Free Trade Agreements

04 Eylül 2018

In today’s world, countries have a tendency to engage in bilateral and regional FTAs because of World Trade Organization’s (WTO) under achievement in high level of liberalization, WTO’s regulations’ being not enough in today’s conditions and inefficiency of the multilateral trade system to provide better market access. As a result of this tendency, there are approximately 400 FTAs which are notified to WTO.

Turkey, being party to the General Agreement on Tariffs and Trade 1947 (GATT) and member of the World Trade Organisation (WTO) since 1995, conducts Free Trade Agreements in line with Article XXIV of GATT 1947. According to this Article, Turkey could grant more favourable treatment to its trading partners within a customs union or a free trade area without extending such treatment to all WTO Members, subject to certain conditions.

Without prejudice to WTO provisions, the Turkey-EU Customs Union constitutes major legal basis of Turkey’s free trade agreements (FTA). Under the Customs Union, Turkey shall align its commercial policy with the EU’s Common Commercial Policy. This alignment concerns both the autonomous regimes and preferential agreements with third countries. 

Article 16 of the Decision No. 1/95 of the Turkey – EC Association Council on implementing the final phase of the Customs Union provides that Turkey would, among the others, take the necessary measures and negotiate agreements on a mutually advantageous basis with the countries concerned.

Turkey, in line with the tendency in the world for negotiating FTAs and its Custom Union obligation, negotiates and concludes free trade agreements with third countries in parallel with the EU. Together with the EU Common Customs Tariff, the preferential trade regimes constitute the most important part of the trade policy applied towards third countries.

Changing environment in multilateral ground such as the stalemate in Doha and economic crisis, the EU decided to focus on bilateral trade agreements as a tool to boost growth with the introduction of its new trade strategy called “Global Europe” in 2006. In line with that strategy, to increase/maintain its competitiveness in the world markets, the EU started to negotiate FTAs with specific provisions on services, investment, public procurement, intellectual property rights. Turkey is preparing itself for such changing environment. Having initiated/launched negotiations parallel to the EU, Turkey also adapts itself to the wide range of topics covered in the Agreements and negotiates new generation FTAs with its prospective partners.

So far, Turkey has concluded FTAs with 36 countries, 11 of which were repealed due to the accession of these countries to the EU. Currently, Turkey has 20 FTAs in force[1]; namely,  EFTA, Israel, Macedonia, Bosnia-Herzegovina, Palestine, Tunisia, Morocco, Syria[2], Egypt, Albania, Georgia, Montenegro, Serbia, Chile, Mauritius, South Korea, Malaysia, Moldova, Faroe Islands and Singapore.

The FTAs signed with Lebanon, Kosovo, Sudan, Qatar and Venezuela are under ratification process.

Also, Turkey has been conducting negotiations to extend the scope of its existing FTAs with an aim to update and deepen their scope. To this extent, the negotiations with EFTA, Serbia, Bosnia and Herzegovina and Montenegro are concluded and the negotiations with Georgia and  Malaysia will be finalized in the near future.

Meanwhile, there are 17 countries/country blocs that Turkey has started FTA negotiations. Turkey has been actively engaged in negotiations with 9 of them; namely Japan, Ukraine, Peru, , Indonesia, Colombia, Ecuador, Mexico, Thailand, Pakistan, Turkey continues its efforts to speed up the process for our remaining ongoing FTA negotiations with Dem. Rep of Congo, Djibouti, Cameroon, Chad, Seychelles, Gulf Cooperation Council, Libya and MERCOSUR. Moreover, Turkey has launched initiatives to start negotiations with 8 countries/country blocs, which are the USA, Canada, India, Vietnam, Central American Countries, other ACP Countries, Algeria, and South Africa.

Lastly, Turkey has established a Working Group with the United Kingdom due to Brexit in order to sustain the current bilateral market access structure in the short term, and to establish a deep and comprehensive FTA in medium-long term.

[1] The FTA between Turkey and Jordan was repealed on 22 November 2018.

[2] The FTA between Turkey and Syria was suspended on 6 December 2011.