The Community shall, on the entry into force of this Protocol, abolish all quantitative restrictions on imports from Turkey. This liberalization shall be consolidated in respect of Turkey.

Article 25.

1. Turkey shall progressively abolish quantitative restrictions on imports from the Community in accordance with the provisions of the following paragraphs.

2. One year after the entry into force of this Protocol quotas in favour of the Community shall be opened for imports of each product which has not been liberalized in Turkey. These quotas shall be fixed so as to correspond to the average imports from the Community in the last three years for which statistics are available, excluding imports financed:

(a) by special aid resources connected with specific investment projects;

(b) without allocation of foreign currency;

(c) under the law on the promotion of foreign capital investment.

3. Where, in respect of a product which has not been liberalized, imports from the Community in the first year after the entry into force of this Protocol amount to less than 7 % of total imports of that product, a quota equal to 7 % of those imports shall be opened one year after the entry into force of this Protocol.

4. Three years after the entry into force of this Protocol Turkey shall increase the aggregate of the quotas so opened by not less than 10 % over the amount thereof for the preceding year and by not less than 5 % by value of the quota for each product. These amounts shall be increased every two years in the same proportion in relation to the preceding period.

5. From the thirteenth year after the entry into force of this Protocol each quota shall be increased every two years by at least 20 % in relation to the preceding period.

6. Where, in respect of a product which has not been liberalized, there have been no imports into Turkey in the first year after the entry into force of this Protocol, the rules for opening and increasing quotas shall be laid down by the Council of Association.

7. If the Council of Association finds that during two successive years the imports of any product which has not been liberalized have been appreciably below the level of the quota opened, that quota shall not be taken into account in calculating the total value of the quotas. In such case Turkey shall abolish quota restrictions on that product in respect of the Community.

8. All quantitative restrictions on imports into Turkey shall be abolished not later than twenty-two years after the entry into force of this Protocol.

Article 26.

1. The Contracting Parties shall, within twenty-two years, abolish all measures having an effect equivalent to quantitative restrictions on imports from each other. The Council of Association shall recommend the progressive adjustments to be made during this period, taking into account provisions adopted within the Community.

2. In particular, Turkey shall, in accordance with the timetables laid down in Articles 10 and 11, progressively abolish the deposits required from importers for imports of goods from the Community.

Moreover, deposits amounting to more than 140 % of the dutiable value for customs purposes of goods imported from the Community, in the case of motor vehicle spare parts and accessories falling within heading No 87.06 of the Turkish Customs Tariff, and to more than 120 % of that value in the case of other products, shall be reduced to these levels on the entry into force of this Protocol.

Article 27.

1. Quantitative restrictions on exports, and all measures having equivalent effect, shall be prohibited between the Contracting Parties.

The Community and Turkey shall, by the end of the transitional stage at the latest, abolish between themselves all quantitative restrictions on exports and any measures having equivalent effect.

2. Notwithstanding the preceding paragraph, the Community and Turkey may, after consultation in the Council of Association, retain or introduce restrictions on exports of basic products to the extent necessary to promote the development of specific sectors of their economies or to meet any shortage of those products.

In that event, the Party concerned shall open in favour of the other Party a quota which takes into account the average exports for the last three years for which statistics are available and the normal development of trade resulting from the progressive achievement of the customs union.

Article 28.

Turkey declares its readiness to abolish quantitative restrictions on imports from and exports to the Community more rapidly than is provided for in the preceding Articles, if its general economic situation and the situation of the economic sector concerned so permit. To this end the Council of Association shall make recommendations to Turkey.

Article 29.

The provisions of Articles 21 to 27 shall not preclude prohibitions or restrictions on imports, exports or goods in transit justified on grounds of public morality, public policy or public security; the protection of health and life of humans, animals or plants; the protection of national treasures possessing artistic, historic or archaeological value; or the protection of industrial and commercial property. Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between the Contracting Parties.

Article 30.

1. The Contracting Parties shall progressively adjust any State monopolies of a commercial character so as to ensure that when the period of twenty-two years has ended no discrimination regarding the conditions under which goods are procured and marketed exists between nationals of Member States of the Community and nationals of Turkey.

