) is the main source of legislative action on imports and
exports, including export promotion; it allows the Council of Ministers to authorize the imposition or removalof "additional financial obligations" on foreign trade transactions.
Import regulations Import Regime Decree (No. 7606 of 1995)
Export regulations Regulating the Various Measures Affecting Taxes That  Promote Exports Law (No. 261 of 1963)
Export Regime Decree and Regulation (Official Gazette No. 22532 of 23 January 1996)Export Communiqué (No. 12 of 1996)
Quota and Tariff Quota Administration on Export Decree (No. 6814 of 1995)
Inward Processing Regime Decree (No. 7615 of 1995)Outward Processing Regime Decree (No. 7617 of 1995)
Anti-dumping and
countervailing dutiesPrevention of Unfair Competition in Importation Law (No. 3577 of 1989)
Safeguard measures Safeguard Measures and Surveillance for Imports Decree (No. 6814, 7348, 7432 and 7433 of 1995)
Customs Customs Law (No. 1615 of 1972)
Free-trade zones Free Zones Law (No. 3218 of 1985)
Subsidies Adopting the Agreement on Interpretation and Application of the Articles IV, XVI and XXIII of the GATT
(subsidies code) Decree (No. 9155 of 1985)
State aid State Aids for Investments Decree (No. 6411 of 1994)
State Aid for the Investment of Small and Medium-Sized Enterprises Decree (No. 8615 of 1996)State Aid on Exports Decree (No. 6401 of 1994)
Standards Technical Arrangements and Standardization on Foreign Trade Decree (No. 7794 of 1996)
Sanitary and
phytosanitary measuresSanitary Law (No. 1593 of 1930)
Agricultural Quarantine Law (No. 6968 of 1957)Production, Consumption and Control of Foods Decree (No. 560 of 1995)Turkish Foods Codex Regulation
Government
procurementPublic Procurement (State Adjudication) Law (No. 2886 of 1984)
Protection of
CompetitionProtection of Competition Law (No. 4054 of 1994)
Appointment of Competition Board Decree (No. 9090 of 1997)
Communiqué No. 97/1 on the Mergers and Acquisitions which are subject to permission of the Competition
Board
Communiqué No. 97/2 on the Procedures and Principles on the Agreements, Concerted Practices, Decisions
of Associations of Undertakings according to Article 10 of the Competition Law, related to exemption and
negative clearance.
Communiqué No. 97/3 on Group Exemption for Exclusive Distribution Agreements
Communiqué No. 97/4 on Group Exemption for Exclusive Purchasing AgreementsCommuniqué No. 97/5 on the Establishment of the Organization of the Competition Authority
Communiqué No. 97/6 on the Rights and Obligations of Undertakings and Associations of Undertakings
which arise from the Law No. 4054 after the establishment of the organization of the Competition Authority
Communiqué No. 98/3 on Group Exemption Concerning Motor Vehicle Distribution and Servicing
Agreements
Competition law Protection of Competition Law (No. 4054 of 1994)
Appointment of Competition Board Law (No. 9090 of 1997)
Table II.1 (cont'd)WT/TPR/S/44 Trade Policy Review
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Area Legislation
Intellectual property
rightsTurkish Patent Institute Decree (No. 544 of 1994)
Protection of Patent Rights Decree (No. 551 of 1995)
Protection of Trade Mark Rights Decree (No. 556 of 1995)
Protection of Industrial Designs Decree (No. 554 of 1995)Protection of Geographical Indicators Decree (No. 555 of 1995)
Intellectual and Artistic Works Law (No. 5846 of 1954, amended by Law No. 4110 of 1995)
Additional Penalty Provisions to the Decrees No. 551, 554, 555 and 556 (Law No. 4128)Amendment of the Transition Period of Patent Protection of Pharmaceuticals and Veterinary Products and
Processes (Decree No. 566)
Consumer protection Consumer Protection Law (No. 4077 of 1995)
Foreign Investment Encouragement of Foreign Capital Law (No. 6224 of 1954, revised in July and August 1995)
Foreign Capital Framework Decree (No. 6990 of 1995)Communiqué Concerning Foreign Capital (No. 2 of 1995)
Source:  Government of Turkey.
5. According to the Constitution of Turkey (Article 90), international agreements duly put into
effect carry the force of law in Turkey.  Moreover, no appeal to the Constitutional Court can be made
with regard to these agreements, on the ground that they are unconstitutional. Therefore, as noted by
the authorities, the provisions of the WTO Agreements would apply in the case of any inconsistencies
between domestic law and the Agreements.  However, several domestic laws have been or will be
amended to reflect Turkey's international commitments.
(ii) Economic and trade policy formulation
6. The main characteristics of Turkish institutions have broadly remained the same as described
in the GATT Secretariat report for the previous Trade Policy Review.  The Undersecretariat of
Foreign Trade (UFT) (previously a combined Undersecretariat of Treasury and Foreign Trade
in 1993) is the main governmental body responsible for the formulation and administration of tradepolicy within the framework of international and dom estic laws (Chart II.1).  The Undersecretariat is
responsible for preparing decisions on trade policy, and to this end collects the views of other relevant
Ministries, agencies and subsidiary bodies.  Proposals are presented by the UFT to the Council of
Ministers for their consideration.  Decisions of the Council become decrees upon their publication in
the Official Gazette.  The Ministry of Finance, Undersecretariat of Treasury and the Undersecretariatof the State Planning Organization, the Undersecreta riat of Customs, the Ministry of Industry and
Trade, the Ministry of Agriculture and Rural Affairs, the Central Bank of Turkey, the Turkish Patent
Institute and the Turkish Export-Import Bank take part directly or indirectly in foreign trade policy
formulation and/or its implementation.Turkey WT/TPR/S/44
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Chart II.1
Structure of the Undersecretariat of Foreign Trade, 1998
U ndersecretary
Deputy Undersecretary
Source :  Government of Turkey.Deputy Undersecretary Deputy Undersecretary
General Directorate
of Exports
General Directorate
of Free Z ones
Department of 
Administrative and 
Financial Affairs
Directorate of Free Z ones
Affiliated Organizations
Export Promotion Center
Exporters AssociationGeneral Directorate
of Imports
General Directorate
of EU Affairs
Counsellor of Press and Public
Relations 
Department of Human Resources
Commercial Counsellors Abroad
Counsellor of Legal
Affairs
Board of Foreign Trade
Auditors
Department of Civ il DefenseGeneral Direcorate 
of Agreements
General Direcorate 
of Economic Research and 
Assessment
General Direcorate 
of Standardization in 
Foreign Trade
District DirectoratesWT/TPR/S/44 Trade Policy Review
Page 20
7. The main legislation relating to  international trade is the Foreign Trade Regulations Law
(No. 2976 of 1984).  The law provides for the development and regulation of foreign trade, including
export promotion, as well as the imposition or removal of "additional financial obligations" on foreign
trade transactions.  The main import legislation is normally introduced on an annual basis.  During the
year, tariffs and other import regulations may be amended by the Council of Ministers, based on
proposals by the UFT;  these amendments are published in the Official Gazette.  In preparing theimport regime or amending tariffs, the UFT takes account of Turkey's commitments under
multilateral, regional and bilateral trade agreements, as well as other factors such as the interest of
Turkish citizens, and domestic industries.
