Title
FREE TRADE AGREEMENT BETWEEN THE EFTA STATES AND THE REPUBLIC OF TURKEY
Preamble
PREAMBLE
Iceland, the Principality of Liechtenstein, the Kingdom of Norway and the Swiss Confederation, on the one hand (EFTA States), and the Republic of Turkey, on the other hand (Turkey), hereinafter each individually referred to as a "Party" or collectively as the "Parties",
RECOGNISING the common wish to strengthen the links between the EFTA States and Turkey by establishing close and lasting relations;
REAFFIRMING their commitment to democracy, the rule of law, human rights and fundamental freedoms in accordance with international law, including the United Nations (UN) Charter and the Universal Declaration of Human Rights;
REAFFIRMING their commitment to pursue the objective of sustainable development and recognising the importance of coherence and mutual supportiveness of trade, environment and labour policies in this respect;
RECALLING their rights and obligations under multilateral environmental agreements to which they are party, and the respect for the fundamental principles and rights at work, including the principles set out in the relevant International Labour Organisation (ILO) Conventions to which they are party;
AIMING to raise living standards and ensure high levels of protection of health and safety and of the environment, promote economic growth and stability, create new employment opportunities and improve the general welfare and, to this end, reaffirming their commitment to promoting trade liberalisation;
DESIRING to create favourable conditions for the development and diversification of trade between the Parties and for the promotion of commercial and economic cooperation in areas of common interest on the basis of equality, mutual benefit, non- discrimination and international law;
RECOGNISING the importance of trade facilitation in promoting efficient and transparent procedures to reduce costs and to ensure predictability for the trading communities of the Parties;
DETERMINED to promote and further strengthen the multilateral trading system, building on their respective rights and obligations under the Marrakesh Agreement establishing the World Trade Organization (WTO Agreement) and the other agreements negotiated thereunder, thereby contributing to the harmonious development and expansion of world trade;
DETERMINED to implement this Agreement in line with the objectives to preserve and protect the environment through sound environmental management and to promote
an optimal use of the world's resources in accordance with the objective of sustainable development;
AFFIRMING their commitment to prevent and combat corruption in international trade and investment and to promote the principles of transparency and good public governance;
ACKNOWLEDGING the importance of good corporate governance and corporate social responsibility for sustainable development, and affirming their aim to encourage enterprises to observe internationally recognised guidelines and principles in this respect, such as the Organisation for Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises, the OECD Principles of Corporate Governance and the UN Global Compact;
CONVINCED that this Agreement will enhance the competitiveness of their firms in global markets and create conditions encouraging economic, trade and investment relations between the Parties;
HAVE AGREED, in pursuit of the above, to conclude the following Free Trade Agreement (Agreement):
Body
Chapter 1. GENERAL PROVISIONS
Article 1.1. Objectives
1. The Parties hereby establish a free trade area in accordance with the provisions of this Agreement and the complementary agreements on agriculture, concluded between Turkey and each individual EFTA State, which is based on trade relations between market economies and on the respect for democratic principles and human rights, with a view to spurring prosperity and sustainable development.
2. The objectives of this Agreement are:
(a) to achieve the liberalisation of trade in goods, in conformity with Article XXIV of the General Agreement on Tariffs and Trade 1994 (GATT 1994);
(b) to facilitate trade in goods through, in particular, the application of the agreed provisions regarding customs and trade facilitation;
(c) to prevent, eliminate or reduce unnecessary technical barriers to trade and unnecessary sanitary and phytosanitary measures;
(d) to achieve the liberalisation of trade in services, in conformity with Article V of the General Agreement on Trade in Services (GATS);
(e) to ensure adequate and effective protection and enforcement of intellectual property rights;
(f) to explore liberalisation on a mutual basis of the government procurement markets of the Parties;
(g) to promote competition in their economies, particularly as it relates to the economic relations between the Parties;
(h) to develop international trade in such a way as to contribute to the objective of sustainable development and to ensure that this objective is integrated and reflected in the Parties' trade relationship;
(i) to increase and enhance the economic cooperation between the Parties; and
(j) to contribute to the harmonious development and expansion of world trade.
Article 1.2. Geographical Scope
1. This Agreement shall, except as otherwise specified in Annex I (Rules of Origin and Methods of Administrative Cooperation), apply to:
(a) the land territory, internal waters and the territorial sea of a Party, and the ait-space above the territory of a Party, in accordance with international law; and
(b) the exclusive economic zone and the continental shelf of a Party, in accordance with international law.
