Trade remedies under Turkish law - Asser

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Trade remedies under Turkish law

Müslüm Yilmaz

clee10-4om.p65 2/22/10, 11:53 PM1

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CENTRE FOR THE LAW OF EU EXTERNAL RELATIONS


TRADE REMEDIES UNDER TURKISH LAW

MÜSLÜM YILMAZ*

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CLEER WORKING PAPERS 2010/4 Yilmaz

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* Dr. Müslüm Yilmaz is Counsellor at the World Trade Organization Secretariat, Rules Division(e-mail: [email protected]). Previously, he worked as investigator at the Turkish Anti-Dumping and Subsidy Investigations Department. The views expressed in this paper are theauthor’s and do not represent, in any way, the official views of the WTO Secretariat or itsMembers. The author would like to thank Jesse Kreier for his helpful comments.

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1. INTRODUCTION

This working paper analyses Turkey’s trade remedies legislation and the imple-mentation thereof. Turkey being a Member of the World Trade Organization (WTO),the paper takes a comparative approach and highlights areas where Turkey’s do-mestic trade remedies legislation may be interpreted as not being consistent withthe WTO rules. It also identifies aspects of the legislation that have been trans-posed from EU law. The paper starts with a brief introduction to trade remedies ingeneral (section 2). Section 3 analyses Turkey’s trade remedies legislation andsection 4 looks into the implementation thereof. Section 5 discusses trade rem-edies in the context of the customs union between Turkey and the European Union.1The paper will be wrapped up with some concluding remarks.

2. TRADE REMEDIES

In international trade parlance, ‘trade remedies’ refer to three types of measures:anti-dumping, countervailing and safeguard measures. Trade remedies were firstsubjected to multilateral disciplines through the General Agreement on Tariffs andTrade (GATT), signed in 1947. Article VI of GATT 1947 laid down the rules thatapplied to anti-dumping and countervailing measures whereas Article XIX dealtwith safeguards.

Eight rounds of trade negotiations were conducted under the auspices of GATT1947.2 In the Uruguay Round of trade negotiations, the last of the eight, GATTContracting Parties agreed to establish the World Trade Organization as an institu-tion to oversee the implementation of international trade rules and provide a fo-rum for future negotiations.

The Agreement Establishing the WTO has in its attachments 13 multilateralagreements on trade in goods, each addressing a different aspect of internationaltrade. Of these agreements, three deal with trade remedies: the Agreement on theImplementation of Article VI of GATT 1994 (hereinafter: the AD Agreement), theAgreement on Subsidies and Countervailing Measures (hereinafter: the SCM Agree-ment) and the Agreement on Safeguards (hereinafter: the SG Agreement). Each ofthese agreements lays down the disciplines that apply to the investigations con-ducted with a view to imposing the relevant trade remedy measure. Articles VI

1 With the entry into force of the Lisbon Treaty, the ‘European Community’ (EC) has disappearedtogether with the ‘3-Pillar’ structure of the EU. There is thus potential confusion in historicalaccounts of EC and EU policy making, for some of the terms used have no meaning in the post-Lisbon framework. In this working paper, where it is relevant to do so, the terms are employedas legally valid at the time of their usage.

2 The eight GATT rounds are: Geneva (1947), Annecy (1949), Torquay (1950), Geneva (1956),Dillon (1960-61), Kennedy (1962-67), Tokyo (1973-79) and Uruguay (1986-94). For furtherinformation, see <http://www.wto.org/english/thewto_e/whatis_e/tif_e/fact4_e.htm#rounds>.

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and XIX of what is now called the ‘GATT 1994’3 also continue to apply to anti-dumping, countervailing duties (CVD) and safeguard investigations.

Anti-dumping is the most frequently used trade remedy measure. Broadly speak-ing, dumping occurs when a product is exported to a third country at a price lowerthan the price at which the exporter sells the same product in his home market. Inthis sense, dumping constitutes price discrimination between two national mar-kets.4 In order to be able to impose an anti-dumping duty, the investigating au-thorities in the importing country have to demonstrate that dumped imports arecausing injury to the domestic producers producing the like product. Anti-dump-ing measures are intended to counteract such injury. The AD Agreement subjectsthe application of anti-dumping measures to strict disciplines, both substantivelyand procedurally.

Countervailing measures constitute the second type of trade remedy measures.These measures aim at offsetting injury caused by imports benefiting from certaintypes of subsidies provided by the governments of exporting countries. Under theSCM Agreement, a subsidy is a financial contribution by a government whichconfers a benefit upon the recipient. Only specific5 subsidies can be countervailedthrough an investigation. For the imposition of a countervailing measure, the in-vestigating authorities of the importing country have to show that subsidized im-ports are causing injury to the domestic industry producing the subject product inthe importing country. The SCM Agreement contains many rules that WTO Mem-bers have to follow when conducting CVD investigations.

Safeguards are the third type of trade remedy measures. For the imposition of asafeguard measure, the importing country has to show that as a result of unfore-

3 The original treaty that was signed in 1947 and remained in force until 1995 is called the ‘GATT1947’. With the conclusion of the Uruguay Round and the enactment of the WTO Agreement,the provisions of the GATT 1947, together with some other decisions and undertakings, werecarried into what is now called the ‘GATT 1994’, which is one of the multilateral agreementsannexed to the WTO Agreement. In other words, the GATT 1994 contains all of the provisionsof the GATT 1947 and is attached to the WTO Agreement under a different name. The GATT1947 continues to be a treaty legally distinct from the GATT 1994 (WTO Agreement, Art. II.4).See M. Yilmaz, ‘Dispute Settlement at the World Trade Organization’, in N. Eksi, P. Martinez-Fraga and W.K. Sheehy (eds.), International Commercial Arbitration: A Comparative Survey(Istanbul, Chamber of Commerce 2007), at 361. Since GATT 1994 is one of the multilateralagreements attached to the WTO Agreement, its provisions apply cumulatively with those of theAD, SCM and SG Agreements in the context of anti-dumping, countervailing duty and safe-guard investigations, respectively. In Korea – Dairy, the Appellate Body confirmed this in con-nection with safeguard investigations. It reasoned that the conditions set out under Article XIXof GATT 1994 apply to safeguard investigations cumulatively with the conditions contained inthe SG Agreement. Appellate Body Report, Korea – Definitive Safeguard Measure on Importsof Certain Dairy Products (‘Korea – Dairy’), WT/DS98/AB/R, adopted 12 January 2000,DSR 2000:I, 3, para. 75.

4 See J. Viner, Dumping A Problem In International Trade (New York, Augustus M. Kelley 1923,reprint 1990), at 3.

5 Under Article 2 of the SCM Agreement, subsidies granted to certain enterprises, certain indus-tries, certain regions within the territory of the granting authorities as well as prohibited subsi-dies are considered to be specific.

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seen developments and the importing country’s GATT/WTO obligations6 , therehas been an increase in the volume of imports of a product which causes or threat-ens to cause serious injury to the domestic industry producing like or directlycompetitive products. Safeguards differ from anti-dumping and countervailingmeasures in certain regards. Some of these differences are explained below.

First, unlike anti-dumping and countervailing measures, safeguards are not trig-gered by an unfair practice.7 The practice of dumping in the case of an anti-dump-ing investigation and subsidization by a foreign government in the case of a CVDinvestigation, are considered to be unfair practices. Safeguards, however, are trig-gered by an increase in the volume of imports of the subject product, which doesnot constitute an unfair practice. Second, WTO Members imposing safeguardmeasures are required to provide a trade concession to compensate the trade dis-torting effect of the safeguard measures. Third, unlike anti-dumping andcountervailing measures which are country-specific (and often also exporter-spe-cific) safeguard investigations have to be initiated, and the resulting safeguardmeasures have to be imposed, on the basis of the Most Favoured Nation (MFN)principle. Fourth, the injury standard for the imposition of a safeguard measure ishigher compared with that for anti-dumping and countervailing measures. Investi-gating authorities of the importing country have to show serious injury or threatthereof to be able to impose a safeguard measure whereas imposition of an anti-dumping or countervailing measure requires a demonstration of material injury orthreat thereof caused by dumped or subsidized imports.8 Fifth, the like product

6 The requirement that the increase in the volume of imports should take place as a result ofunforeseen developments and the importing WTO Member’s GATT/WTO obligations stemsfrom Article XIX of GATT 1994.