8. The Ministry of Industry and Trade is responsible for the formulation and administration of
trade-related laws in the areas of technical barriers to trade, protection of intellectual, industrial andcommercial property rights (except copyright and neighbouring rights for which the Ministry of
Culture is responsible) and protection of competiti on and consumer rights.  Over the past four years,
the Ministry has prepared the following laws: the Protection of Competition Law (No. 4054 of 1994),
the Consumer Protection Law (No. 4077 of 1995), the Regulation Concerning the Type Approval of
Motor Vehicles (No. 22982 of 1997), and the Turkish Patent Institute Decree (No. 544 of 1994), aswell as formulating new intellectual property laws, which were enacted in 1995 in accordance with
EU norms (patent, utility models, trade marks, industrial designs, geographical indications and
copyrights).  It is also empowered to enforce the industrial standards set by the Turkish Standards
Institute (TSE) and is charged with overseeing quality control systems, test laboratories, instrument
metrology and calibration facilities.
9. The Undersecretariat of the State Planning Or ganization (SPO) is responsible for preparing
the five-year development plan.  The current plan covers the period 1996 to 2000.  It sets out theeconomic objectives and the priorities for the public investment programme.  The SPO also
implements incentive schemes for regional development and assists in indicative regional planning.
10. There are no formal arrangements for channelling economic and trade policy advice from
academia or the private sector to the relevant government bodies.  However, consultation is
sometimes sought from universities and research institutions, such as the Economic and DevelopmentFoundation (IKV), the Scientific and Technical Rese arch Council of Turkey (TUBITAK), the Foreign
Economic Relations Board (DEIK), the Foreign Trade Association of Turkey (TURKTRADE), and
the Export Promotion Centre (IGEME).  The private sector provides inputs to trade policy formulation
by communicating its views either directly to the UFT or through the Union of Chambers, and
Commodity Exchanges of Turkey (TOBB), the Turk ish Industrials' and Businessmen's Association
(TUSIAD), as well as individual and local chambers of commerce and exporters' associations.
(3) T
RADE RELATIONS
(i) Trade policy objectives
11. The entry into force of the customs union between Turkey and the EU on 1 January 1996,
with the final goal of accession to the EU, has been the most important factor affecting the Turkishtrading system in recent years.
2  With its far-reaching and comprehensive scope, the customs union
has given renewed impetus to the liberalization process in Turkey.  Apart from the elimination of
customs duties on goods imported from the EU, the a doption of EU CET for most imports from third
                                                     
2 Article 28 of the Ankara Agreement states that "as soon as the operation of the Agreement has
advanced far enough to justify envisaging full acceptance by Turkey of the obligations arising out of the Treaty
establishing the Community, the Contracting Parties shall examine the possibility of accession of Turkey to theCommunity".Turkey WT/TPR/S/44
Page 21
countries resulted in lowered customs duties as well as improved and more secure access for third
countries to the Turkish market for most industrial pr oducts.  Turkey is also progressively aligning its
tariffs with the preferential customs regime of the EU.  In addition to frontier measures, the agreement
includes important provisions on the prevention of unfair competition, payments, state monopolies,
intellectual property, public procurement, state aids, structural adjustment and institutional
arrangements.
12. The engagements Turkey has undertaken towards the EU are much more comprehensive than
the engagements with the WTO.  Hence, as th ese commitments are parallel to its commitments
vis-à-vis  the WTO, these measures should facilitate and accelerate Turkey's implementation of the
WTO provisions.3
13. Notwithstanding the important liberalization m easures undertaken within the framework of
the CUD and the associated positive economic impact, it is unclear to what extent bilateral trade
expansion will come at the expense of trade between Turkey and non-EU members (trade diversion),
but the magnitude of the MFN liberalization and other measures suggests that the overall thrust will
also be beneficial to third countries.  However, increased concentration on the EU market will
increase Turkey's dependence on EU economic booms and vulnerability to its recessions.  As noted inChapter I, about half of Turkey's exports were destined to EU members in 1997, while more than half
of Turkey's foreign direct invest ment inflows came from EU members.
(ii) Turkey and the WTO
14. Turkey was an active member of the GATT and became a founding member of the WTO
on 26 March 1995.
4  Although the WTO Agreements have the force of law, Turkey is committed to
amending its legislation to bring it into conform ity with the results of the Uruguay Round.  To this
aim, Turkey has already amended legislation in the areas of intellectual property, and safeguards,while legislation on anti-dumping and countervailing measures was expected to be amended in second
half of 1998.
15. As a result of the Uruguay Round, the share of bound tariff lines increased from 31% to 46%,
with all agricultural lines bound (Chapter III (2)(f)).   However, applied rates are generally well below
bound rates:  simple average MFN tariff of 13% in 1998 compared with 36% bound rate of duty, anda further reduction to 30% by year 2005.  In principle, this would provide Turkey with freedom to
unilaterally increase its import tariffs, but the customs union with the EU puts an effective constraint
on any such action.  In the area of agriculture, Turkey has committed to reduce budgetary outlays for
export subsidies by 24%, and subsidies volumes by 14% between 1995 and 2004, in equal
instalments.
