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U.S. Statement on the Trade Policy Review of Turkey
February 21, 2012

Delivered by Ambassador Michael Punke
U.S. Permanent Representative to the WTO
Geneva, February 21, 2012

Thank you, Chair.

The United States is pleased to welcome Deputy Undersecretary Cemalettin DAMLACI of Turkey’s Ministry of Economy, and his delegation for Turkey’s fifth Trade Policy Review (TPR).  We thank the WTO Secretariat and the Turkish Government for the informative reports provided to Members prior to this meeting.  We also thank the discussant, Ambassador István MAJOR, for his valuable contribution to this review.

During Turkey’s last TPR in 2007, the Chair noted that Turkey’s various programs of economic reform had succeeded in fostering impressive economic growth, while keeping inflation in check and reducing public and private debt burdens.  However, the Chair also highlighted a number of areas which needed further addressing in order to sustain economic growth, including the need to liberalize further Turkey’s investment regime.  The Chair also noted the concerns expressed by a number of Members regarding remaining restrictions, including a high level of tariff protection in Turkey’s agricultural sector.

Today we are pleased to have the chance to review developments since the 2007 TPR and to discuss Turkey’s recent economic performance.

Economic growth has been impressive since the previous review, providing evidence of the success of the government’s reform efforts.  Despite the downturn Turkey shared with much of the world in 2008-09, real GDP growth rebounded to 9 percent in 2010 and was 7.5 percent in 2011.  The IMF forecasts 2 percent growth in 2012.  Since 2001, the Secretariat advises that Turkey has been successful in driving down annual consumer price inflation from 29.7 percent in 2002 to 10 percent or less since 2004.  One key change in Turkey’s trade and investment posture noted in the Secretariat’s report is the relative decline in the EU’s share of Turkey’s total trade and investment since 2007, and concurrent pronounced shift in Turkey’s commercial engagement toward neighboring countries in the Middle East and North Africa, Central Asian and Asian regions.

Our 2010 data demonstrate how important bilateral trade and investment are to both of our economies.  Turkey in 2010 was our 35th largest goods trading partner with $14.8 billion in total (i.e., two-way) trade.  U.S. goods exports to Turkey were $10.5 billion and our imports from Turkey totaled $4.2 billion.  The United States has continued to support Turkey’s efforts to boost economic growth through increased goods exports, providing duty free benefits under the U.S. Generalized System of Preferences.

The United States is a significant investor in Turkey, with the stock of U.S. foreign direct investment valued at about $5.7 billion in 2010.  Our mutual trade and investment have generated increased employment opportunities in both countries.

Despite the positive aspects of the record described in the Secretariat’s report, there are areas where we believe Turkey could make further improvements.  Continuing to make progress by eliminating trade restrictions and increasing transparency would benefit Turkey’s economy by increasing efficiency and raising productivity to support sustained economic growth.  We urge Turkey to redouble its efforts to open its market, particularly in agriculture, including in the area of biotechnology, and to ensure world-class intellectual property protection – all of this would greatly increase the competitiveness of the Turkish economy.

The United States notes continued concerns with aspects of Turkey’s customs regime, particularly ongoing problems with certain customs regulations, procedures, and valuation methods.  Similarly, some of Turkey’s import licensing practices as well as technical and food safety regulations are troubling.  We would like, therefore, to urge Turkey to examine closely its measures and practices to ensure that they are in line with Turkey’s WTO commitments, including the Customs Valuation and Import Licensing, Sanitary and Phytosanitary, and Technical Barriers to Trade Agreements.  In addition, we urge Turkey to take the necessary steps to ensure prompt and full notification to WTO members of its new and modified TBT and SPS measures.  We also urge Turkey to submit overdue Committee on Agriculture notifications, especially those relating to domestic support, which according to the Secretariat’s report, has experienced increasing levels during the period of review.  The United States stands ready to work with Turkey to address these concerns.

We take this opportunity to recognize Turkey for its continued efforts to strengthen intellectual property protection.  Nonetheless, we observe that significant problems remain.  While the Secretariat’s report highlights continued constructive steps taken by Turkey in the area of intellectual property rights enforcement, we believe that further comprehensive, coordinated and sustained efforts in this area are necessary to establish an adequate level of intellectual property protection in Turkey.  We would be interested in an update on any legislative, judicial or enforcement steps the Turkish government anticipates in this area.

The large share of foreign direct investment in Turkey’s services sectors demonstrates the growing importance of these sectors to Turkey’s economic well-being.  For the benefit of Turkey’s economic growth prospects, we continue to urge the Turkish government to eliminate remaining services barriers including in the financial services, telecommunications, and energy sectors.

The United States welcomes Turkey’s continued support and commitment to the WTO’s work and to trade liberalization through the rules-based multilateral trading system.  We appreciate that Turkey has long been an observer to the WTO Committee on Government Procurement (since 1996).  Since the revision of the Government Procurement Agreement (GPA) agreed upon at the WTO Ministerial in December 2011 will facilitate accession to the GPA, we strongly encourage Turkey to commence accession to the GPA as soon as possible.

We appreciated Turkey’s comments today concerning the interplay between its bilateral and multilateral activities.  We note that Turkey, like most WTO Members, is pursuing its trade liberalization interests in multiple fora.

The United States appreciates the opportunity to participate in this review and provide observations.  We look forward to continuing our work with Turkey and our trading partners to strengthen the global economy and the multilateral trading system embodied by the WTO, allowing trade and investment opportunities to expand.

Thank you and we offer best wishes to Turkey for a successful TPR.