7 Because safeguard investigations, unlike anti-dumping and CVD investigations, are not trig-gered by an unfair practice, the imposition of a safeguard measure is subjected to more stringentrequirements compared with the conditions that apply to the imposition of anti-dumping andcountervailing measures. See J. Jackson, The World Trading System Law and Policy of Interna-tional Economic Relations (Cambridge MA, MIT Press 1997), at 177-178; S. Lee, ‘SafeguardMeasures: Why Are They Not Applied Consistently With the Rules?’, 36 Journal of WorldTrade (2002), at 642; E. Hizon, ‘The Safeguard Measure/VER Dilemma: The Jekyll and Hydeof Trade Protection’, 15 Northwestern Journal of International Law and Business (1994), at105; P. Messerlin and H. Fridh, ‘The Agreement on Safeguards: Proposals for Change in theLight of the EC Steel Safeguards’, 40 Journal of World Trade (2006), at 714; P. Rodriguez,‘Safeguards in the World Trade Organization Ten Years After: A Dissociated State of the Law?’,41 Journal of World Trade (2007), at 160; E. Vermulst, M. Pernaute, K. Lucenti, ‘Recent Euro-pean Community Safeguards Policy: “Kill Them All and Let God Sort Them Out”?’, 38 Journalof World Trade (2004), at 955; R. Bhala, International Trade Law Cases and Materials(Charlottesville, Michie Law 1996), at 599. This characteristic of safeguard measures has alsobeen underlined by the WTO’s Appellate Body. See Appellate Body Report, Korea – DefinitiveSafeguard Measure on Imports of Certain Dairy Products (‘Korea – Dairy’), WT/DS98/AB/R,adopted 12 January 2000, DSR 2000:I, 3, para. 87.

8 The third type of injury that the AD and SCM Agreements cite is ‘material retardation of theestablishment of an industry’ but the Agreements do not shed much light on the exact nature ofthis type of injury (footnote 9 of the AD Agreement and footnote 45 of the SCM Agreement). Tothe best of the author’s knowledge, no WTO Member has so far relied on ‘material retardationof the establishment of an industry’ as a basis for injury determinations in anti-dumping andCVD investigations.

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definition that applies to safeguard investigations is different from that which ap-plies in anti-dumping and CVD investigations. Anti-dumping and CVD investiga-tions aim at offsetting injury caused to producers producing the like product in theimporting country whereas safeguard investigations may be initiated to counteractserious injury suffered by producers producing like or directly competitive prod-ucts. As such, the product scope of a safeguard investigation may be considerablywider than that of an anti-dumping and CVD investigation.

3. TURKEY’S TRADE REMEDIES LEGISLATION

Turkey applied a rather protectionist trade policy until early 1980s. In 1980s, thecountry went through significant trade liberalization. In 1987, Turkey submittedits application for full membership to the EEC, which was rejected in 1990.9 In1995, the EEC-Turkey Association Council signed its decision No. 1/95 establish-ing a customs union between the two parties.10 The customs union brought aboutfurther cuts in Turkey’s tariffs.11

Because of the protectionist policies followed until the 1980s, the need for theuse of trade remedies was not felt in an important way. High tariffs shielded do-mestic industries from the competition of foreign producers. Following the tradeliberalization of 1980s, however, it became clear that the government needed touse trade remedies in order to protect the domestic industries from the unexpectedconsequences of the new competitive environment.

To this end, the Law on the Prevention of Unfair Competition in Imports (here-inafter: AD/CVD Law) was passed in 1989. This was followed by the Decree onthe Prevention of Unfair Competition in Imports (hereinafter: AD/CVD Decree)and the Regulation on the Prevention of Unfair Competition in Imports (hereinaf-ter: AD/CVD Regulation’). The AD/CVD Legislation12 consisting of these threelegislative instruments laid down the rules for anti-dumping and CVD investiga-tions but did not address safeguards. The AD/CVD Legislation remained in forcefor ten years with no changes. In 1999, the whole AD/CVD Legislation underwentsignificant amendments with a view to incorporating the new provisions of theAD and SCM Agreements signed in the Uruguay Round. In this context, the Lawwas amended13 whereas the Decree and the Regulation were repealed and re-

9 See S. Togan,’ Turkey: Toward EU Accession’, 27 The World Economy (2004), at 1013.10 Association Council Decision 1/95 (Customs Union), OJ 1996 L 35/1.11 See F. Nilufer, ‘Turkey-EU Customs Union: As a Complementary Element for Promoting the

Objectives of Multilateral Trading System’, available at: <http://www.dtm.gov.tr/dtmweb/yaziciDostu.cfm?dokuman=pdf&action=detayrk&yayinID=1670&icerikID=1807&dil=TR>, at3-4.

12 For ease of reference, in this paper, we refer to the AD/CVD Law, Decree and Regulationcumulatively as the AD/CVD Legislation, and to the SG Decree and Regulation altogether asthe SG Legislation.

13 Law No. 4412, Official Gazette of Turkey, 25.7.1999, No. 23766.

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placed by new texts.14 Setting aside a few relatively minor amendments subse-quently made, the AD/CVD Legislation as amended in 1999 is still in force.

As for safeguards, the first initiative for the regulation of this trade remedyinstrument came with the introduction in 1995 of the Decree on Surveillance andSafeguard Measures and the Administration and Tariff Rate Quotas in Imports15

and the Regulation on Surveillance and Safeguard Measures in Imports16 . Thecited Decree and the Regulation were repealed in 2004 and the new Decree onSafeguard Measures in Imports17 (hereinafter: SG Decree) and the new Regula-tion on Safeguard Measures in Imports18 (hereinafter: SG Regulation) were intro-duced. The SG Legislation enacted in 2004 is still in force.

In addition to the above-mentioned domestic legislation, the AD, SCM and SGAgreements also constitute part of the Turkish trade remedies law. Article 90 ofthe Turkish Constitution provides that duly ratified international treaties gain theforce of law under Turkish law. Further, it stipulates that such treaties cannot bechallenged on constitutional grounds before the Constitutional Court.19 As such,the Constitution places duly approved international treaties in a privileged posi-tion compared with domestic laws. The approval of the WTO Agreement wasauthorized by the Law No. 4067 dated 26.1.199520 and was subsequently materi-alized through the Decree No. 95/6525 dated 3.2.1995.21 Therefore, the WTOAgreement, including its annexes such as the AD, SCM and SG Agreements, hasthe force of law under Turkish law. The legal significance of this is that these threeAgreements are parts of the Turkish trade remedies law. They are binding legaltexts for the Turkish authorities conducting trade remedy investigations. Similarly,Turkish courts have to give due consideration to these treaties in legal proceedingsinitiated against the actions of Turkish investigating authorities.

The hybrid character of the sources of trade remedies law in Turkey raisescertain questions with regard to both the form and the substance of that law, whichmerit discussion. Below, first the question is discussed whether Turkey needs do-mestic legislation on trade remedies. It is shown that it does. Then, issues pertain-ing to the form and the substance of Turkey’s domestic legislation are analysed.

14 Decree No. 99/13482 on the Prevention of Unfair Competition in Imports and the Regulation onthe Prevention of Unfair Competition in Imports, Official Gazette of Turkey, 30.10.1999, No.23861.

15 Official Gazette of Turkey, 1.6.1995, No. bis 22300. This Decree was amended by the subse-quent Decree No. 95/7432 (Official Gazette of Turkey, 1.11.1995, No. 22450).

16 Official Gazette of Turkey, 1.6.1995, No. bis 22300. This Regulation was amended in 1995(Official Gazette of Turkey, 1.11.1995, No. 22450).

17 Official Gazette of Turkey, 29.5.2004, No. 25476.18 Official Gazette of Turkey, 8.6.2004, No. 25486.19 Pursuant to Article 148 of the Constitution, laws passed in the Parliament may be challenged

before the Constitutional Court on constitutional grounds.20 Official Gazette of Turkey, 29.1.1995, No. 22186.21 Official Gazette of Turkey, 25.2.1995, No. bis 22213.

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3.1. Does Turkey need domestic legislation on trade remedies?

Given that the AD, SCM and SG Agreements have the force of law in Turkey, whyis it that Turkey also enacted domestic legislation on the same issues? As a WTOMember, was Turkey required to have domestic legislation on trade remedies inaddition to the cited three Agreements?