16. Turkey has also made extensive commitments under the General Agreement on Trade in
Services (GATS); its schedule covers 72 activities out of a total of 161 in nine sectors.
5  I t  a l s o
became a party to the Interim Agreement on Financial Services in 1995, the 1997 Information
Technology Agreement (ITA), the 1997 Agreement on Telecommunication Services, and
the 1997 Agreement on Financial Services.  Table AIV.4 contains a summary of Turkey's specificcommitments in the services sector, excluding the 1997 Financial Services Agreement (which will
enter into force on 1 March 1999).  In the context of the ITA, by 2000 duty-free treatment will apply
                                                     
3 Statement by the Turkish Minister of State for Foreign Trade at the WTO Ministerial Conference in
Singapore, December 1996.
4 The full text of the Agreement establishing the WTO was published in the Official Gazette No. 22213
dated 25 February 1995 (WTO document G/TBT/2/Add.33, 18 June 1997).
5 GATT (1994a).WT/TPR/S/44 Trade Policy Review
Page 22
to 358 tariff lines at the HS eight-digit level in the area of computers, telecommunications equipment,
semiconductors, semiconductors manufacturing equipment, software, and scientific instruments.
17. Turkey has not signed any of the plurilateral WTO Agreements, but participates as an
observer in the Committees on Government Procurement and Trade in Civil Aircraft.6
18. Turkey has fulfilled most of its WTO notification obligations, but in June 1998 had yet to
complete such notifications, including in respect of the non-existence of measures, in the areas ofGATS, SPS, and SCM.  A survey of the status of se lected notifications made by Turkey is contained
in Table II.2, which provides a brief description of the notification obligations and periodicity.
19. At the time of completion of this report (July 1998), Turkey's trading partners had requested
four consultations regarding Turkey's trade measures.  One dispute, concerning the imposition of tax
on box-office receipts of foreign film revenues, has been concluded;  of three other cases, all of whichinvolve quantitative restrictions on imports of textile and clothing products, one has led to the
establishment of a panel (Table II.3);  in the other two cases, complainants participated in the panel
procedure as interested third parties.  Turkey has had an interest in two disputes as a third party;
panel reports were adopted on the United States "Measures affecting the importation, internal sale and
use of tobacco" and on the United States "Measures affecting imports of woven wool shirts andblouses".  Turkey is not engaged in any trade dispute outside the WTO framework.
20. During the WTO Ministerial Conference in Geneva in May 1998, Turkey reiterated its
support for the WTO and the liberal international trading system based on the principles of free
competition, non-discrimination and elimination of trade barriers.  It stressed the need for due
consideration of the special needs and development requirements of the developing and the least-
developed countries. Turkey expressed satisfaction regarding attainments reached within the
framework of the ITA, the Agreement on Financial Services, the Agreement on TelecommunicationsServices, and the Working Groups on Trade and Co mpetition as well as on Trade and Investment.
The importance attached to the full implementati on of the TRIPS Agreement and the need for the
initiation of negotiations under Article 24 aimed at increasing the protection of individual
geographical indications were emphasized.
7
                                                     
6 The Agreements on Bovine Meat and International Dairy ceased to exist on 31 December 1997.
Turkey had not signed any of these agreements.
7 Statement by the Turkish Minister of State at the WTO Ministerial Conference in Geneva, May 1998.Turkey WT/TPR/S/44
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Table II.2
Status of selected notification requirement to the WTO, June 1998
WTO AgreementArea of notification
requirement Periodicity WTO document aComment
Agreement on Agriculture
(Articles 10 and
18.2; ES:1+)Export subsidies Annual, 90 days after
end of calendar yearG/AG/N/TUR/5/Rev.1,
Oct. 1997
(Article 18.2;DS:1+)Domestic support Annual, 90 days after
end of calendar yearG/AG/N/TUR/6,
Apr. 1998
(Article 18.2) Green box measures Annual, 90 days after
end of calendar yearTurkey has not notified any
measures.
Anti-dumping   (Agreement on Implementation of Article VI of GATT 1994)
(Article 16.4) Anti-dumping actions Twice annually G/ADP/N/35/TUR,
Feb. 1998
(Article 16.5) Competent authorities Once G/ADP/N/14/Add.6,
Mar. 1998
(Article 18.5) Laws and regulations March 1995, then
changesG/ADP/N/1/TUR/2,
Dec. 1995
Customs Valuation  (Agreement on Implementation of Article VII of  GATT 1994)
(Article 22.2) Laws and regulations Once, then changes G/VAL/N/1/TUR/1,
Oct. 1995
General Agreement on Trade in Services   (GATS)
(Article III:3) Notification of significant
changes over the past year
in the rules governingscheduled sectors.Annual Not received
(Article III:4
or IV:2)Contact/enquiry points Once S/ENQ/23, Sep. 1996
(Article VII:4) Recognition measures Within 12 months of
WTO AgreementNot received
General Agreement on Tariffs and Trade  (GATT) 1994
(Article XXVIII:5) Reservation of right to
modify schedule and
concessionsAd hoc G/MA/13, Nov. 1996 .