The provisions of this Article shall apply to any body through which a Member State or Turkey, in law or in fact, either directly or indirectly supervises, determines or appreciably influences imports or exports between the Community and Turkey. These provisions shall also apply to monopolies delegated by the State to others.

2. The Contracting Parties shall refrain from introducing any new measure which is contrary to the principles laid down in paragraph 1 or which restricts the scope of the Articles dealing with the abolition of customs duties and quantitative restrictions between the Contracting Parties.

3. The procedure and the timetable in accordance with which the Turkish monopolies mentioned in this Article are to be adjusted and the barriers to trade between the Community and Turkey are to be lowered, shall be laid down by the Council of Association not later than six years after the entry into force of this Protocol.

Until the Council of Association takes the decision provided for in the preceding subparagraph, each Contracting Party shall apply to products subject to a monopoly in the territory of the other Contracting Party treatment at least as favourable as that applied to like products of the most-favoured third country.

4. The obligations on the Contracting Parties shall be binding only in so far as they are compatible with existing international agreements.

Chapter III. PRODUCTS SUBJECT TO SPECIFIC RULES ON IMPORTATION INTO THE COMMUNITY AS A RESULT OF THE IMPLEMENTATION OF THE COMMON AGRICULTURAL POLICY

Article 31.

The arrangements for agricultural products set out in Chapter IV shall apply to products which are subject, on importation into the Community, to specific rules as a result of the implementation of the common agricultural policy.

Chapter IV. AGRICULTURE

Article 32.

This Protocol shall extend to agricultural products, save as otherwise provided in Articles 33 to 35.

Article 33.

1. Over a period of twenty-two years Turkey shall adjust its agricultural policy with a view to adopting, at the end of that period, those measures of the common agricultural policy which must be applied in Turkey if free movement of agricultural products between it and the Community is to be achieved.

2. During the period mentioned in paragraph 1, the Community shall, in establishing and subsequently developing its agricultural policy, take into account the interests of Turkish agriculture. Turkey shall furnish the Community with all information which is relevant in this connection.

3. The Community shall inform Turkey of proposals from the Commission regarding the establishment and development of the common agricultural policy, and of the opinions issued and decisions taken with regard to such proposals.

4. The Council of Association shall decide what information on agriculture shall be supplied by Turkey to the Community.

5. The proposals from the Commission mentioned in paragraph 3, and the measures in respect of agriculture which Turkey envisages taking in accordance with paragraph 1, may be the subject of consultation in the Council of Association.

Article 34.

1. At the end of the period of twenty-two years the Council of Association, having established that Turkey has adopted the measures of the common agricultural policy which are referred to in Article 33 (1), shall adopt the provisions necessary for achieving the free movement of agricultural products between the Community and Turkey.

2. The provisions referred to in paragraph 1 may include any necessary derogations from the rules laid down in this Protocol.

3. The Council of Association may alter the date referred to in paragraph 1.

Article 35.

1. Pending the adoption of provisions under Article 34 and by way of derogation from Articles 7 to 11, 15 to 18, 19 (1) and (5), 21 to 27, and 30, the Community and Turkey shall grant each other preferential treatment in their trade in agricultural products. The scope of such preferential treatment and the arrangements therefor shall be decided by the Council of Association.

2. The treatment to be accorded from the beginning of the transitional stage is, however, laid down in Annex 6.

3. One year after the entry into force of this Protocol and every two years thereafter, the Council of Association shall, at the request of either Contracting Party, review the results of the preferential treatment for agricultural products. It may decide upon improvements which prove to be necessary for progressive attainment of the objectives of the Agreement of Association.

4. Article 34 (2) shall apply.

Title II. MOVEMENT OF PERSONS AND SERVICES

Chapter I. WORKERS

Article 36.

Freedom of movement for workers between Member States of the Community and Turkey shall be secured by progressive stages in accordance with the principles set out in Article 12 of the Agreement of Association between the end of the twelfth and the twenty-second year after the entry into force of that Agreement.