Strictly speaking, none of these Agreements require WTO Members to havedomestic legislation on trade remedies. The only obligation imposed on WTOMembers is to observe the disciplines contained in these Agreements in the con-duct of trade remedy investigations. In practice, however, a Member would al-ways need some sort of domestic legislation in order to be able to carry out traderemedy investigations. The AD, SCM and SG Agreements set out the rules thatapply to these investigations. They do not, and can not, however, provide the pro-cedural framework within which such investigations are to be conducted. In orderto have an operational investigation system, WTO Members need to have domes-tic legislation explaining, among others, which governmental entity will conductthe investigations, what will be the decision-making mechanism for the initiationof investigations and the imposition of measures, and what kind of judicial reviewwill be available at the national level against the determinations of the investigat-ing authorities. Each WTO Member regulates these issues taking into consider-ation the requirements of its legal system. As a result, WTO Members have differentrules and mechanisms on issues that are not addressed in the AD, SCM and SGAgreements.

In addition to these procedural issues, a Member wishing to conduct trade rem-edy investigations would also need to include in its national legislation certainsubstantive provisions which either do not appear in the relevant WTO agreementor with respect to which WTO Members have to choose one of the options pro-vided for in that agreement. For example, Article 9.1 of the AD Agreement pro-vides that it is desirable that WTO Members conducting anti-dumping investigationsimpose the anti-dumping duty at a rate lesser than the margin of dumping calcu-lated in the underlying investigation if such lesser duty would suffice to removethe injury suffered by the domestic industry. The same principle is contained inArticle 19.2 of the SCM Agreement with respect to countervailing duties. A WTOMember wishing to apply this principle in its trade remedy system has to indicateit in its domestic legislation. Another example concerns the form of safeguardmeasures. The SG Agreement does not specify which form safeguard measuresmay take. Each WTO Member has to specify this in its domestic legislation. Ruleson subsidy calculations in CVD investigations provide another example of suchsubstantive issues. Article 14 of the SCM Agreement stipulates that WTO Mem-bers should explain in their legislation rules that apply to the calculation of thebenefit to the recipient in a CVD investigation. It also provides a list of guidelineswhich Members have to follow in such calculations. Article 14 is far from eluci-dating the full range of rules that a Member would need in the calculation of theamount of subsidy in an investigation. Hence, it is for each Member to formulatesuch rules and incorporate them in its domestic legislation.

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The examples above concern areas where the national law of a Member wouldhave to contain certain substantive provisions not found in the relevant agree-ment. The AD, SCM and SG Agreements contain more examples of this kind.Furthermore, sources other than these three trade remedy agreements may alsohave similar requirements. A well-known example of this is China’s Protocol ofAccession to the WTO.22 Paragraph 15 of this document, albeit indirectly, re-quires WTO Members to indicate in their domestic legislation any methodologythat they use in connection with dumping and subsidy determinations in anti-dump-ing and CVD investigations against Chinese exporters.

Whether domestic legislation should go beyond the procedural and substantiveissues highlighted above and also address issues that are already clearly addressedin the AD, SCM and SG Agreements depends on the legal system of the relevantWTO Member. Specifically, this depends on the status the WTO Agreement underthe national law of that Member. WTO Members that have dualist legal systemswhere international treaties do not automatically become part of the national lawwill have to enact domestic legislation addressing all aspects of trade remedy in-vestigations. Members, such as Turkey, that have monist legal systems, however,do not need to incorporate in their domestic legislation every provision of a dulyratified international treaty since the latter automatically becomes part of the na-tional legal system.23 In such jurisdictions, it would suffice if the domestic legisla-tion provides for a procedural framework that would render the treaty operationaland address substantive issues that are not fully addressed in the treaty.

Having been ratified in the Parliament, the WTO Agreement has the force oflaw under Turkish law. Therefore, there is, in principle, no need for Turkey torestate in its domestic legislation every provision of the AD, SCM and SG Agree-ments. However, as explained above, Turkey does need some domestic legislationto lay down the necessary procedural rules in order to operationalize these agree-ments and to address substantive issues which are not fully addressed in the men-tioned agreements.

Below, certain issues are discussed in relation to the form and substance ofTurkey’s trade remedies legislation.

3.2. The form of the domestic trade remedies legislation

As noted above, Turkey’s AD/CVD Legislation consists of a law, a decree and aregulation whereas its SG Legislation consists of a decree and a regulation. It is,however, not clear why these two pieces of legislation contain multiple types oflegislative instruments. Is there a norm or principle under Turkish law which re-quires that the AD/CVD Legislation contain a law, a decree and a regulation and

22 WTO document WT/L/432 dated 23.11.2001.23 For explanations on the differences between monist and dualist legal systems, see I. Brownlie,

Principles of Public International Law, 5th Ed. (Oxford, OUP 1998), at 31-33; R. Jennings andS. Watts, Oppenheim’s International Law, 9th Ed., Vol.1 (Dordrecht, Nijhoff Publishers 1996),at 53-56.

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that the SG Legislation contain a decree and a regulation? It is the author’s viewthat, for the reasons explained below, Turkish law does not require a law or adecree as part of the country’s trade remedies legislation.

3.2.1. Does Turkish law require a law as part of the domestic traderemedies legislation?

The issue of whether Turkish law requires a law as part of the trade remedieslegislation only applies to the AD/CVD Legislation since the SG Legislation doesnot contain a law. Under Turkish law, in principle, it is for the government tochoose the appropriate type of legislative instrument to regulate a certain issue.Exceptionally, the Constitution may require a specific form for the regulation ofcertain matters. A well-known example of this pertains to taxation. Article 73.3 ofthe Constitution stipulates that the imposition, modification and termination oftaxes can only be achieved through a law. Given this constitutional requirement,any tax imposed through another instrument, such as a regulation, would be un-constitutional. Similarly, Article 161.2 of the Constitution provides that thegovernment’s budget can only be approved through a law. Furthermore, Article161.4 stipulates that the budget law cannot address any issue other than budget. Itis clear that any legislation that conflicts with these principles would be unconsti-tutional. However, it should be underlined that these are exceptions to the prin-ciple.

Turning to trade remedies, there is no constitutional provision that requires thegovernment to regulate this area through a law. However, the choice of words inthe AD/CVD Legislation creates confusion as to the legal nature of anti-dumpingand countervailing duties. The legislation uses the word ‘vergi’ in Turkish to referto anti-dumping and countervailing duties. The ordinary meaning of ‘vergi’ in theTurkish language corresponds to what is ‘tax’ in English and ‘impôt’ in French.The word used in the AD Agreement for anti-dumping duties is ‘duty’ in the En-glish text and ‘droit’ in the French text. Similarly, the English and French texts ofthe SCM Agreement use the words ‘duty’ and ‘droit’, respectively, in connectionwith countervailing duties.

Arguably, it is erroneous to refer to anti-dumping and countervailing duties as‘vergi’ in the Turkish Legislation because these duties do not constitute ‘tax’ forpurposes of Turkish law. ‘Vergi’ should be replaced by an appropriate word inorder to eliminate this confusion. In this regard, ’damping kesintisi’ or ‘dampingkarþýlýðý’ should be used instead of ‘dampinge karþý vergi’ for anti-dumping dutiesand ‘sübvansiyon kesintisi’ or ‘sübvansiyon karþýlýðý’ instead of ‘telafi edici vergi’for countervailing duties. The argument here is not that it is the words used in thelegislation that determine the legal nature of anti-dumping and countervailing du-ties. However, the word ‘tax’ should be replaced by a more suitable word in orderto eliminate this confusion that arises at first glance.

This confusion has also arisen in the context of judicial review of anti-dumpingduties in Turkey. In the judicial review proceedings concerning anti-dumping du-ties on cotton yarn originating in Pakistan, the complainant argued that anti-dumping

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duties constituted ‘tax’ within the meaning of Article 73 of the Constitution. Itwould follow from this argument that anti-dumping duties could only be imposedthrough a law.24

Under the Turkish legislation, decision-making in anti-dumping and CVD in-vestigations is shared among the Undersecretariat for Foreign Trade (‘UFT’) Di-rectorate-General for Imports, the Board on the Evaluation of Unfair Competitionin Imports and the Minister in charge of the UFT. The decision to impose an anti-dumping or countervailing duty is made by the Board which then has to be ap-proved by the Minister. After approval by the Minister, the duty becomes effective.25

Since Article 73 of the Constitution stipulates that taxes can only be imposedthrough a law, the complainant in the cotton yarn proceeding argued that anti-dumping and countervailing duties imposed under the decision-making processprovided for in the AD/CVD Legislation were unconstitutional.