Agreement on Import Licensing Procedures
(Articles 1.4(a) and
8.2(b))Laws and regulations Once, then changes G/LIC/N/1/TUR/1,
Aug. 1996 and
G/LIC/N/1/TUR/2/Rev.1,Jun. 1998
(Article 7.3) Replies to questionnaire on
proceduresAnnual G/LIC/N/3/TUR/2,
May 1998
Agreement on Preshipment Inspection
(Article 5) Laws and regulations Once, then changes Not received
Quantitative Restrictions  (Decisions on Notification Procedures for Quantitative Restrictions)
(Decision of theCouncil for Trade inGoods (G/L/59))Non-tariff measures Every two years,
beginning Jan. 1996G/MA/NTM/QR/1,
Feb. 1996
Agreement on Rules of Origin
(Article 5.1 and
Annex II(4))Preferential rules of origin Within 90 days of
WTO AgreementG/RO/N/8, Jan. 1996
Agreement on Safeguards
(Article 12.6)  Laws and regulations Once, then changes G/SG/N/1/TUR/2/Rev.1/
Corr.1, Aug. 1997
Table II.2 (cont'd)WT/TPR/S/44 Trade Policy Review
Page 24
WTO AgreementArea of notification
requirement Periodicity WTO document aComment
(Article 12.7) Pre-existing Article XIX
measuresMarch 1995, then
changesNo notification because no
pre-existing Article XIX
measures.Turkey does not maintain any
safeguard measures relating to
this article.
Sanitary and Phytosanitary Measures  (Agreement on the Application of)
(Article 7, Annex B) Enquiry point and
notification authorityAd hoc G/SPS/ENQ/6, Oct. 1997 Turkey has not notified any
measures.
State Trading   (Understanding of the Interpretation of Article XVII of GATT 1994)
(Article XVII:4(a)) State-trading activities Annual G/STR/N/3/TUR, Aug. 1997
Agreement on Subsidies and Countervailing Measures
(Article 25.1 –
GATT 1994
Article XVI:1)Specific subsidies Annual G/SCM/N/3/TUR/Corr.2,
Dec. 1995
(Article 25.11) Countervailing measures Twice annually G/SCM/N/35/Add.6,
Mar 1998
(Article 25.12) Competent authority G/SCM/N/18/Add.6,
Mar. 1998
(Article 32.6) Laws and regulations Once by 15 March
1995, then changesG/SCM/N/1/TUR/2,
Dec. 1995
Agreement on Technical Barriers to Trade
(Article 2) Technical regulations Ad hoc G/TBT/Notif. 98.274,
Jun. 1998
(Articles 10.1and 10.3)Enquiry point Once, then changes G/TBT/ENQ/11, Apr. 1998
(Article 15.2)  Laws and regulations Once, then changes T/TBT/2/Add.33, Jun. 1997
(Annex 3(c)) Acceptance of Code Once, then changes G/TBT/CS/N/35, Mar. 1996
 Agreement on Textile and Clothing
(Article 2.7) First integration Once G/TMB/N/44, Apr. 1995
(Article 2.11) Second integration Once G/TMB/N/228/Corr.1,
Apr. 1997, and
G/TMB/N/228/Add.2,
Aug. 1997
(Article 6.1) Transitional safeguards Once before
1 March 1995G/TMB/N/18, Feb. 1995 Turkey retains the right to use
the safeguard provision of
Article 6.
Agreement on Trade-Related Aspect of Intellectual Property Rights (TRIPs)
(Article 63.2 anddecisions of the
TRIPS Council of
21 Nov. 1995)Laws and regulations Within 30 days of
WTO AgreementIP/N/1/TUR/1, May 1995
and IP/N/1/TUR/1/Add.1,
May 1997
(Article 69) Contact points 1 Jan. 1996 IP/N/2/REV.2/ADD.2,
Jan. 1997
Agreement on Trade-Related Investment Measures (TRIMs)
(Article 5.1) TRIMS inconsistent with
the Agreement.Within 90 days of
WTO AgreementTurkey has not notified any
measures.
(Article 6.2) Publications in which
TRIMs may be foundOnce G/TRIMS/N/2/REV.1,
Jul. 1997
Plurilateral Trade Agreements Turkey is not a party to theAgreements on Trade in Civil
Aircraft and on GovernmentProcurement.
a The table refers to the latest notification made under each Agreement.
Source: WTO documents.Turkey WT/TPR/S/44
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Table II.3
Cases involving Turkey under WTO dispute settlement provision, July 1998
Dispute Raised by/against Actions Outcome
Restrictions on imports of
textile and clothing
productsHong Kong/Turkey Consultation requested under GATT Articles XI,
XIII and XXIV as well as WTO ATC Article 2 on
12 February 1996 (WT/DS29/1).Pending consultation
Restrictions on imports of
textile and clothing
productsIndia/Turkey Consultation requested under GATT Articles XI
and XIII as well as WTO ATC Article 2 on 21
March 1996 (WT/DS34/1). Establishment of panel
requested on 2 February 1998 (WT/DS34/2).  DSBagreed to establish a panel on 13 March 1998
(WT/DSB/M/43).Active panel
Restrictions on imports of
textile and clothing
productsThailand/Turkey Consultation requested under GATT Articles I, II,
XI and XIII as well as WTO ATC Article 2 on 20
June 1996 (WT/DS47/1).Pending consultation
Taxation of foreign film
revenuesUnited States/Turkey Consultation requested under GATT Article III on
12 June 1996 (WT/DS43).  Establishment of panel
requested on 9 January 1997 (WT/DS/M28).  DSB
agreed to establish a panel on 25 February 1997(WT/DS/M/29).Notification of mutually
agreed solution on
14 July 1997
(WT/DS43/3/G/L/77).
Note: Reference to WTO document is made within parenthesis.
Source: WTO Secretariat.
(iii) Plurilateral agreements
(a) Customs union with the European Union
21. Covering TRIPS, competition policies, commercial policies, customs provisions and technical
barriers to trade, the customs union between Turkey and the EU goes far beyond a basic customs
union with free internal trade and a CET, and has given a new impetus to the liberalization process in
Turkey.  A process of bilateral trade liberalization, initiated in 1963, preceded the CUD (Box II.1).