2. This Agreement shall not apply to the Norwegian territory of Svalbard, with the exception of trade in goods.
Article 1.3. Trade and Economic Relations Governed by this Agreement
1. This Agreement applies to the trade and economic relations between the individual EFTA States on one side and Turkey on the other, but not to the trade and economic relations between individual EFTA States, unless otherwise provided in this Agreement.
2. In accordance with the Customs Treaty of 29 March 1923 between Switzerland and Liechtenstein, Switzerland shall represent Liechtenstein in matters covered thereby.
Article 1.4. Relations to other International Agreements
1. The Parties confirm their rights and obligations under the WTO Agreement and the other agreements negotiated thereunder to which they are a party, and any other international agreement to which they are a party.
2. If a Party considers that the maintenance or establishment of a customs union, free trade area, arrangement for frontier trade or another preferential agreement by another Party has the effect of altering the trade regime provided for by this Agreement, it may request consultations. The Party concluding such agreement shall afford adequate opportunity for consultations with the requesting Party.
Article 1.5. Fulfilment of Obligations
1. Each Party shall take any general or specific measures required to fulfil its obligations under this Agreement.
2. Each Party shall ensure the observance of all obligations and commitments under this Agreement by its respective central, regional and local governments and authorities, and by non-governmental bodies in the exercise of governmental powers delegated to them by central, regional and local governments or authorities.
Article 1.6. Transparency
1. The Parties shall publish, or otherwise make publicly available, their laws, regulations, judicial decisions, administrative rulings of general application, as well as their respective international agreements, that may affect the operation of this Agreement.
2. The Parties shall promptly respond to specific questions and provide, upon request, information to each other on matters referred to in paragraph 1.
3. Nothing in this Agreement shall require any Party to disclose confidential information, the disclosure of which would impede law enforcement, be contrary to the public interest or prejudice the legitimate commercial interests of any economic operator.
4. In case of any inconsistency between paragraphs 1 and 2 of this Article and provisions relating to transparency in other parts of this Agreement, the latter shall prevail to the extent of the inconsistency.
Chapter 2. TRADE IN GOODS
Article 2.1. Scope
This Chapter applies to the following goods traded between the Parties:
(a) all products classified under Chapters 25 to 97 of the Harmonized Commodity Description and Coding System (HS), excluding the products listed in Annex II (Products not covered by the Agreement);
(b) processed agricultural products specified in Annex II (Processed Agricultural Products), with due regard to the arrangements provided for in Annex III; and
(c) fish, fisheries products and other marine products as provided for in Annex IV (Fish, Fisheries Products and Other Marine Products).
Article 2.2. Trade In Basic Agricultural Products
1. The Parties declare their readiness to foster, in so far as their agricultural policies allow, the harmonious development of trade in agricultural products.
2. Turkey and each EFTA State have concluded agreements on trade in agricultural products on a bilateral basis. These agreements form part of the instruments establishing the free trade area between the Parties.
Article 2.3. Rules of Origin and Methods of Administrative Cooperation
Provisions related to rules of origin are set out in Annex I (Rules of Origin and Methods of Administrative Cooperation).
Article 2.4. Import Duties
1. Upon entry into force of this Agreement, the Parties shall abolish all customs duties and charges having equivalent effect to customs duties on imports of products originating in a Party covered by subparagraph (a) of Article 2.1 (Scope). No new customs duties and charges having equivalent effect to customs duties on imports shall be introduced.
2. Customs duties and charges having equivalent effect to customs duties on imports include any duty or charge of any kind imposed in connection with the importation of a product, including any form of surtax or surcharge, but does not include any charge imposed in conformity with Articles III and VIM of the GATT 1994.
Article 2.5. Export Duties
1. The Parties shall, upon entry into force of this Agreement, eliminate all customs duties and other charges, including surcharges and other forms of contributions, in relation to the exportation of goods to a Party. 2. No new customs duties or other charges in relation to the exportation of goods to a Party shall be introduced.
Article 2.6. Customs Valuation (1)
For the purposes of determining the customs value of products traded between the Parties, Article VII of the GATT 1994 and Part I of the Agreement on Implementation of Article VII of the GATT 1994 shall apply and are hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.7. Quantitative Restrictions
With respect to the rights and obligations of the Parties concerning quantitative restrictions, Paragraph 1 of Article XI of the GATT 1994 shall apply and is hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.8. Fees and Formailities
With respect to the rights and obligations of the Parties concerning fees and formalities, Article VIII of the GATT 1994 shall apply and is hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.9. Internal Taxation and Regulations
With respect to the rights and obligations of the Parties concerning internal taxation and regulations, Article III of the GATT 1994 shall apply and is hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.10. Payments
Payments relating to trade between the Parties and the transfer of such payments to a Party, where the creditor resides, shall be free from any restrictions, except as otherwise provided for in Article 2.22 (Balance-of-Payments).