The Council of State rejected the argument that the AD/CVD Legislation vio-lated the principle laid down in Article 73 of the Constitution by allowing theimposition of anti-dumping and countervailing duties by the Executive. Drawingguidance from an earlier Constitutional Court decision, the Council of State rea-soned that what Article 73 of the Constitution requires is that the main principlesregarding taxes be set out in a law in order to preclude arbitrary implementation bythe Executive. As long as this is done, the Executive can have some flexibilitywith respect to taxation. Turning to the AD/CVD Law, the Court observed that themain concepts regarding the calculation of the margin of dumping or amount ofsubsidy were defined in the Law and that the determinations of investigating au-thorities could not run counter to these principles. The Court therefore rejected theunconstitutionality argument against the Law.26

The decision of the Council of State shows that even assuming that anti-dump-ing and countervailing duties constitute ‘tax’ within the meaning of Article 73 ofthe Constitution, the decision-making process provided for in the AD/CVD Legis-lation satisfies the requirements of Article 73 because the AD/CVD Law identifiesthe main elements that establish the basis for the anti-dumping and countervailingduty to be imposed and that the Executive is not allowed to act in an arbitrarymanner with respect to the imposition of these duties.

Arguably, the constitutional basis for anti-dumping and countervailing duties isnot Article 73 of the Constitution. These duties find their basis in Article 167 ofthe Constitution. Article 167.1 provides:

‘The state shall take the measures necessary for the proper functioning of money,credit, capital, goods and services markets; it shall preclude de facto or contractualestablishment of monopolies and cartels in markets.’

24 To the best of the author’s knowledge, the issue of whether anti-dumping duties constitute ‘tax’within the meaning of Article 73 of the Constitution has not yet been discussed by the Council ofState. In a sense, it has been taken as granted that anti-dumping duties do constitute ‘tax’.

25 Article 7.1 of AD/CVD Law.26 Council of State Decision, 7th Chamber, 24.1.1995, E.1993/5131 – K.1995/121, available at:

<http://www.kazanci.com.tr>.

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This provision stipulates that the state has to take measures necessary to ensure,among others, proper functioning of goods and services markets. Anti-dumpingand countervailing duties can best be described as measures aimed at proper func-tioning of goods markets. Unlike taxes, these duties do not aim at generating rev-enue for traditional governmental expenditures. The revenue collected fromanti-dumping and countervailing duties only constitutes a fraction of governmen-tal revenues. These duties serve to counteract injury caused by dumped or subsi-dized imports on the domestic producers producing the like product in Turkey.The aim of trade remedies legislation is to allow domestic producers affected bydumped or subsidized imports to have some breathing space to recover and therebyto ensure level playing field in the market. Article 167.1 of the Constitution, whichconstitutes the constitutional basis for anti-dumping and countervailing duties,does not require a specific type of legislative instrument to ensure the proper func-tioning of goods markets. Therefore, there is no obligation to include a law inTurkey’s trade remedies legislation.

This shows that the AD/CVD Legislation can well consist of administrativelegislative instruments such as a decree or a regulation. Taking this into consider-ation, it would have been better to limit the AD/CVD Legislation to such adminis-trative instruments which would have given more flexibility to the government. Itis much more difficult to amend a law compared with a decree or a regulation. It isnot surprising that it took four years for Turkey to amend its AD/CVD Law inorder to incorporate the new rules that were agreed to in the Uruguay Round oftrade negotiations. Had the legislation consisted of administrative legislative in-struments only, such amendment could have been achieved within months sinceadministrative changes would not have required parliamentary approval.

3.2.2. Does Turkish law require a decree as part of the domestic traderemedies legislation?

Having shown that Turkish law does not require a law as part of the country’strade remedies legislation, and that some administrative legislation would suffice,the discussion now turns to what form that administrative legislation should take.Specifically, an assessment should be made of the need for a decree in addition toa regulation. This question applies to the AD/CVD and the SG Legislation alikebecause they both contain a decree and a regulation.

The general principles of Turkish law contain no requirement that trade rem-edies legislation should take the form of a decree. The only such requirement isfound in Articles 7.2, 12 and 13.1 of the AD/CVD Law which stipulate that certainissues relating to anti-dumping and countervailing duties should be addressed in adecree. These issues are the retroactive collection of anti-dumping and counter-vailing duties (Law Article 7.2), the principles regarding the imposition and col-lection of provisional measures (Law Article 12) and those regarding the duration,suspension, review, refund and circumvention of final measures (Law Article 13.1).

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As was explained above, there is no constitutional requirement to have a do-mestic law on trade remedies in Turkey. The obligation created in Articles 7.2, 12and 13.1 of the AD/CVD Law does not arise from a general requirement of Turk-ish law that such issues have to be addressed in a decree. These provisions, there-fore, do not change the fact that Turkish law does not require the inclusion of adecree in the trade remedies legislation.

In fact, a careful analysis of the AD/CVD Decree reveals that there is consider-able overlap between the provisions of the AD/CVD Law and the AD/CVD De-cree. Examples of such repetition are provisions pertaining to the application forthe initiation of an investigation (Law Article 4.1 and Decree Article 3.1), theinitiation of an investigation (Law Article 10.1 and Decree Article 3.2), main defi-nitions (Law Article 2 and Decree Article 2), circumstances justifying the imposi-tion of definitive measures (Law Article 3.1 and Decree Article 4.1), imposition ofprovisional measures (Law Article 12.1 and Decree Article 4.2) and acceptance ofundertakings (Law Article 11 and Decree Article 4.3).

Similarly, some provisions of the AD/CVD Decree overlap with those of theAD/CVD Regulation. These include Article 7 of the Decree and Articles 34 and35 of the Regulation regarding changed circumstances and sunset reviews of anti-dumping and countervailing measures and Article 8 of the Decree and Article 36of the Regulation regarding newcomer’s reviews.

In addition, there are some discrepancies between the AD/CVD Law and theAD/CVD Decree which have no apparent justification. For instance, Article 2 ofthe Law, which is the definitional provision, provides a definition of the Anti-Dumping Agreement but the corresponding Article 2 of the Decree does not. Bycontrast, the definition of circumvention of anti-dumping and countervailing mea-sures is provided in Article 2 of the Decree but not in Article 2 of the Law. Thesedifferences are the products of poor drafting and have no explanation.

This legislative structure is far from ideal and lacks a proper justification.As noted above, there is no need for a law nor a decree as part of Turkey’s AD/

CVD Legislation. It would therefore be better that the AD/CVD Law and the AD/CVD Decree were repealed and all the rules relative to anti-dumping and CVDinvestigations were reflected in the AD/CVD Regulation. The Regulation wouldsupplement the Anti-Dumping Agreement which has the force of law. If the needarises to amend the AD/CVD Legislation, this could be achieved by changing therelevant provisions of the Regulation. This would give the authorities more flex-ibility since amending a regulation can be achieved by ministerial approval whereaschanging the law would require parliamentary approval and changing a decreewould require a decision by the Council of Ministers.

Turning to the SG Legislation, it is good to recall that it consists of the SGDecree and the SG Regulation. There is no law on safeguards. With regard tosafeguards, the relevant legal question is whether there is a need to have a decreeor, rather, whether a regulation would provide an adequate legal framework forthe regulation of this area. As in the case of anti-dumping and CVD investigations,in the author’s view, Turkish law contains no requirement that safeguard investi-

14


gations be regulated through a decree. Therefore, here too it is suggested that theSG Decree be repealed and that the rules pertaining to safeguard investigations becontained in the SG Regulation.

As with regard to the AD/CVD Legislation, the SG Decree and the SG Regula-tion contain repetitive provisions as well as a number of discrepancies. For in-stance, Article 5 of the Decree and Article 9 of the Regulation on provisionalmeasures are identical. So are Article 6 of the Decree and the first two paragraphsof Article 10 of the Regulation addressing definitive safeguard measures. Article 2of the Decree and Article 2 of the Regulation both contain definitions of conceptsrelevant to safeguard investigations most of which are repetitive. Furthermore, theSG Decree does not contain the definition of ‘quota’ and ‘interested parties’ whichthe SG Regulation does. There is no explanation for such discrepancies. They aresimply the result of poor drafting.

3.2.3. Conclusion on the form of the domestic trade remedieslegislation

The AD, SCM and SG Agreements have the force of law in Turkey. There is,therefore, no need to have a domestic law on trade remedies. Turkey, however,needs some domestic legislation in order to operationalize these Agreements. Suchdomestic legislation should consist of administrative legislative instruments. Interms of administrative legislative instruments, a regulation would suffice to supple-ment the relevant agreement. There is no need to have a decree in addition to aregulation as Turkish law does not contain such a requirement.