22. The CUD, covering a broad range of areas, requires Turkey to implement the measures listed
below (Turkey has already adopted a wide range of EU trade and trade-related legislation
(Table AII.1)) 8:
- elimination of customs duties and charges havi ng equivalent effect in mutual trade in
industrial goods, by 1 January 1996;  phase-out of duties and charges on the
remaining 142 coal and steel products (HS twelve-digit level) (covered by the
European Coal and Steel Community (ECSC)) by 1 January 1999;  and phase-out of
the duties on the industrial component of processed agricultural goods and adjustment
of duties on the agricultural component, by 1 January 1999;
- adoption of the CET against third country imports of industrial goods and the
industrial component of processed agricultural goods, by 1 January 1996 (except for a
few items listed in the annex of the Association Council's Decision 1/95)9, and
                                                     
8 WTO document WT/REG22/1, 13 February 1996;  and Togan (1997a).
9 Turkey will maintain rates of protection above those specified in the CET for certain "sensitive"
products equivalent to 290 items at the twelve-digit level for up to five years (passenger cars with enginessmaller than 2,000 cm
3, bicycles, leather cases and bags, footwear and their parts, furniture, chinaware and
ceramic ware, iron and steel wires and ropes not electrically insulated, and paper or paperboard sacks and bagsfor cement fertilizers).WT/TPR/S/44 Trade Policy Review
Page 26
adoption of all of the preferential agreements concluded by the EU with third
countries, by 1 January 2001;
- elimination of quantitative restrictions or measures having equivalent effect in trade
of industrial goods with EU, by 1 January 1996;
- approximation and implementation of the EU commercial policy (including external
textiles) regulations, by 1 January 1996, including, inter alia , common rules for
imports, procedures for administrating quantitative quotas, and for officially
supported export credits;
- adoption of EU customs provisions, by 1 January 1996, in the fields of origin of
goods;  customs value of goods;  introduction of goods into the territory of the
customs union;  customs declaration;  the release of goods for free circulation;suspensive arrangements and customs procedures with economic impact;  movement
of goods;  customs debt;  and rights of appeal;
- adoption of EU competition rules, by 1 January 1996.
- incorporation into its legislation of the EU instrument relating to the removal of
technical barriers to trade, by 1 January 2001;
- ensurance of adequate and effective protection and enforcement of intellectual,
industrial, and commercial property rights; adoption of most measures immediately,
and on 1 January 1999 adopt patentability of pharmaceuticals, utilizing a transition
period ending on 31 December 1999 under the Agreement on Trade-Related Aspect
of Intellectual Property Rights (TRIPS);
23. Turkey has not only eliminated its tariffs and levies on imports of manufacturing products
originating in the EU, but now also applies the EU  CET on imports from third countries, involving a
substantial reduction of tariffs on most imports.  This latter effect is because the simple average MFN
tariff of the EU is only about 10% (1997), and Turkey will provide preferential access to its markets
to all countries to which the EU grants preferential access.10  Moreover, since preferential access
agreements typically are negotiated reciprocally, Turkish exporters can expect improved access to
countries to which EU grants preferential access.
24. The scope of the CUD, however, excludes Turkey from some of the crucial aspects of the
common market: the common agricultural policy (CAP), including the freedom of movement of
agricultural products; the free movement of labour and capital; and moves towards a single currency.
Unlike countries in the European Economic Area (EEA ), Turkey may also be subject to anti-dumping
measures by the EU.  The financial support original ly envisaged from the EU to Turkey has not yet
been made available.11  As a result, as noted by the authorities, the relationship between the two
parties was seriously affected.
                                                     
10 Reflecting the tariffication of previous variable levies and import restrictions under the WTO
Agreement, agricultural tariffs show considerably higher averages: the simple average for industrial productswas 4.9% in 1997, while 20.8% for agricultural products (WTO, 1997).
11 Europe Information Service (1998).Turkey WT/TPR/S/44
Page 27
Box II.1:  Steps leading up to customs union with the EU
Turkey's application for the association with the European Economic Community (EEC) was made in 1959.
The application ultimately resulted in a signing of th e Association Agreement in 1963 (Ankara Agreement),
which entered into force on 1 December 1964.  The agreement provided for the association to be
implemented in three phases: a preparatory stage, a transitional stage and a final stage.  During the
preparatory stage (1964-1973) the EEC granted unilateral concessions to Turkey in the form of agricultural
tariff quotas and financial assistance.  In the meantime, Turkey did not have to undertake trade
liberalization.
In 1967 Turkey lodged its application for negotiations on entering the transitional stage.  The Additional
Protocol to the Ankara Agreement was signed in 1970, and became effective on 1 January 1973.  The basic
aim of the Additional Protocol was to establish the cu stoms union (CU) with the EU.  The following trade
preferences were extended:
- since 1971 industrial products of Turkish origin have been exempted from customs duties and
charges having equivalent effect in the Communities.   For exports of textiles and clothing to the
Communities, the EU undertook to phase out duties,  and, for some products, to establish tariff
quotas, over a 12-year period.  The EU also abolished all quantitative restrictions on such
products, with some exceptions. The provisions on the CU contained in the Additional Protocol
do not apply to agricultural products.  Turkey's exports of agricultural products, which in the
EU, are governed by the common agricultural policy, were exempt from EU import duties from
1 January 1987 but not from variable levies.  For certain products the customs duty exemption
was accompanied by quantitative restrictions, se asonal quotas, or a re quirement to observe
reference prices, minimum import prices and voluntary export restrictions;
- tariffs on products originating in the EU were calculated as successive percentage reductions of
the duties prevailing on 23 November 1970 (date of signature of the Additional Protocol).
In 1993, for example, duties were equivalent to 20% or 30% of these basic duties.
The final stage:  In 1995, it was agreed at the Association Council meeting to create a CU between Turkey
and the EU starting on 1 January 1996.
25. The trade liberalization taking place within the framework of the CUD is expected to have a
significant economic impact.  A study by Harrison et al. (1996), estimates the gain to be in the range
of 1.0 to 1.5% of GDP per year with the largest gains coming from improved access to third countries.
The actual benefits are likely, however, to be higher, as a result of dynamic effects stemming from,
inter alia , improved resource allocation.  The study also points out that the CUD poses several
challenges to the Turkish economy (Chapter I).  One of these is the revenue losses as a result of lower
duties; estimated at about 1.4% of GDP per year.