Article 2.11. Sanitary and Phytosanitary Measures
1. Except as otherwise provided for in this Agreement, the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement) shall apply and is hereby incorporated into and made part of this Agreement, mutatis mutandis.
2. Import checks shall be carried out without undue delay.
3. The Parties shall exchange names and addresses of contact points with sanitary and phytosanitary expertise, in order to facilitate communication and the exchange of information.
4. Consultations shall be held at the request of a Party which considers that another Party has taken a measure which is likely to create, or has created, an obstacle to trade. Such consultations shall take place without undue delay after the receipt of the request, with the objective of finding mutually acceptable solutions. If consultations are not taking place in the Joint Committee, it should be informed thereof. In case of perishable goods, consultations between the competent authorities shall be held without undue delay. Such consultations may be conducted by any agreed method. (2)
5. Upon request by a Party, the Parties shall jointly review this Article with a view to extending treatment granted to the European Union with whom all Parties have established arrangements concerning sanitary and phytosanitary regulations, to the Parties of this Agreement.
Article 2.12. Technical Regulations
1. Except as otherwise provided for in this Article, the WTO Agreement on Technical Barriers to Trade (TBT Agreement) shall apply and is hereby incorporated into and made part of this Agreement, mutatis mutandis.
2. The Parties shall exchange names and addresses of contact points with expertise on technical regulations in order to facilitate communication and the exchange of information.
3. Consultations shall be held at the request of a Party which considers that another Party has taken a measure which is likely to create, or has created, an obstacle to trade. Such consultations shall take place within 40 days from the receipt of the request with the objective of finding mutually acceptable solutions. If consultations are held outside the framework of the Joint Committee, it should be informed thereof. Such consultations may be conducted by any agreed method (3).
4. The rights and obligations of the Parties related to the mutual recognition of conformity assessment of products are set out in Annex V (Mutual Recognition of Results of Conformity Assessment of Products).
Article 2.13. Trade Facilitation
Provisions related to trade facilitation are set out in Annex VI (Trade Facilitation).
Article 2.14. Mutual Administrative Assistance In Customs Matters
Provisions related to mutual administrative assistance in customs matters are set out in Annex VII (Mutual Administrative Assistance in Customs Matters).
Article 2.15. Sub-Committee on Customs Matters
A Sub-Committee on Customs Matters is hereby established and its mandate is set out in Annex VIII (Mandate of the Sub-Committee on Customs Matters).
Article 2.16. State Trading Enterprises
With respect to the rights and obligations of the Parties concerning state trading enterprises, Article XVII of the GATT 1994 and the Understanding on the Interpretation of Article XVII of the GATT 1994 shall apply and are hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.17. Subsidies and Countervailing Measures
1. The rights and obligations of the Parties relating to subsidies and countervailing measures shall be governed by Articles VI and XVI of the GATT 1994 and the WTO Agreement on Subsidies and Countervailing Measures, except as provided for in paragraph 2.
2. Before a Party initiates an investigation to determine the existence, degree and effect of any alleged subsidy in another Party, as provided for in Article 11 of the WTO Agreement on Subsidies and Countervailing Measures, the Party considering initiating an investigation shall notify in writing the Party whose goods are subject to such investigation, afford reasonable opportunity for consultations in accordance with Article 13 of the WTO Agreement on Subsidies and Countervailing Measures, and allow for a 45 days period with a view to finding a mutually acceptable solution. The consultations shall take place in the Joint Committee if a Party so requests. This 45 days period should not prevent the authorities of a Party from proceeding expeditiously with regard to initiating an investigation.
Article 2.18. Anti-dumping
1. The rights and obligations of the Parties relating to anti-dumping investigations and measures shall be governed by Article VI of the GATT 1994 and the Agreement on Implementation of Article VI of the GATT 1994 (WTO Anti-dumping Agreement), except as provided for in this Article.
2. The Parties shall endeavour to refrain from initiating anti-dumping procedures under Article VI of the GATT 1994 and the WTO Anti-dumping Agreement against each other.
3. When a Party receives a properly documented application and before initiating an investigation under the WTO Anti-dumping Agreement, the Party shall notify in writing the Party whose goods are allegedly being dumped.
