Title
Additional Protocol to the Agreement Establishing an Association between the European Economic Community and Turkey
Preamble
PREAMBLE
HIS MAJESTY THE KING OF THE BELGIANS,
THE PRESIDENT OF THE FEDERAL REPUBLIC OF GERMANY,
THE PRESIDENT OF THE FRENCH REPUBLIC,
THE PRESIDENT OF THE ITALIAN REPUBLIC,
HIS ROYAL HIGHNESS THE GRAND DUKE OF LUXEMBOURG,
HER MAJESTY THE QUEEN OF THE NETHERLANDS,
and
THE COUNCIL OF THE EUROPEAN COMMUNITIES,
of the one part, and
THE PRESIDENT OF THE REPUBLIC OF TURKEY,
of the other part,
WHEREAS the Agreement establishing an Association between the European Economic Community and Turkey provides that the preparatory stage of the Association is to be followed by a transitional stage;
ACKNOWLEDGING that the preparatory stage has done much, in accordance with the objectives of the Association Agreement, to strengthen economic relations in general, and to expand trade in particular, between the European Economic Community and Turkey;
BELIEVING that the conditions have been established for passing from the preparatory stage to the transitional stage;
RESOLVED to adopt, in the form of an Additional Protocol the provisions relating to the conditions, arrangements and timetables for the implementation of the transitional stage;
WHEREAS during the transitional stage the Contracting Parties are to ensure, on the basis of mutual and balanced obligations, the progressive establishment of a customs union between Turkey and the Community and the closer alignment of the economic policies of Turkey and the Community in order to ensure the proper functioning of the Association and the progress of the joint measures which this requires;
HIS MAJESTY THE KING OF THE BELGIANS:
Mr Pierre HARMEL,
Minister for Foreign Affairs;
THE PRESIDENT OF THE FEDERAL REPUBLIC OF GERMANY:
Mr Walter SCHEEL,
Minister for Foreign Affairs;
THE PRESIDENT OF THE FRENCH REPUBLIC:
Mr Maurice SCHUMANN,
Minister for Foreign Affairs;
THE PRESIDENT OF THE ITALIAN REPUBLIC:
Mr Mario PEDINI,
Under-Secretary of State for Foreign Affairs;
HIS ROYAL HIGHNESS THE GRAND DUKE OF LUXEMBOURG:
Mr Gaston THORN,
Minister for Foreign Affairs;
HER MAJESTY THE QUEEN OF THE NETHERLANDS:
Mr J. M. A. H. LUNS,
Minister for Foreign Affairs;
THE COUNCIL OF THE EUROPEAN COMMUNITIES:
Mr Walter SCHEEL,
President in Office of the Council of the European Communities;
Mr Franco Maria MALFATTI,
President of the Commission of the European Communities;
THE PRESIDENT OF THE REPUBLIC OF TURKEY:
Mr Ihsan Sabri ÇAGLAYANGÍL,
Minister for Foreign Affairs;
HAVE AGREED upon the following provisions, which shall be annexed to the Agreement of Association:
Body
Article 1.
This Protocol lays down the conditions, arrangements and timetables for implementing the transitional stage referred to in Article 4 of the Agreement establishing an Association between the European Economic Community and Turkey.
Title I. FREE MOVEMENT OF GOODS
Article 2.
1. Chapter I, Section I, and Chapter II of this Title shall apply:
(a) to goods produced in the Community or in Turkey, including those wholly or partially obtained or produced from products coming from third countries which are in free circulation in the Community or in Turkey;
(b) to goods coming from third countries and in free circulation in the Community or in Turkey.
2. Products coming from third countries shall be considered to be in free circulation in the Community or in Turkey if the import formalities have been complied with and any customs duties or charges having equivalent effect which are payable have been levied in the Community or in Turkey, and if they have not benefited from a total or partial drawback of such duties or charges.
3. Goods imported from third countries into the Community or into Turkey and accorded special customs treatment by reason of their country of origin or of exportation, shall not be considered to be in free circulation in the territory of one Contracting Party if they are re-exported to the other Contracting Party. The Council of Association may, however, make exceptions to this rule under conditions which it shall lay down.
4. Paragraphs 1 and 2 shall apply only to goods exported from the Community on or after the date of signature of this Protocol.
Article 3.