The Council of Association shall decide on the rules necessary to that end.

Article 37.

As regards conditions of work and remuneration, the rules which each Member State applies to workers of Turkish nationality employed in the Community shall not discriminate on grounds of nationality between such workers and workers who are nationals of other Member States of the Community.

Article 38.

While freedom of movement for workers between Member States of the Community and Turkey is being brought about by progressive stages, the Council of Association may review all questions arising in connection with the geographical and occupational mobility of workers of Turkish nationality, in particular the extension of work and residence permits, in order to facilitate the employment of those workers in each Member State.

To that end, the Council of Association may make recommendations to Member States.

Article 39.

1. Before the end of the first year after the entry, into force of this Protocol the Council of Association shall adopt social security measures for workers of Turkish nationality moving within the Community and for their families residing in the Community.

2. These provisions must enable workers of Turkish nationality, in accordance with arrangements to be laid down, to aggregate periods of insurance or employment completed in individual Member States in respect of old-age pensions, death benefits and invalidity pensions, and also as regards the provision of health services for workers and their families residing in the Community. These measures shall create no obligation on Member States to take into account periods completed in Turkey.

3. The abovementioned measures must ensure that family allowances are paid if a worker's family resides in the Community.

4. It must be possible to transfer to Turkey old-age pensions, death benefits and invalidity pensions obtained under the measures adopted pursuant to paragraph 2.

5. The measures provided for in this Article shall not affect the rights and obligations arising from bilateral agreements between Turkey and Member States of the Community, in so far as these agreements provide more favourable arrangements for Turkish nationals.

Article 40.

The Council of Association may make recommendations to Member States and Turkey for encouraging the exchange of young workers; the Council of Association shall be guided in the matter by the measures adopted by Member States in implementation of Article 50 of the Treaty establishing the Community.

Chapter II. RIGHT OF ESTABLISHMENT, SERVICES AND TRANSPORT

Article 41.

1. The Contracting Parties shall refrain from introducing between themselves any new restrictions on the freedom of establishment and the freedom to provide services.

2. The Council of Association shall, in accordance with the principles set out in Articles 13 and 14.of the Agreement of Association, determine the timetable and rules for the progressive abolition by the Contracting Parties, between themselves, of restrictions on freedom of establishment and on freedom to provide-services.

The Council of Association shall, when determining such timetable and rules for the various classes of activity, take into account corresponding measures already adopted by the Community in these fields and also the special economic and social circumstances of Turkey. Priority shall be given to activities making a particular contribution to the development of production and trade.

Article 42.

1. The Council of Association shall extend to Turkey, in accordance with the rules which it shall determine, the transport provisions of- the Treaty establishing the Community with due regard to the geographical situation of Turkey. In the same way it may extend to Turkey measures taken by the Community in applying those provisions in respect of transport by rail, road and inland waterway.

2. If provisions for sea and air transport are laid down by the Community, pursuant to Article 84 (2) of the Treaty establishing the Community, the Council of Association shall decide whether, to what extent and by what procedure provisions may be laid down for Turkish sea and air transport.

Title III. CLOSER ALIGNMENT OF ECONOMIC POLICIES

Chapter I. COMPETITION, TAXATION AND APPROXIMATION OF LAWS

Article 43.

1. The Council of Association shall, within six years of the entry into force of this Protocol, adopt the conditions and rules for the application of the principles laid down in Articles 85, 86, 90 and 92 of the Treaty establishing the Community.

2. During the transitional stage Turkey may be considered as being in the situation specified in Article 92 (3) (a) of the Treaty establishing the Community. Accordingly, aid to promote Turkish economic development shall be considered to be compatible with the proper functioning of the Association if such aid does not alter the conditions of trade to an extent inconsistent with the mutual interests of the Contracting Parties.

At the end of the transitional stage, the Council of Association shall, taking into account the economic situation of Turkey at that time, decide whether it is necessary to extend the period during which the preceding subparagraph shall apply.

Article 44.