26. The long-standing trade preferences between Tu rkey and the EU have resulted in EU being
not only the most important market for Turkey ( 47% of Turkey's merchandise exports in 1997), but
also one of the main sources of imported goods (51% of Turkey's merchandise imports in 1997)(Chart II.2 and Tables AI.6 and AI.7).  Some 97%  of Turkey's merchandise imports from the EU
in 1996, and 85% of its exports were covered by the customs union.
(b) Free trade agreement with the EFTA
27. On 10 December 1991 Turkey signed a free-trade agreement with countries of the European
Free Trade Association (EFTA), which entered into force on 1 April 1992.
12  The agreement covers
industrial products, fish and processed agricultural products (within HS chapters 25 to 97) with the
                                                     
12 EFTA is comprised of Iceland, Liechtenstein, Norway and Switzerland.WT/TPR/S/44 Trade Policy Review
Page 28
exception of nine agriculture-based tariff items at the HS six-digit level including mannitol, sorbitol,
casein, and egg and milk albumin and three items at the HS four-digit level including natural cork,
flax and true hemp.   The agreement also covers rules on intellectual property, competition, state aid
and dumping.
28. The agreement is based on an asymmetrical model similar to Turkey's agreement with the EU.
Since 1 January 1993, Turkey has granted imports from EFTA countries the same customs dutytreatment as imports from the EU, except for fish and fishery products.  Thus, in the period up to the
end of 1995, Turkey gradually abolished all customs duties and charges having equivalent effect on
industrial products from the EFTA countries.  Trade in processed agricultural goods follows the same
system as between Turkey and the EU, i.e. th at the Mass Housing Fund (MHF) levy on agricultural
components of processed agricultural goods is to be reduced by 1 January 1999 to achieve "targetagricultural components".
29. On 1 April 1992, EFTA countries abolished all customs duties on imports and any charges
having equivalent effect on products from Turkey, except on textiles and apparel goods.  For textiles
and apparel products, tariffs were eliminated on 1 January 1996.
30. Trade between Turkey and the EFTA members countries is shown in Chart II.2.  Some 99%
of Turkey's merchandise imports from EFTA in 1996 and 77% of its exports were covered by the
free-trade agreement.
(c) Economic Co-operation Organization (ECO)
31. Turkey is a signatory to the Economic Co-operation Organization (ECO), together with
Pakistan and Iran.  While ECO members expanded in 1992 to include ten countries, tariff preferences
are granted only on trade between the founding member countries.
13  In accordance with the
Additional Protocol on Preferential Tariff and its A nnex II a 10% tariff reduction of the statutory rates
was granted on 37 items at the HS four-digit line, including, inter alia , certain marble,
pharmaceuticals, detergents, leather products, paper and paperboards, canvas, centrifugal pumps for
liquids, compressors, henna and bentonite (Chapter III(2)(i)).  However, tariff preferences within
ECO ceased on January 1996 as the preferential rates were higher than MFN rates.  The Government
is reviewing the possibility of extending a preferential reduction of 10% below the MFN rates withinthe framework of ECO.  The ultimate objective of the agreement is to liberalize trade among the
member States, but no timetable has yet been agreed upon.  Trade between the ECO signatory
members countries is shown in Chart II.2.
                                                     
13 ECO member countries are Afganistan, Azerbaijan, Islamic Republic of Iran, Kazakhstan, Kyrgyz
Republic, Pakistan, Tajikistan, Turkey, Turkmenistan and Uzbekistan.Turkey WT/TPR/S/44
Page 29
2530354045505560
1980 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 199705101520
2530354045505560
1980 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 199705101520Chart II.2 
Turkey's trade with free-trade agreement partners, 1980-97
(a)  Exports to free-trade agreement partners
Per cent of Turkey's total merchandise exports
(b) Imports from free-trade agreement partners
Per cent of Turkey's total merchandise imports
Austria, Finland, Sweden and unified Germany are included in the EU(15) for the whole period.   
UNSD , Comtrade database (SITC Rev.1 ).Note:
Source :     Left hand scale:                          Right hand scale:
                    EU(15)                                                EFTA                               ECO (Pakistan and Iran)WT/TPR/S/44 Trade Policy Review
Page 30
(d) Black Sea Economic Co-operation (BSEC)
32. The Declaration on Black Sea Economic Co-operation (BSEC), signed on 25 June 1992, has
sought to expand economic cooperation between its eleven members.14  Although the BSEC provides
for multilateral cooperation in various fields it does not as yet provide for preferential tariff
concessions; the areas of cooperation range from banking and finance to the exchange of statistical
data and economic information in areas such as energy, transport, telecommunications, trade andindustry, agriculture and agro-industry, environmental protection, tourism, and science and
technology.
15  In time, the BSEC may become a forum for the elaboration of approaches to the
development of trade relations.  On 7 February 1997, a declaration of intent for the establishment of a
BSEC free-trade area was adopted.  The declaration envisages the examination of the ways and means
for the progressive establishment of such an area, taking into account each country's existing and
future links with the EU.  Recently, the Heads of State or Government of the participating States of
the BSEC agreement assessed the progress of the agreement and signed the Charter of the BSEC
organization.  This act transforms the existing in ter-governmental mechanism into a fully-fledged
regional economic organization.
(e) Generalized System of Preferences (GSP)33. As noted earlier, Turkey will, as part of the CUD with the EU, adopt all of the preferential
agreements the EU has concluded with third countries, by 1 January 2001.  This includes, inter alia ,
the application of EU preferences under the GSP, which Turkey has not yet adopted.
34. Turkish exports receive preferential treatment under the GSP schemes of Australia, Canada,
Japan, New Zealand, Russia and the United States.  The preference extended by Russia is 75% of
MFN rates on all products except those on a negative list, while the United States extends duty-free
treatment on 744 products.
(f) Global System of Trade Preferences (GSTP)
35. Turkey is not a member of the Global System of Trade Preferences scheme.
(iv) Bilateral agreements
36. Turkey has signed bilateral free-trade agreements with ten countries (Table II.4).  These
bilateral free-trade agreements, which have similar features to the customs union agreement betweenthe EU and Turkey, were concluded as a result of Turkey's obligations to the CUD.  Negotiations with
Poland are in progress.  Free-trade agreements are being discussed with Tunisia, Egypt, Morocco and
Palestine.