In principle, any administration would be expected to adopt the type of legisla-tive instrument needed to regulate a given area on the basis of the requirements ofits legal system. In the absence of a legal requirement for a particular type oflegislative instrument, it would be advisable to opt for the instrument that wouldbe easier to put in place and to amend when the need arises. In this regard, Turkey’strade remedies legislation is not based on an optimal selection of legislative in-struments. It contains a law and two decrees even though there is no legal require-ment to lay down the rules on trade remedies through a law or a decree.

The ongoing Doha Round of trade negotiations may lead to a change in the ADand SCM Agreements. In such a case, Turkey would have to approve the newAgreements through the process set out under Article 90 of the Constitution. Whenthis occurs, the opportunity ought to be seized to optimize the structure of Turkey’strade remedies legislation. To this end, the AD/CVD Law as well as the AD/CVDand SG Decrees should be repealed. The new legislation should consist of the newAD, CVD and SG Agreements supplemented by three regulations.

As explained above, anti-dumping and countervailing duties do not constitute‘tax’ under Turkish law and therefore there is no need to address them through alaw. In order to eliminate potential confusion on this matter, term ‘dampinge karþývergi’ should be replaced in the new legislation by the phrase ‘damping kesintisi’or ‘damping karþýlýðý’ and ‘telafi edici vergi’ with ‘sübvansiyon kesintisi’ or‘sübvansiyon karþýlýðý’.

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3.3. The substance of the domestic trade remedies legislation

Turkey’s trade remedies legislation contains certain provisions which could beinterpreted as being inconsistent with the AD, SCM and SG Agreements. Beforeembarking upon the identification of such inconsistent provisions, it would beuseful to clarify the hierarchical order between the domestic legislation and thecited three Agreements.

As explained above, the AD, SCM and SG Agreements have the force of lawunder Turkish law. The domestic AD/CVD Legislation consists of a law, a decreeand a regulation whereas the SG Legislation consists of a decree and a regulation.The hierarchy between the three Agreements and the decrees and the regulationsin the domestic legislation is straightforward: having the force of law, in case ofconflict, the provisions of the Agreements prevail over those of the decrees andthe regulations.

The hierarchical order between the AD and SCM Agreements and the AD/CVD Law is more complicated since the Agreements also have the force of law.As noted above, Article 90 of the Turkish Constitution stipulates that duly ratifiedinternational treaties cannot be challenged on constitutional grounds. In this sense,such treaties are treated more favourably than domestic laws. Some authors arguethat Article 90 places international treaties above domestic laws in terms of hierar-chy.27 Others, however, disagree on the grounds that if the drafters of the Consti-tution had this intention, they would have indicated it clearly in the Constitution.According to these authors, therefore, in the absence of clear language to thiseffect, it would be erroneous to advocate the view that duly ratified internationaltreaties prevail over domestic laws.28 According to this interpretation, the order ofpriority between duly ratified international treaties and domestic laws has to bedetermined based on the same principles with respect to the resolution of conflictsbetween two domestic laws.

The latter view better reflects the text of the Constitution. One of the principleson the basis of which the order of priority between two legislative instruments atthe same hierarchical level may be determined is to give weight to the latest instru-ment because it is considered to contain the latest legislative intent on the mattersunder consideration. In this regard, in case of conflict between the AD and SCMAgreements and the AD/CVD Law, the latter would prevail over the former. There-fore, any provision of the AD/CVD Law that conflicts with these Agreementswould prevail even though this would carry with it the potential of Turkey actinginconsistently with its WTO obligations. This, however, is very unlikely to arise inpractice because (setting aside the minor issue highlighted below regarding thedefinition of ‘like product’) the AD/CVD Law does not contain any provision thatwould conflict with the AD or SCM Agreement.

27 See A. Gözübüyük and T. Tan, Ýdare Hukuku, Vol. 1, 2nd Ed. (Ankara, Turhan 2001), at 78.28 See H. Pazarci, Uluslararasý Hukuk Dersleri, Vol. 1, 9th Ed. (Ankara, Turhan 2001), at 32; M.

Sur, Uluslararasý Hukukun Esaslarý (Ýzmir, Dokuz Eylül Üniversitesi Yayýný 2000), at 54.

16


However, the AD/CVD Decree and Regulation as well as the SG Decree andRegulation do contain such conflicting provisions. Because these two Decreesand Regulations are subservient to the AD, SCM and SG Agreements which havethe force of law, such conflicting provisions would, in principle, not change thestate of affairs under Turkish law on such matters. In other words, in case of con-flict, the relevant provisions of the cited Agreements would prevail over those ofthe mentioned Decrees and Regulations.

Thus, one could argue that a legal challenge through WTO dispute settlementagainst Turkish trade remedies legislation would, in all likelihood, fail.29 This,however, cannot be guaranteed. Where the national legislation contains a provi-sion that is flatly inconsistent with a provision of one the cited three Agreements,the WTO panel should be expected to give some weight to such inconsistency. Itwould be erroneous to assume that such a panel would automatically find thatTurkish law cannot be found to be WTO-inconsistent merely because of the statusattributed to duly ratified international treaties under Article 90 of the Constitu-tion.

The above reflects the possible outcome of a hypothetical challenge to Turkishtrade remedies legislation. As explained below, however, the AD/CVD Decreeand Regulation and the SG Decree and Regulation do not contain any provisionthat is unequivocally inconsistent with the AD, SCM or SG Agreements. The fewpoints highlighted below pertain to relatively minor issues.

Having said that, it has to be underlined that a determination based on a provi-sion of the mentioned Decrees and Regulations which are inconsistent with theAD, SCM or SG Agreements would be inconsistent with Turkey’s WTO obliga-tions. In other words, a determination made in a given trade remedy investigationin accordance with a WTO-inconsistent provision of the Turkish trade remedieslegislation would necessarily lead to a violation of Turkey’s WTO obligations inconnection with that particular investigation. Therefore, such inconsistent provi-sions ought either to be eliminated from the domestic legislation or disregarded inthe investigations carried out by the Turkish investigating authorities in order topreclude such an action against Turkey. Provisions of the mentioned Decrees andRegulations that are inconsistent with the AD, SCM and SG Agreements are iden-tified below.

29 Both a Member’s law and its practice can be challenged in WTO dispute settlement. See, Appel-late Body Report, United States – Sunset Review of Anti-Dumping Duties on Corrosion-Resis-tant Carbon Steel Flat Products from Japan (‘US – Corrosion-Resistant Steel Sunset Review’),WT/DS244/AB/R, adopted 9 January 2004, DSR 2004:I, 3, para. 82. WTO panels have gener-ally reasoned that for a Member’s law to be WTO-inconsistent it has to mandate WTO-incon-sistent behaviour or preclude WTO-consistent behaviour. See, for instance, Panel Report, UnitedStates – Sunset Review of Anti-Dumping Duties on Corrosion-Resistant Carbon Steel FlatProducts from Japan (‘US – Corrosion-Resistant Steel Sunset Review’), WT/DS244/R, adopted9 January 2004, as modified by Appellate Body Report WT/DS244/AB/R, DSR 2004:I, 85,para. 7.114.

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3.3.1. AD/CVD Legislation

Article 28(A) of the AD/CVD Regulation defines the de minimis subsidy rate andnegligible subsidized imports in CVD investigations. Subparagraph (b) only men-tions de minimis subsidization but fails to reflect, as stipulated in Article 11.9 ofthe SCM Agreement, that where the volume of subsidized imports, actual or po-tential, or injury, is negligible, an application for the initiation of an investigationhas to be rejected and an investigation has to be terminated.30 As such, this provi-sion of the Regulation is incomplete.

Article 29.4 of the AD/CVD Regulation states that where the subsidy subject toa CVD investigation is withdrawn, the investigation may be suspended or termi-nated. Article 19.1 of the SCM Agreement, however, clearly stipulates that wherethe subsidy subject to the investigation is withdrawn, no countervailing duty maybe imposed. Thus, the provision of the Regulation goes beyond the requirement ofthe SCM Agreement in that it provides the Turkish investigating authorities withthe option to suspend the investigation, rather than terminate it, where the subsidyis withdrawn.

Article 33.2 of the AD/CVD Regulation stipulates that where an undertaking isviolated, provisional or definitive measures may be imposed based on facts avail-able. However, Article 8.6 of the AD Agreement and Article 18.6 of the SCMAgreement only allow the imposition of provisional measures on the basis of bestinformation available in such circumstances. To the extent that it also allows theimposition of definitive anti-dumping or countervailing measures based on factsavailable in cases where an undertaking is breached, Article 33.2 of the Regula-tion runs counter to the cited provisions of the AD and SCM Agreements.