1. Chapter I, Section I, and Chapter II of this Title shall likewise apply to goods obtained or produced in the Community or in Turkey, in the manufacture of which were used products coming from third countries and not in free circulation either in the Community or in Turkey. These provisions shall, however, apply to those goods only if the exporting State charges a countervailing levy, the rate of which is a percentage of the duties laid down in the Common Customs Tariff for third country products used in their manufacture. This percentage, fixed by the Council of Association for each of such periods as it may determine, shall be based on the tariff reduction granted on those goods in the importing State. The Council of Association shall also lay down the rules for the countervailing levy, taking into account the relevant rules in force before 1 July 1968 in trade between Member States.
2. The countervailing levy shall not, however, be charged on exports from the Community or from Turkey of goods obtained or produced under the conditions mentioned in this Article while the reduction of customs duties on the majority of goods imported into the territory of the other Contracting Party does not exceed 20 %, taking into account the various timetables for tariff reductions fixed by this Protocol.
Article 4.
The Council of Association shall determine the methods of administrative cooperation to be used in implementing Articles 2 and 3, taking into account the methods laid down by the Community with regard to trade between Member States.
Article 5.
1. If either Contracting Party considers that differences arising from the application to imports of customs duties, quantitative restrictions or any measures having equivalent effect, or from any other measure of commercial policy, threaten to deflect trade or to cause economic difficulties in its territory, it may bring the matter before the Council of Association, which shall, if necessary, recommend appropriate methods for avoiding any harm liable to result therefrom.
2. Where deflections occur or economic difficulties arise and the Party concerned considers that they call for immediate action, that Party may itself take the necessary protective measures, and shall notify the Council of Association thereof without delay; the Council of Association may decide whether the Party concerned shall amend or abolish those measures.
3. In the choice of such measures preference shall be given to those which least disturb the operation of the Association and, in particular, the normal development of trade.
Article 6.
During the transitional stage the Contracting Parties shall, in so far as may be- necessary for the proper functioning of the Association, take steps to approximate their law, regulation or administrative action in respect of customs matters, taking into account the approximations already effected by the Member States of the Community.
Chapter I. THE CUSTOMS UNION
Section I. Elimination of Customs Duties between the Community and Turkey
Article 7.
1. The Contracting Parties shall refrain from introducing between themselves any new customs duties on imports or exports or charges having equivalent effect, and from increasing those already applied, in their trade with each other at the date of entry into force of this Protocol.
2. The Council of Association may, however, authorize the Contracting Parties to introduce new customs duties on exports or charges having equivalent effect if they are necessary for the attainment of the objectives of the Agreement.
Article 8.
Customs duties on imports and charges having equivalent effect, in force between the Community and Turkey, shall be progressively abolished in accordance with Articles 9 to 11.
Article 9.
On the entry into force of this Protocol, the Community shall abolish customs duties and charges having equivalent effect on imports from Turkey.
Article 10.
1. For each product, the basic duty on which Turkey is to apply the successive reductions shall be the duty actually applied in respect of the Community at the date of signature of this Protocol.
2. The timetable for the reductions to be effected by Turkey shall be as follows: the first reduction shall be made on the entry into force of this Protocol. The second and third shall be applied three years and five years later. The fourth and subsequent reductions shall be made each year in such a way that the final reduction is made at the end of the transitional stage.
3. Each reduction shall be made by lowering the basic duty on each product by 10 %.
Article 11.
Notwithstanding Article 10 (2) and (3), Turkey shall progressively abolish, over a period of twenty-two years, in accordance with the following timetable, the basic duties in respect of the Community on the products listed in Annex 3: a reduction of 5 % on each duty shall be made on the entry into force of this Protocol. Three further reductions, each of 5 %, shall be made three, six and ten years later.
Eight further reductions, each of 10 %, shall be made twelve, thirteen, fifteen, seventeen, eighteen, twenty, twenty-one and twenty-two years respectively after the entry into force of this Protocol.
Article 12.
1. Turkey may, during the first eight years of the transitional stage, make the amendments to Annex 3 which are needed to protect the development of a processing industry which did not exist in Turkey at the time of entry into force of this Protocol, or to ensure the expansion in accordance with the Turkish development plan in force at the time, of an existing processing industry. Such amendments may, however, only be made on condition that:
— in aggregate they relate to not more than 10 % by value of imports from the Community in 1967, calculated at 1967 prices;
— the value of imports from the Community of all products listed in Annex 3, calculated at 1967 prices, is not increased.
Products added to Annex 3 may immediately be made liable to duties calculated in accordance with Article 11; those products which are removed from that list shall immediately be made liable to duties calculated in accordance with the provisions of Article 10.