1. Neither Contracting Party shall impose, directly or indirectly, on the products of the other Party any internal taxation of any kind in excess of that imposed directly or indirectly on similar domestic products.

Neither Contracting Party shall impose on the products of the other Party any internal taxation of such a nature as to afford indirect protection to other products.

The Contracting Parties shall, not later than the beginning of the third year after the entry into force of this Protocol, repeal any provisions existing at the date of its signature which conflict with the above rules.

2. In trade between the Community and Turkey, repayment of internal taxation in respect of exported products shall not exceed the internal taxation imposed on those products, whether directly or indirectly.

3. Where a turnover tax calculated on a cumulative multi-stage tax system is levied, average rates for products or. groups of products may be established, in the case of internal taxation imposed on imported products or of repayments allowed on exported products, provided that there is no infringement of the principles laid down in the preceding paragraphs.

4. The Council of Association shall ensure that the above provisions are applied, taking into account the experience of the Community in the field covered by this Article.

Article 45.

As regards trade between the Community and Turkey, and in the case of charges other than turnover taxes, excise duties and other forms of indirect taxation, remissions and repayments in respect of exports may not be granted, and countervailing charges in respect of imports may not be imposed, unless the measures contemplated have been approved in advance by the Council of Association and for a limited period.

Article 46.

The Contracting Parties may adopt any protective measures which they consider to be needed to overcome difficulties due to the absence of a decision by the Council of Association on the rules and. conditions of application provided for in Article 43 (1), or to the non-application of those decisions or of Articles 44 or 45.

Article 47.

1. If, during the period of twenty-two years, the Council of Association, on application by a Contracting Party, finds that dumping is being practised in trade between the Community and Turkey, it shall address recommendations to the person or persons with whom such practices originate for the purpose of putting an end to them.

2. The injured Party may, after notifying the Council of Association, take suitable protective measures where:

(a) the Council of Association has taken no decision pursuant to paragraph 1 within three months from the making of the application;

(b) despite the issue of recommendations under paragraph 1, the dumping practices continue.

Moreover, where the interests of the injured Party call for immediate action, that Party may, after informing the Council of Association, introduce interim protective measures which may include anti-dumping duties. Such measures shall not remain in force more than three months from the date of the application, or from the date on which the injured Party takes protective measures under (b) of the preceding subparagraph.

3. Where protective measures have been taken under (a) of the first subparagraph of paragraph 2, or under the second subparagraph of that paragraph, the Council of Association may, at any time, decide that such protective measures shall be suspended pending the issue of recommendations under paragraph 1.

The Council of Association may recommend the abolition or amendment of protective measures taken under (b) of the first subparagraph of paragraph 2.

4. Products which originated in or were in free circulation in one of the Contracting Parties and which have been exported to the other Contracting Party shall, on reimportation, be admitted into the territory of the former Contracting Party free of all customs duties, quantitative restrictions or measures having equivalent effect.

The Council of Association may make any appropriate recommendations for the application of this paragraph; it shall be guided by Community experience in this field.

Article 48.

The Council of Association may recommend the Contracting Parties to take measures to approximate the laws, regulations or administrative provisions in respect of fields which are not covered by this Protocol but have a direct bearing on the functioning of the Association, and of fields covered by this Protocol but for which no specific procedure is laid down therein.

Chapter II. ECONOMIC POLICY

Article 49.

In order to facilitate attainment of the objectives set out in Article 17 of the Agreement of Association, the Contracting Parties shall regularly consult each other in the Council of Association to coordinate their economic policies.

The Council of Association shall, where necessary, recommend appropriate measures.

Article 50.

1. The Contracting Parties declare their readiness to undertake the liberalization of payments beyond the extent provided for in Article 19 of the Agreement of Association, in so far as their economic situation in general and the state of their balance of payments in particular so permit.

2. In so far as movements of goods, services and capital are limited only by restrictions on payments connected therewith, these restrictions shall be progressively abolished by applying, mutatis mutandis, the provisions relating to the abolition of quantitative restrictions, the provision of services and to capital movements.