Articles 2(d) of the AD/CVD Law and AD/CVD Decree and Article 4(d) of theAD/CVD Regulation contain the following like product definition:

‘Like Product: A product which is alike in all respects to the product which isdumped or subsidized, or in the absence of such a product, another product withsimilar characteristics’ [emphasis added].

The definition of like product under Article 2.6 of the AD Agreement and footnote46 of the SCM Agreement, however, differs in that it refers to a product that hascharacteristics closely resembling those of the product under consideration. Thereis an important difference between two products that have similar characteristics

30 Article 29.1 stipulates, among others, that where the volume of imports is negligible, the Boardshall decide to terminate the investigation. In our view, however, this is not enough to eliminatethe lack of reference to negligibility of subsidized imports in Article 28(A)(b) which is the mostdirectly relevant provision of the Regulation in this regard. Article 29.1 mentions the volume ofimports in general without specifying whether this refers to dumped and/or subsidized imports.Assuming that Article 29.1 does refer to subsidized imports, the fact that this provision onlyrefers to the termination of an ongoing investigation and not to the rejection of an applicationfor the initiation of an investigation still constitutes a shortcoming.

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and those that have characteristics that closely resemble. As such, the definition inTurkey’s AD/CVD Legislation risks being inconsistent with the AD and SCMAgreements.

3.3.2. SG Legislation

As explained above31 , the requirements of Article XIX of GATT 1994 apply cu-mulatively with the SG Agreement to safeguard investigations conducted by WTOMembers. Article XIX of GATT 1994 requires that the increase in the volume ofimports, which triggers a safeguard investigation, occurs as a result of unforeseendevelopments and the importing Member’s GATT/WTO obligations. Thus, a WTOMember conducting a safeguard investigation has to demonstrate the unforeseendevelopment and the GATT/WTO obligation that it has undertaken, which lead tothe increase in the volume of imports of the product subject to the investigation.

Article 5 of the SG Decree and Article 6 of the SG Regulation lay down theconditions for the application of a safeguard measure. Neither provision mentionsthe two conditions emanating from Article XIX of GATT 1994. Nor is there anyother provision in the SG Decree or SG Regulation that cites these conditions.This constitutes an important shortcoming in Turkey’s SG Legislation.32

Article 5.2 of the SG Decree and Article 9.2 of the SG Regulation provide thatprovisional safeguard measures can take the form of increased tariffs and othercharges, quotas based on quantity or value of imports, tariff rate quotas or somecombination thereof. By contrast, Article 6 of the SG Agreement stipulates thatprovisional safeguard measures can only take the form of tariff surcharges. Article5.2 of the SG Decree and Article 9.2 of the SG Regulation are, therefore, inconsis-tent with the SG Agreement to the extent that they allow the imposition of provi-sional safeguard measures in a form other than increased tariffs.

Article 7(a) of the SG Regulation provides that a safeguard measure may beimposed where there has been an increase, either in absolute terms or relative todomestic production or consumption, in the volume of imports of the subject prod-uct. Article 2.1 of the SG Agreement, however, does not allow the imposition of asafeguard measure where the increase is relative to domestic consumption. It onlyallows the imposition of a measure in case of an increase relative to domesticproduction.33 Article 7(a) of the SG Regulation therefore is inconsistent with the

31 See supra note 3.32 Practice shows that Turkish investigating authorities have, in some investigations, failed to

identify the unforeseen development and the GATT/WTO obligation assumed by Turkey whichlead to increased imports. See, for example, the investigation on cotton yarn (Communiqué onSafeguard Measures in Imports (2008/5), Official Gazette of Turkey, 23.5.2008, No. 26884.)and motorcycles (Communiqué on Safeguard Measures in Imports (2006/12), Official Gazetteof Turkey, 15.8.2006, No. 26260).

33 The autor’s view that the SG Agreement does not allow the imposition of a safeguard measure insituations where there is an increase in the volume of imports relative to domestic consumptionis supported by the wording of the corresponding provisions of the AD and SCM Agreements.Article 3.2 of the AD Agreement and Article 15.2 of the SCM Agreement explicitly stipulate

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SG Agreement in so far as it allows the imposition of a safeguard measure wherethere has been an increase in the volume of imports relative to domestic consump-tion.

4. TURKEY’S IMPLEMENTATION OF TRADE REMEDYMEASURES

Despite the relatively short history of its trade remedies legislation, Turkey hasgradually increased its use of these measures and become one of the most activeusers among WTO Members. Below, the trends in the use of trade remedy mea-sures by Turkey between 1995 and 2008 are analyzed. The year 1995 has beentaken as the starting point of the analysis because the AD, SCM and SG Agree-ments, which require WTO Members to notify their trade remedy measures, cameinto force in that year.

4.1. Anti-dumping measures

Table 1 shows the number of anti-dumping measures imposed by Turkey between1995 and 2008. 11 Measures were imposed in 1995.34 There were no measuresduring the following three years because it took Turkish investigating authoritiestime to adapt to the new rules embodied in the AD Agreement signed in the Uru-guay Round and to train their investigators.

Table 1. Anti-dumping measures imposed by Turkey (1995-2008)

1995 1996-1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Total

11 0 1 8 2 11 28 16 9 21 6 11 124

Source: WTO database

As mentioned above, the AD/CVD Legislation was amended in 1999 in order toincorporate the new provisions of the AD and SCM Agreements. As the chartbelow illustrates, the number of measures started rising significantly as from 2000.After a decline in 2001, a new and sharper upward trend started. With 28 measuresimposed, 2003 marked Turkey’s peak with regard to the number of anti-dumping

that a measure may be imposed where there is an increase in the volume of dumped or subsi-dized imports relative to domestic production or consumption. The fact that the drafters of theWTO Agreement did not include ‘consumption’ in the text of Article 2.1 of the SG Agreementindicates that they intended to limit the imposition of a safeguard measure to situations wherethere is an increase in the volume of imports relative to domestic production.

34 These measures were imposed in investigations initiated prior to the conclusion of the UruguayRound and therefore were not subject to the disciplines of the AD Agreement. See, the transi-tional provision in Article 18.3 of the AD Agreement.

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measures imposed. This was followed by a mainly declining trend until 2005. Thesituation since 2005 seems somewhat inconsistent with several ups and downs.The most recent trend is upward and it remains to be seen what will be the impactof the current economic crisis on the number of measures that Turkey will imposein 200935 and 2010.

Based on the number of measures imposed between 1995 and 2008, Turkey wasthe sixth most frequent user of anti-dumping among all WTO Members, precededby India, the United States, the European Community, Argentina and South Af-rica.

Table 2 shows the product breakdown of the 124 anti-dumping measures im-posed by Turkey between 1995 and 2008. It shows that plastics have taken thelead, followed by textiles, metals and chemicals.

Table 2. Product breakdown of anti-dumping measures by Turkey (1995-2008)

Sector Number of Measures Percentage

Plastics 43 35Textiles 27 22Metals 21 17Chemicals 10 8Others 23 19Total 124 100


35 In the first half of 2009, Turkey initiated two anti-dumping investigations (on ‘knives for foodprocessors’ originating in China and Hong Kong, China). It imposed five definitive measures inthe same period (on ‘knives for food processors’ originating in China; ‘synthetic and artificialstaple fiber yarns’ originating in China, India and Indonesia; and ‘certain finished or semi-finished artificial leather’ originating in China). See semi-annual report of Turkey submittedpursuant to Article 16.4 of the AD Agreement (WTO document G/ADP/N/188/TUR circulatedon 30.9.2009).

Fig. 1.

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Table 3 shows the countries affected by anti-dumping measures imposed by Tur-key between 1995 and 2008. With 39 percent of all measures targeting its exports,China has been by far the most affected exporting country, followed by other Asiancountries such as Chinese Taipei, Thailand, India and Korea. It is interesting tonote that the vast majority of the anti-dumping measures imposed by Turkey inthis period targeted other developing countries.

Table 3. Anti-dumping measures by Turkey (1995-2008): affected countries

Country Number of Measures Percentage

China, P.R. 48 39Chinese Taipei 9 7Thailand 9 7India 8 6Korea 7 6Indonesia 5 4Russia 5 4Malaysia 4 3Ukraine 4 3Viet Nam 4 3Others 21 17Total 124 100


4.2. Countervailing measures

Turkey has conducted only one CVD investigation so far. It concerned PET filmsoriginating in India and resulted in the imposition of definitive countervailing du-ties.36

4.3. Safeguard measures

With regard to the number of safeguard measures imposed between 1995 and2008, Turkey was at the top of the list of all WTO Members, followed by India,Chile, Jordan and the United States. The first time Turkey imposed a safeguardmeasure was in 2005. Every single year after that registered new investigations.37

Products subject to safeguard measures imposed by Turkey reveal no clear pat-tern. They range from ‘activated earth and clays’ to ‘footwear’ and ‘glass mirrors’.