2. Turkey shall notify the Council of Association of the measures which it proposes to take pursuant to the above provisions.
3. To the same end as that mentioned in paragraph 1 above, and within the limit of 10 % of imports from the Community in 1967, the Council of Association may authorize Turkey, during the transitional stage, to reintroduce, increase or impose customs duties on imports of products subject to the arrangements set out in Article 10.
These tariff measures shall not, for any of the tariff headings which they affect, raise the duty on imports from the Community to more than 25 % ad valorem.
4. The Council of Association may derogate from paragraphs 1 and 3.
Article 13.
1. Irrespective of the provisions of Articles 9 to 11, each Contracting Party may suspend in whole or in part the collection of duties applied by it to products imported from the other Party, in particular, as regards Turkey, for the purpose of stimulating imports of certain products necessary for its economic development; the other Contracting Party shall be informed of such measures.
2. The Contracting Parties declare their readiness to reduce their duties in trade with the other Party more rapidly than is provided for in Articles 9 to 11 if its general economic situation and the situation of the economic sector concerned so permit. The Council of Association shall make recommendations to this end.
Article 14.
Where, in respect of a country outside the Association, Turkey applies a shorter timetable than is provided for in Articles 10 and 11 to the elimination of a charge having effect equivalent to a customs duty, the same timetable shall be applied to the elimination of that charge in respect of the Community.
Article 15.
Without prejudice to Article 7 (2), the Contracting Parties shall, at the latest four years after the entry into force of this Protocol, abolish between themselves, customs duties on exports and charges having equivalent effect.
Article 16.
1. Article 7 (1) and Articles 8 to 15 shall also apply to customs duties of a fiscal nature.
2. On the entry into force of this Protocol the Community and Turkey shall inform the Council of Association of their customs duties of a fiscal nature.
3. Turkey shall retain the right to substitute for these customs duties of a fiscal nature an internal tax which complies with the provisions of Article 44.
4. If the Council of Association finds that substitution for any customs duty of a fiscal nature meets with serious difficulties in Turkey, it shall authorize that country to retain the duty on condition that it shall abolish it not later than the end of the transitional stage. Such authorization must be requested within twelve months of the entry into force of this Protocol.
Turkey may provisionally continue to apply such a duty until a decision has been taken by the Council of Association.
Section II. Adoption by Turkey of the Common Customs Tariff
Article 17.
The Turkish Customs Tariff shall be aligned on the Common Customs Tariff during the transitional stage on the basis of the duties actually applied by Turkey in respect of third countries at the date of signature of this Protocol, and in accordance with the following rules:
1. In the case of products on which the duties actually applied by Turkey at the date indicated above do not differ by more than 15 % either way from the duties in the Common Customs Tariff, the latter duties shall be applied one year after the second reduction of duties provided for in Article 10.
2. In any other case Turkey shall, one year after the second reduction of duties provided for in Article 10, apply duties reducing by 20 % the difference between the duty actually applied at the date of signature of this Protocol and the duty in the Common Customs Tariff.
3. When the fifth and seventh reductions of customs duties provided for in Article 10 are applied, this difference shall be further reduced by 20 %.
4. The Common Customs Tariff shall be applied in its entirety when the tenth reduction of customs duties provided for in Article 10 is applied.
Article 18.
Notwithstanding Article 17 Turkey shall, for the products listed in Annex 3, align its customs tariff over a period of twenty-two years in accordance with the following rules:
1. In the case of products for which the duties actually applied by Turkey on the date of signature of this Protocol do not differ from the Common Customs Tariff duties by more than 15 % either way, the latter duties shall be applied from the date of the fourth reduction of duties provided for in Article 11.
2. In any-other case Turkey shall, from the date of the fourth reduction of duties provided for in Article 11, apply duties reducing by 20 % the difference between the duty actually applied at the date of signature of this Protocol and the duty in the Common Customs Tariff.
3. When the seventh and ninth reductions provided for in Article 11 are applied, this difference shall be further reduced by 30 % and 20 %, respectively.
4. The Common Customs Tariff shall be applied in its entirety at the end of the twenty-second year.
Article 19.
1. In the case of particular products making up not more than 10 % of the total value of its imports in 1967, Turkey may, after consultation in the Council of Association, defer until the end of the twenty-second year after the entry into force of this Protocol the reductions of duties in respect of third countries which it should otherwise make under Articles 17 and 18.