3. The Contracting Parties undertake not to make more restrictive the arrangements which they apply to transfers connected with the invisible transactions listed in Annex III to the Treaty establishing the Community, without the prior agreement of the Council of Association.

4. If need be, the Contracting Parties shall consult each other on measures to be taken to enable the payments and transfers mentioned in Article 19 of the Agreement of Association and in this Article to be effected.

Article 51.

In order to further the objectives set out in Article 20 of the Agreement of Association, Turkey shall, on the entry into force of this Protocol, endeavour to improve the treatment accorded to private capital from the Community which can contribute to the development of the Turkish economy.

Article 52.

The Contracting Parties shall endeavour to avoid introducing any new foreign exchange restrictions on the movement of capital and current payments connected therewith between themselves, and shall endeavour not to make the existing arrangements more restrictive.

The Contracting Parties shall simplify to the maximum extent possible authorization and control formalities applicable to the conclusion and carrying out of capital transactions and transfers, and shall, in so far as is necessary, consult each other for the purpose of achieving such simplification.

Chapter III. COMMERCIAL POLICY

Article 53.

1. The Contracting Parties shall consult each other in the Council of Association in order to achieve, during the transitional stage, the coordination of their commercial policies in relation to third countries, in particular in the fields mentioned in Article 113 (1) of the Treaty establishing the Community.

For this purpose, each Contracting Party shall, at the request of the other Party, furnish all relevant information on agreements which it concludes and which contain tariff or commercial provisions, as well as on changes which it makes in its external trade arrangements.

Where such agreements or changes might have a direct and particular effect on the functioning of the Association, there shall be appropriate consultation in the Council of Association in order to take into account the interests of the Contracting Parties.

2. At the end of the transitional stage, the Contracting Parties, meeting in the Council of Association, shall coordinate their commercial policies more closely with the aim of achieving a commercial policy based on uniform principles.

Article 54.

1. If the Community concludes an agreement of association or a preferential agreement having a direct and particular effect on the functioning of the Association, appropriate consultation shall take place in the Council of Association in order to enable the Community to take into account the mutual interests stated in the Agreement of Association between the Community and Turkey.

2. Turkey shall, where necessary to prevent barriers to the movement of goods within the Community, endeavour to take all appropriate measures for the solution of any practical problem which may arise in connection with trade between Turkey and countries linked to the Community by an association agreement or a preferential agreement.

Where such measures have not been taken, the Council of Association may adopt the necessary provisions for ensuring the proper functioning of the Association.

Article 55.

Consultations shall take place in the Council of Association on the implementation of ‘Regional Cooperation for Development’ (RCD).

The Council of Association may adopt any necessary provisions. These must not impede the proper functioning of the Association.

Article 56.

In the event of a third State acceding to the Community, appropriate consultations shall take place in the Council of Association so as to ensure that account can be taken of the mutual interests of the Community and Turkey stated -in the Agreement of Association.

Title IV. GENERAL AND FINAL PROVISIONS

Article 57.

The Contracting Parties shall progressively adjust the conditions for participation in contracts awarded by public authorities and public undertakings, and by private undertakings which have been granted special or exclusive rights, so that by the end of the period of twenty-two years there is no discrimination between nationals of Member States and nationals of Turkey established in the territory of the Contracting Parties.

The Council of Association shall determine the timetable and rules for this adjustment; when doing so it shall be guided by the solutions adopted by the Community in this field.

Article 58.

In the fields covered by this Protocol:

— the arrangements applied by Turkey in respect of the Community shall not give rise to any discrimination between Member States, their nationals or their companies or firms;

— the arrangements applied by the Community in respect of Turkey shall not give rise to any discrimination between Turkish nationals or Turkish companies or firms.

Article 59.

In the fields covered by this Protocol Turkey shall not receive more favourable treatment than that which Member States grant to one another pursuant to the Treaty establishing the Community.

Article 60.

1. If serious disturbances occur in a sector of the Turkish economy or prejudice its external financial stability, or if difficulties arise which adversely affect the economic situation in a region of Turkey, Turkey may rake the necessary protective measures.