36 See WTO document G/SCM/N/191 circulated on 7.5.2009.37 So far in 2009, Turkey notified the initiation of one safeguard investigation which concerns

‘matches’. See WTO document G/SG/N/6/TUR/15 dated 6.5.2009.

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Table 4. Safeguard measures by Turkey (1995-2008)

1995-2004 2005 2006 2007 2008 Total

0 2 4 1 4 11


5. TRADE REMEDIES IN THE CONTEXT OF THE CUSTOMSUNION BETWEEN TURKEY AND THE EUROPEANECONOMIC COMMUNITY

5.1. Background

The history of the relations between the European Economic Community (herein-after: EEC or Community) and Turkey dates back to 1963, where Turkey and theCommunity signed the Ankara Agreement establishing an association between thetwo Parties, which entered into force on 1 December 1964.38 The Ankara Agree-ment clearly anticipated the progressive establishment of a customs union betweenthe EEC and Turkey (Article 2.2)39 . Also anticipated by the two contracting par-ties was Turkey’s accession to the EEC as a full Member. This was conditioned onTurkey becoming capable to undertake the obligations set out in the Treaty ofRome establishing the European Economic Community (Article 28).

The association envisaged by the Ankara Agreement would comprise threestages: the preparatory stage, the transitional stage and the final stage (Article

38 Association Agreement of 12 September 1963 (Agreement of 12 September 1963 establishingan Association between the European Economic Community and Turkey, Council Decision 64/732, JO 3687/64; English version: OJ 1977 L 361/29.

39 Chapter 1 of Title II of the Ankara Agreement is entitled ‘the customs union’. Article 10, theonly article found under Chapter 1, contains provisions that deal exclusively with the customsunion.

Fig. 2.

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2.3). Pursuant to Article 3.2, the preparatory stage would normally last 5 yearswith a possibility of an extension in accordance with the Provisional Protocolannexed to the Ankara Agreement. Article 1.1 of the mentioned Protocol, in turn,envisaged the end of the preparatory stage and the beginning of the transitionalstage through the signing of an additional protocol between the two contractingparties.

The Additional Protocol was signed in 1970 and became effective on 1 January1973. The preamble to the Protocol states that its provisions are to be annexed tothe Ankara Agreement. The preamble also reiterates the fact that the ultimate ob-jective of the transitional stage is to set up a customs union between Turkey andthe EEC. Pursuant to Article 11 of the Additional Protocol, the process leading tothe establishment of this customs union would end within 22 years.

The Turkey-EEC Association Council marked the completion of this 22-yearperiod through the adoption of the Decision No. 1/95 on 6 March 1995, which setup the customs union and laid down the principles on which it would be based.40

According to this Decision, the customs union between the Community and Tur-key came into force on 1 January 1996. The customs union only covers trade inindustrial goods (Article 2). Agricultural products fall outside the scope of thecustoms union41 .

5.2. Trade remedies in the context of the customs union

Neither the Ankara Agreement nor the Additional Protocol eliminated the applica-tion of trade remedies in the trade between Turkey and the Community. The onlyprovision in these two texts specifically addressing trade remedies is Article 47 ofthe Additional Protocol. Paragraph 1 of this Article stipulates that where, at therequest of a Contracting Party, the Association Council finds that dumping is tak-ing place in the trade between the two Contracting Parties, it will recommend thatthe Party engaging in such practice put an end to it. If the Association Council failsto make a recommendation within three months following such an application orwhere the Contracting Party to which a recommendation is directed fails to stopdumping, the injured Contracting Party may take suitable protective measures(Article 47.2(a) and (b)).

Article 47 also allows the imposition of a provisional measure pending theoutcome of the inquiry. Thus, where the interests of the injured Party call forimmediate action, that Party may introduce interim protective measures. It may,however, only do so after informing the Association Council. These provisionalmeasures can only be maintained for three months following the application di-rected to the Association Council or from the date on which the injured Party takesaction because of the other Party’s failure to follow the recommendation of theAssociation Council to end dumping (Article 47.2, second paragraph).

40 Association Council Decision 1/95 (Customs Union), OJ 1996 L 35/1.41 Parties agreed that additional time would be needed to obtain free movement of agricultural

products (Art. 24).

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Where a Contracting Party takes measures pursuant to Article 47.2(a) and (b),the Association Council may decide that the imposition of those measures be sus-pended pending the issuance of recommendations under paragraph 1. Further, theAssociation Council may recommend the abolition or amendment of measurestaken following the Council’s failure to issue a recommendation upon the requestof that Contracting Party.

The mechanism set out under Article 47 of the Additional Protocol has fromtime to time been used by the Parties. However, to the best of the author’s knowl-edge, there has never been a situation where the use of this mechanism lead to theelimination of alleged dumping without necessitating the initiation of an investi-gation.

Like the Ankara Agreement and the Additional Protocol, Decision No. 1/95(hereinafter: the Decision) which sets out the modalities of the customs unionbetween Turkey and the Community, has not eliminated the application of traderemedies between the two Parties. It, however, contains more specific provisionson this matter. These provisions address the implementation by Turkey of traderemedy measures in its trade with third countries and the application of thesemeasures in the internal trade between Turkey and the Community.

5.2.1. Application of trade remedies by Turkey in its trade with thirdcountries

5.2.1.1. Coordination in the application of trade remedy measuresThe first question that arises with regard to the application of trade remedies to-wards third countries is to what extent, if at all, the Community and Turkey willcoordinate their actions. This is addressed in Article 45.2 of Decision 1/95 whichstipulates:

‘In the framework of the application of trade policy measures towards third coun-tries, the Parties shall endeavour, through exchange of information and consulta-tion, to seek possibilities for coordinating their action when the circumstances andinternational obligations of both Parties allow.’

This provision envisages some sort of coordination in the application of traderemedies towards third countries. The means contemplated for such coordinationare the exchange of information and consultation. Such coordination, however, issubject to both Parties’ international obligations.

Article 45.2 does not specify the type of information that is intended to beshared between Turkey and the Community in this regard. To the extent that thisincludes confidential information submitted by interested parties in the investiga-tions conducted by Turkey or the Community, WTO obligations of both Partieswould stop them from sharing such information. Both the Community and Turkeyare WTO Members and are therefore bound by the obligations set out in the AD,SCM and SG Agreements. These Agreements impose strict limits to the sharing of

25



information obtained in the course of an investigation. Specifically, confidentialinformation submitted to investigating authorities cannot be disclosed withoutspecific permission from the interested party that has submitted the information.42

Therefore, Parties have to consider their WTO obligations when resorting to themechanism set out under Article 45.2.

Turkey and the Community consult each other with respect to investigationsthat they conduct. Such consultation, however, seems to be limited to an exchangeof lists of investigations conducted and measures imposed by the Parties vis-à-visthird countries. It is hard to describe this process as ‘coordination’ of trade remedyactions by the two Parties as contemplated under Article 45.2.43 It is unlikely thatthe status quo on this matter will change in the near future without a significantdevelopment in Turkey’s accession negotiations with the Community.

5.2.1.2. Harmonization of Turkey’s trade remedies legislationArticle 12 of the Decision requires Turkey to apply, in its trade with third coun-tries, provisions and implementing measures which are substantially similar tothose of the Community. The list provided in this Article includes Community’sAD, CVD and SG Regulations.

With a view to complying with this bilateral commitment, Turkey incorporatedin its trade remedies legislation certain aspects of the Community’s legislationwhich are not found in the relevant WTO Agreement. The aspects of the Turkishtrade remedies legislation which find their basis exclusively in the relevant Com-munity legislation are described below.

5.2.1.3. AD/CVD legislationArticle 9.1 of the AD Agreement provides that it is desirable that WTO Membersconducting anti-dumping investigations impose the anti-dumping duty at a ratelesser than the margin of dumping calculated in the underlying investigation ifsuch lesser duty would suffice to remove the injury suffered by the domestic in-dustry. The same principle is contained in Article 19.2 of the SCM Agreementwith respect to countervailing duties. The Community applies the lesser duty rulewith regard to provisional and definitive anti-dumping duties, as stipulated in Ar-ticles 7.2 and 9.4 of the Council Regulation No. 384/96, respectively. Articles12.1(d) and 15.1 of the Council Regulation No. 2026/97 contain parallel provi-sions with respect to provisional and definitive countervailing duties, respectively.