2. In the case of particular products making up not more than 5 % of the total value of its imports in 1967, Turkey may, after consultation in the Council of Association, retain after a period of twenty-two years customs duties in respect of third countries which are higher than those in the Common Customs Tariff.
3. However, the application of the preceding paragraphs must not prejudice the free movement of goods within the Association and shall not entitle Turkey to invoke the provisions of Article 5.
4. Where alignment of the Turkish Customs Tariff with the Common Customs Tariff has been accelerated, Turkey shall maintain in favour of the Community a preference equivalent to that resulting from the arrangements provided for in this Chapter.
As regards the products listed in Annex 3, no such acceleration may take place before the end of the transitional stage, unless prior authorization has been given by the Council of Association.
5. As regards customs duties which have been authorized pursuant to the first subparagraph of Article 16 (4) or which Turkey may provisionally maintain in accordance with the second -subparagraph of Article 16 (4), Articles 17 and 18 need not be applied. On expiry of the authorization, Turkey shall apply the duties provided for in Articles 17 and 18.
Article 20.
1. To facilitate the importation of particular goods from countries with which Turkey has concluded bilateral trade agreements, Turkey may, with the prior authorization of the Council of Association, grant tariff quotas at reduced or zero rates of duty, if the functioning of those agreements is appreciably affected by the application of this Protocol or by measures taken in pursuance thereof.
2. Such authorization shall be deemed to have been given when the tariff quotas mentioned in the preceding paragraph comply with the following conditions:
(a) the total annual value of such quotas does not exceed 10 % of the average value of Turkish imports from third countries during the past three years for which statistics are available, excluding from such imports those which were made with the help of the means referred to in Annex 4. Imports from third countries admitted free of duty within the framework of Annex 4 shall be deducted from this 10 %;
(b) in the case of each product, the value of imports provided for within the framework of the tariff quotas shall not exceed one third of the average value of Turkish imports of that product from third countries in the past three years for which statistics are available.
3. Turkey shall notify the Council of Association of measures which it envisages taking in pursuance of paragraph 2.
At the end of the transitional stage the Council of Association may decide whether the provisions of paragraph 2 should be repealed or amended.
4. In no case may the duty under a tariff quota be lower than that actually applied by Turkey to imports from the Community.
Chapter II. ELIMINATION OF QUANTITATIVE RESTRICTIONS BETWEEN THE CONTRACTING PARTIES
Article 21.
Quantitative restrictions on imports and all measures having equivalent effect shall, without prejudice to the following provisions, be prohibited between the Contracting Parties.
Article 22.
1. The Contracting Parties shall refrain from introducing any new quantitative restrictions on imports or measures having equivalent effect.
2. However, as regards Turkey, this obligation shall, at the date of the entry into force of this Protocol, apply only to 35 % of Turkish imports on private account from the Community in 1967. This percentage shall be increased to 40 %, 45 %, 60 % and 80 %, three, eight, thirteen and eighteen years after the entry into force of this Protocol.
3. Six months before each of the dates of the last three increases the Council of Association shall review the consequences for the economic development of Turkey of increasing the degree of liberalization and shall, if this is necessary for achievement of an accelerated development of the Turkish economy, decide to postpone the increase for a period which it shall determine.
In the absence of a decision, the increase shall be postponed for one year. The review procedure shall be repeated six months before expiry of that period. A further postponement of a year shall take place if the Council of Association again takes no decision.
At the end of this second period, Turkey shall implement the increase in the degree of liberalization unless a decision to the contrary has been taken by the Council of Association.
4. A list of products whose importation from the Community has been liberalized shall be supplied to the Community at the time of signature of this Protocol. The list shall be consolidated in respect of the Community. The lists of products liberalized at the deadlines mentioned in paragraph 2 shall also be supplied to the Community and consolidated in its respect.
5. Turkey may reintroduce quantitative restrictions on imports of products which have been liberalized but not consolidated pursuant to this Article, on condition that it opens quotas in favour of the Community equal to at least 75 % of the average imports from the Community during the three years preceding that reintroduction. These quotas shall be subject to the provisions of Article 25 (4).
6. In no case may Turkey apply to the Community a treatment less favourable than that accorded to third countries.
Article 23.
Without prejudice to Article 22 (5) the Contracting Parties shall, in their trade with one another, refrain from making more restrictive the quantitative restrictions on imports and measures having equivalent effect existing at the date of entry into force of this Protocol.