                                                     
14 The BSEC member countries are: Albania, Armenia, Azerbaijan, Bulgaria, Georgia, Greece,
Moldavia, Romania, Russian Federation, Turkey and Ukraine.
15 The Republic of Turkey's web-site (www.turkey.org/turkey/keid.htm).Turkey WT/TPR/S/44
Page 31
Table II.4
Turkey's bilateral trade agreements, 1998
CountryDate of
agreementEntry into
forceMajor Turkish exports and imports
covered by the agreementa
Other areas of co-operation
Israel 14/3/1996 1/5/1997 Phased reduction of tariffs on industrial
goods; complete elimination on
industrial goods by 2000
Hungary 8/1/1997 1/4/1998 Phased reduction of tariffs on industrial
goods; complete elimination onindustrial goods by 2001
Romania 29/4/1997 1/2/1998 Phased reduction of tariffs on industrial
goods; complete elimination onindustrial goods by 2002All agreements include provisions on right
of establishment and supply of services,
internal taxation, structural adjustment,dumping, state monopolies, rules of origin,
payments, rules of competition, sate aid,
balance-of-payments difficulties, protectionof intellectual property, and government
procurement.
Czech Republic 3/10/1997 Phased reduction of tariffs on industrial
goods, complete elimination onindustrial goods by 2001
Slovak Republic 20/10/1997 Phased reduction of tariffs on industrial
goods;  complete elimination onindustrial goods by 2001
Lithuania 2/6/1997 1/3/1998 Phased reduction of tariffs on industrial
goods;  complete elimination onindustrial goods by 2001
Estonia 3/6/1997 Tariffs on industrial goods will be
abolished by the entry into force of theAgreement
Latvia 16/6/1998 Tariffs on industrial goods will be
abolished by the entry into force of theAgreement (reduction of tariffs on
limited number of textile products by
2000)
Slovenia 5/5/1998 Phased reduction of tariffs on industrial
goods;  complete elimination on
industrial goods by 2001
Bulgaria 11/7/1998 Phased reduction on industrial goods;
complete elimination on industrial
goods by 2002
a See Table III.7 for details on the coverage and the preferential margin.
Source: Government of Turkey.
(4) FOREIGN DIRECT INVESTMENT POLICY16
(i) The legislative framework
37. Since the previous Trade Policy Review, Turkish legislation governing foreign investment
has been revised, and a new law has been put into effect.17  The already liberal foreign investment
policies were simplified and bureaucratic formalities were streamlined.  The screening and approval
process seems to be routine and non-discriminatory, which does not impede investment or limitcompetition.
18  However, the number of sectors subject to foreign direct investment restrictions are the
                                                     
16 Recent trends in foreign investment flows, by country and sector, are provided in Chapter I.
17 Law No. 6224 of 18 January 1954 Concerning the Encouragement of Foreign Capital has been
revised twice (July and August 1995) and Decr ee No. 92/2789 of 4 March 1992 was replaced by
Decree No. 95/6990 of 7 June 1995.  A new regulation was put into effect in 1995 - Communiqué No. 95/2of 24 August 1995 Concerning Foreign Capital - laying out principles concerning the application for permitsand implementation.
18 USTR (1997).WT/TPR/S/44 Trade Policy Review
Page 32
same as at the time of the previous Review.  The continued imbalances at the macroeconomic level,
along with frequent changes in government, are likely to have restrained foreign investment.
38. Foreign direct investment in Turkey requires permission from the General Directorate of
Foreign Investment (GDFI), Undersecretariat of the Treasury.  The GDFI acts as a "one-stop shop"
for promoting foreign direct investment, issuing permission, registration, granting incentives to
investors, and cancelling permission certificates and registration.  Since 1995, responsibility for theorganization and coordination of investments under BOT (build, operate and transfer) and
BOO (build, operate and own) models has been added to the functions of the GDFI.
19  Other changes
to the legislation on foreign direct investment include, inter alia :  (i) all foreign investments are now
evaluated by the GDFI, whereas previously the approval of the Council of Ministers was required for
investments in which foreign share capital exceeded US$150 million;  (ii) a capital increase ofexisting establishments with foreign capital in  Turkey can be realized without permission if
participation ratios of foreign partners do not change;  previously, this required the permission of the
Undersecretary;  (iii) real and legal persons resident abroad can buy or sell the shares of existing
companies in Turkey in accordance with the princi pals defined by the Undersecretary; previously, the
Undersecretariat of Treasury determined the value of the shares;  and (iv) foreign exchange broughtfrom abroad for the purpose of establishing corporations, increasing capital or buying the shares of
existing Turkish companies can now be blocked in a Foreign Exchange Deposits Account, whereas
before it was necessary to convert foreign exchange to local currency.
39. Almost all sectors of the economy open to private domestic investors are also open to foreign
participation (Table II.5).  The equity participation ratio of foreign shareholders is restricted to 20% in
broadcasting and, subject to certain conditions, 49% in aviation, maritime transportation, ports,
fish-processing and value-added telecommunications services.  Foreign investors are not allowed toengage in retail trade (except hypermarkets) and real-estate trading, while establishments in the
financial, petroleum and mining sectors require special permission.  In other sectors where domestic
private investment is permitted, 100% foreign participation is allowed.  To establish corporations,
foreign investors must bring at least US$50,000 of capital per person to become partners in existing
companies and to open branch offices in the Turkish private sector.
40. Where foreign investment is permitted, Article 10 of Law No. 6224 allows for national
"equal" treatment for domestic and foreign investors.  Investment incentives, such as tariff duty
exemptions, investment allowances and subsidized credits, are equally available to foreign and
domestic investors (Chapter III(3)(xii) and (4)(ii)).  There are no special incentives available only to
foreign investors.  In recent years, the Government  has been encouraging foreign as well as domestic
investor participation using BOT or BOO schemes.  The schemes have been used in the construction
and operation of airports, energy, ports, and bridges.
41. Outward foreign direct investment in excess of US$5 million requires permission by the
Ministry of Finance.