4. If a Party decides to impose an anti-dumping duty, the Party is encouraged to apply the "lesser duty" rule by determining a duty which is less than the dumping margin, provided that such lesser duty would be adequate to remove the injury to the domestic industry.
5. The Parties shall exchange views about the application of this Article and its effects on trade between the Parties at the meetings of the Joint Committee.
Article 2.19. Global Safeguard Measures
1. The rights and obligations of the Parties with respect to global safeguards shall be governed by Article XIX of the GATT 1994 and the WTO Agreement on Safeguards. 2. Upon initiation of an investigation in accordance with paragraph 1 that may affect another Party, the investigating Party shall notify that Party and afford reasonable opportunity for consultations. The consultations shall take place in the Joint Committee, if a Party so requests.
Article 2.20. General Exceptions
With respect to the rights and obligations of the Parties concerning general exceptions, Article XX of the GATT 1994 shall apply and is hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.21. Security Exceptions
With respect to the rights and obligations of the Parties concerning security exceptions, Article XXI of the GATT 1994 shall apply and is hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.22. Balance-of-Payments
1. A Party in serious balance of payments difficulties, or under imminent threat thereof, may, in accordance with the conditions established under the GATT 1994, adopt trade restrictive measures, which shall be of limited duration and nondiscriminatory, and may not go beyond what is necessary to remedy the balance of payments situation.
2. The Party introducing a measure under this Article shall promptly notify the other Parties thereof.
Chapter 3. TRADE IN SERVICES
Article 3.1. Scope and Coverage
1. This Chapter applies to measures by Parties affecting trade in services taken by central, regional or local governments and authorities, and by non-governmental bodies in the exercise of powers delegated by central, regional or local governments or authorities.
2. With respect to air transport services, this Chapter shall not apply to measures affecting air traffic rights or measures affecting services directly related to the exercise of air traffic rights, except as provided for in paragraph 3 of the Annex on Air Transport Services of the GATS. The definitions contained in paragraph 6 of the Annex on Air Transport Services of the GATS shall apply and are hereby incorporated into and made part of this Chapter.
3. Articles 3.3 (Most-Favoured-Nation Treatment), 3.4 (Market Access) and 3.5 (National Treatment) shall not apply to domestic laws, regulations or requirements governing the procurement by governmental agencies of services purchased for governmental purposes and not with a view to commercial resale or with a view to use in the supply of services for commercial sale.
Article 3.2. Definitions
For the purposes of this Chapter:
(a) “trade in services” is defined as the supply of a service:
(i) from the territory of one Party into the territory of another Party;
(ii) in the territory of one Party to the service consumer of another Party;
(iii) by a service supplier of one Party, through commercial presence in the territory of another Party;
(iv) by a service supplier of one Party, through presence of natural persons of a Party in the territory of another Party;
(b) “services” includes any service in any sector except services supplied in the exercise of governmental authority;
(c) “a service supplied in the exercise of governmental authority” means any service which is supplied neither on a commercial basis, nor in competition with one or more service suppliers;
(d) “measure” means any measure by a Party, whether in the form of a law, regulation, rule, procedure, decision, administrative action, or any other form;
(e) “supply of a service” includes the production, distribution, marketing, sale and delivery of a service;
(f) “measures by Parties affecting trade in services” includes measures in respect of:
(i) the purchase, payment or use of a service;
(ii) the access to and use of, in connection with the supply of a service, services which are required by those Parties to be offered to the public generally;
(iii) the presence, including commercial presence, of persons of a Party for the supply of a service in the territory of another Party;
(g) “commercial presence” means any type of business or professional establishment, including through:
(i) the constitution, acquisition or maintenance of a juridical person; or
(ii) the creation or maintenance of a branch or a representative office;
within the territory of a Party for the purpose of supplying a service;
(h) “sector” of a service means:
(i) with reference to a specific commitment, one or more, or all, subsectors of that service, as specified in a Party’s Schedule of Specific Commitments;
(ii) otherwise, the whole of that service sector, including all of its subsectors;
(i) “service of another Party” means a service which is supplied:
(i) from or in the territory of that other Party, or in the case of maritime transport, by a vessel registered under the laws of that other Party, or by a person of that other Party which supplies the service through the operation of a vessel and/or its use in whole or in part; or
(ii) in the case of the supply of a service through commercial presence or through the presence of natural persons, by a service supplier of that other Party;
(j) “service supplier” means any person that supplies, or seeks to supply, a service; (4)