                                                     
19 A private investor is granted the right and the obligation to provide an infrastructure service under
terms and conditions specified in a contract.  The investor takes over operational responsibility and at least partof the commercial risk.Turkey WT/TPR/S/44
Page 33
Table II.5
Sectors subject to foreign direct investment restrictions, 1998
Sectors where foreign investment is
restrictedLegal source
A. Up to 20% equity participation:
    Broadcasting Establishment and Broadcasting of Radio and Television Law No. 3984
B. Up to 49% equity participation:
    Aviation aCivil Aviation Law No. 2920
    Maritime transportation bCabotage Act No. 815, Turkish Commercial Code No. 6762
    Port services cCabotage Act No. 815, Turkish Commercial Code No. 6762, Privatization Law No. 4046
    Fish-processing dFishing Law No. 1380, Bylaw on Fishing Products No. 6710, Turkish Commercial Code
No. 6762
    Value-added telecommunications
     services ePrivatization Law No. 4000
C. Special permission:
    Financial sector fBanks Act No. 3182, Capital Market Law No. 2499 amended by Law No. 3794 and the
relevant Communiqués, Financial Leasing Law No. 3226, Law No. 3568 on
Accountancy, Financial Advisory and Certified Financial Advisory dated 1989,
Insurance Supervision Law No. 7397 and amended by Statutory Decree No. 539 of 1994.
     Petroleum gPetroleum Law No. 6326
     Mining hMining Law No. 3213
D. Sectors closed to foreign investors:
     Retail trade (except hypermarkets) Administrative practices of the Undersecretariat of Treasury
     Real-estate trading iVillage Law No. 442, Tourism Incentive Law No. 2634, Administrative practices of theUndersecretariat of Treasury
     Fishing dFishing Law No. 1380, Bylaw on Fishing Products No. 6710, Turkish Commercial Code
No. 6762
a Licences to operate airlines are only granted to locally incorporated companies whose management is under the control of
Turkish citizens and majority of voting shares are owned by Turkish citizens.  Airlines, of which majority of shares arecontrolled by foreigners, are not permitted to carry passengers from one national airport to another.
b Cabotage is reserved to national flag carriers.  Registration of commercial ships is granted only to locally incorporated comp anies
whose management is under the control of Turkish citizens, and majority of voting shares are owned by Turkish citizens.
c Only Turkish citizens, and companies that are majority owned by Turkish citizens, which are managed and represented by
Turkish citizens with a majority, and majority voting is held by Turkish citizens, may exercise the rights related to the ports .
d Foreign-owned enterprises may engage in fish processing, bur cannot obtain a fishing licence.  Fishing vessels may not registe r in
Turkey unless owned by Turkish nationals or by companies of which majority of voting shares are owned by Turkish citizens.
e The following value-added services have been opened up:  mobile telephone, pager, packet-switched data transmission,
circuit-switched data transmission, facsimile services, data networks, intelligent network, cable televisions, coin-operated
telephone, satellite systems, similar value-added services and direct printing services.
f Banks may only be established as joint-stock companies.  Establishment of a bank or opening the first branch of a foreign bank  in
Turkey requires the approval from the Council of Ministers.  Only intermediary institutions established in Turkey can perform
securities activities.  Mutual funds may be founded only by authorized banks, insurance companies, intermediary institutions an d
pension funds established in Turkey.  The majority of the members of the board of directors of an investment company must beTurkish nationals.  Portfolio management and advisory services in securities may be performed only by intermediary institutions
established in Turkey.  Also, portfolio management services can be performed by portfolio management companies established
in Turkey.   In order to perform financial advisory services, foreign partners have to be citizens of countries which have offi cially
codified the principles of the profession of financial advisory, and authorization by the Prime Minister is required.  In insur ance,
foreign commercial presence or presence of foreign natural persons regarding services auxiliary to insurance is permitted only for
consultancy and risk-management services.  Foreign investment in banking by opening a branch may be subject to a reciprocityrequirement.  Performance of financial advisory services by non-residents requires a reciprocity condition.
g Foreign enterprises may invest in marketing and sales activities without restriction.  They may invest in exploration and
exploration activities provided they are not controlled or owned by a foreign State (this restriction may be lifted by the Coun cil of
Ministers).  Petroleum related activities can be carried our through locally incorporated stock companies or Turkish branches o f
stock companies incorporated abroad.  For investment in refining, transportation through pipelines and storage, approval by the
Council of Ministers is required.
h Foreign nationals and companies may invest only through locally incorporated companies.
i Foreign acquisition of real estate outside of municipal boundaries is restricted; the restriction can be lifted by the Council  of
Ministers for the creation of tourism centres.
Source: Government of Turkey.WT/TPR/S/44 Trade Policy Review
Page 34
(ii) International investment agreements
42. By June 1998, Turkey had signed 53 bilateral agreements for the promotion and protection of
foreign direct investment20, of which 26 have been signed since 1993.
43. Turkey has been a member of the International Centre for Settlement of Investment Disputes
and the Multilateral Investment Guarantee Agency since 1987.  Turkey has also actively participated
in the OECD's negations on a multilateral agreement on investment (MAI).  Since Turkey's foreigndirect investment regime is already liberal being party to a prospective MAI would simply create a
new formal, comprehensive regime rather than regimes the adoption of new liberalizing measures.
                                                     
20 Albania, Algeria, Argentina, Austria, Azerbaijan, Bangladesh, Belarus, Bosnia-Herzegovina,
Belgium, Bulgaria, China, Croatia, Cuba, the Czech Re public, Denmark, Egypt, Estonia, Finland, Georgia,
Germany, Holland, Hungary, Indonesia, Iran, Israel, Italy, Japan, Jordan, Kazakhstan, Kuwait, Kyrgyzstan,Latvia, Lithuania, Macedonia, Malaysia, Moldova, Morocco, Nigeria, Pakistan, Poland, Republic of Korea,Romania, Russian Federation, Spain, Sweden, Switzerland, Tajikistan, Tunisia, Turkmenistan, Ukraine, theUnited Kingdom, the United States and Uzbekistan.