Turkey has incorporated this principle of the Community’s legislation. Articles7.1 and 12 of Turkey’s AD/CVD Law also provides for the lesser duty rule withrespect to definitive and provisional anti-dumping and countervailing duties, re-spectively.

42 AD Agreement Article 6.5; SCM Agreement Article 12.4; SG Agreement Article 3.2.43 Indeed, in a joint statement addressed to the WTO Committee on Regional Trade Agreements,

the two Parties also acknowledged that Decision 1/95 had no provisions regarding the commonapplication of anti-dumping and countervailing measures towards third countries. See, WTOdocument WT/REG22/5 dated 20.10.1996, p. 5.

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The AD Agreement is silent regarding the WTO-consistency of rules againstthe circumvention of anti-dumping duties.44 Article 13 of the Council RegulationNo. 384/96 addresses the circumvention of anti-dumping duties and explains theprocedures through which such circumvention is to be counteracted.45

Articles 2(i) and 11 of Turkey’s AD/CVD Decree46 and Articles 4(i) and 38 ofthe AD/CVD Regulation47 contain provisions that reflect the relevant parts ofArticle 13 of the Council Regulation to a significant degree.

Article 9.5 of the AD Agreement and Article 19.3 of the SCM Agreement ad-dress newcomer’s reviews. Article 9.5 of the AD Agreement stipulates that theinvestigating authorities can initiate a newcomer’s review for exporters that havenot exported the subject product to the importing Member during the period ofinvestigation in the underlying investigation and which are not related to exportersor producers that were subject to that investigation. Article 19.3 of the SCM Agree-ment provides for a newcomer’s review for exporters that were not investigated inthe underlying investigation for reasons other than a refusal to cooperate. Article 8of the Turkish AD/CVD Decree subjects these reviews to an additional condition:it states that a newcomer’s review can be conducted for an exporter that has eitheractually exported the subject product to Turkey following the investigation periodor entered into an irrevocable contractual obligation to export a significant quan-tity of it.48 This has been taken from Article 11.4 of the Council Regulation 384/96.

Article 14.4 of the Council Regulation 384/96 and Article 24.4 of the CouncilRegulation 2026/97 provide for the suspension of anti-dumping and countervailingduties, respectively, in cases where the Community interest so requires. This prin-ciple is reflected in Article 9 of the Turkish AD/CVD Decree.

The AD and SCM Agreements do not contain any rule regarding the time pe-riod within which the complaint for the initiation of an investigation has to beassessed by the investigating authorities. Turkey’s AD/CVD Regulation, in its Ar-ticle 20.1, follows Article 5.9 of the Council Regulation 384/96 and Article 10.13

44 Although anti-circumvention was part of the negotiations in the Uruguay Round, no Agreementwas reached on this matter. At the conclusion of the Round, Ministers recognized the desirabil-ity of having uniform rules on this issue and decided that this be discussed in the WTO Commit-tee on Anti-Dumping Practices. The Informal Group on Anti-Circumvention was established in1997 where discussions have been taking place on this important issue. Discussions in theGroup, however, have not so far yielded an agreeable approach. The issue of anti-circumventionis also part of the ongoing Doha Round of trade negotiations.

45 Article 23 of the Council Regulation 2026/97 contains similar provisions regarding the circum-vention of countervailing duties.

46 Articles 2(i) and 11 of the AD/CVD Decree were amended on 27.12.2005. See, OfficialGazette of Turkey, 31.12.2005, No. bis 26040.

47 Articles 4(i) and 38 of the AD/CVD Regulation were amended on 26.1.2006. See, OfficialGazette of Turkey, 26.1.2006 No. 26061.

48 The same condition is repeated in Article 36.2 of the AD/CVD Regulation. It is interesting tonote that although the Community’s CVD legislation does not contain this particular condition,Turkish law has incorporated it both with regard to anti-dumping and CVD investigations.(Newcomer’s reviews are addressed in Article 20 of the Council Regulation 2026/97.)

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of the Council Regulation 2026/97, and stipulates that the investigating authori-ties have to complete their pre-initiation assessment within 45 days from the dateof the complaint.

The SCM Agreement does not contain any provision regarding the use of thesampling methodology in CVD investigations. Following Article 27 of the Coun-cil Regulation 2026/97, Article 27 of the Turkish AD/CVD Regulation providesfor the use of the sampling methodology in CVD investigations.

The SCM Agreement does not specify the de minimis rate of subsidization withregard to developed countries subject to CVD investigations. Following Article14.5 of the Council Regulation 2026/97, Article 28(B)(a) of the Turkish AD/CVDRegulation provides for a 1 percent de minimis rate for developed countries sub-ject to CVD investigations conducted by Turkey.

Article 12 of the Council Regulation 384/96 and Article 19.3 of the CouncilRegulation 2026/97 provide for the amendment of an anti-dumping orcountervailing duty, respectively, in situations where the imposition of the dutyhas not resulted in a change in the resale price of subject imports in the Commu-nity market. This mechanism, which is not mentioned in the AD and SCM Agree-ments, has been reflected in Article 39 of the Turkish AD/CVD Regulation.

The AD Agreement does not provide for specific methods with regard to thecalculation of normal value in anti-dumping investigations against non-marketeconomy countries.49 Article 2.7 of the Council Regulation 384/96 sets out rulesregarding the determination of normal value in such situations. This mechanismhas been incorporated in Article 7 of the Turkish AD/CVD Regulation. Article 2.7of the Council Regulation 384/96 was amended through Council Regulation 905/98 dated 27 April 1998. This amendment was also incorporated into Turkish lawthrough an amendment to the AD/CVD Regulation.50

The SCM Agreement does not contain detailed rules regarding the calculationof the amount of subsidy in CVD investigations. Article 14 of the Agreement, theonly provision that deals with subsidy calculations, provides certain guidelines forthe calculation of the amount of subsidy on the basis of benefit to the recipient.Given the limited scope of the provisions found in the SCM Agreement, WTOMembers have considerable discretion with regard to the methods to be used forsubsidy calculations in CVD investigations. The methods that the Community uses

49 The only relevant provision in this regard is found in the additional note to Article VI of GATT1994 which reads: ‘1. Hidden dumping by associated houses (that is, the sale by an importer ata price below that corresponding to the price invoiced by an exporter with whom the importer isassociated, and also below the price in the exporting country) constitutes a form of price dump-ing with respect to which the margin of dumping may be calculated on the basis of the price atwhich the goods are resold by the importer. 2. It is recognized that, in the case of importsfrom a country which has a complete or substantially complete monopoly of its trade and whereall domestic prices are fixed by the State, special difficulties may exist in determining pricecomparability for the purposes of paragraph 1, and in such cases importing contracting partiesmay find it necessary to take into account the possibility that a strict comparison with domesticprices in such a country may not always be appropriate.’

50 Official Gazette of Turkey, 2.5.2002, No. 24743.

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51 Circulated in WTO document G/SCM/N/1/EEC/2/Suppl.2 dated 8.1.1999.52 See: <http://www.dtm.gov.tr/dtmadmin/upload/ITH/DampingSubvansiyonDb/mevzuat/haksiz/

2008/Uygulama_Usul_Esaslari.pdf>.53 Source: WTO database.

for subsidy calculations are set out in Article 7 of the Council Regulation 2026/97.Article 15 of the Turkish AD/CVD Regulation incorporates verbatim the provi-sions of Article 7 of the Council Regulation 2026/97. The Community subsequentlypublished guidelines on subsidy calculations51 which were also imported intoTurkish law.52

5.2.1.4. SG legislationThe SG Agreement does not require WTO Members contemplating to impose asafeguard measure to explore whether such imposition would be in the publicinterest. Article 3.1 of the Agreement only provides that interested parties in asafeguard investigation should be given the opportunity to express their views,inter alia, on whether the imposition of a measure would be in the public interest.Articles 16 and 17 of the Council Regulation 3285/94 explicitly condition theimposition of safeguard measures on a finding that such measures would be in theCommunity interest. Articles 1 of the Turkish SG Decree and Regulation alsoreflect this principle.

Unlike the AD and SCM Agreements, the SG Agreement does not contain anyprovision regarding the consequences of foreign exporters’ failure to cooperatewith the investigating authorities in the course of a safeguard investigation. Coun-cil Regulation 3285/94, however, does contain such a provision in its Article 6.5.This provision has been incorporated in Article 4.4 of the Turkish SG Regulation.

Similarly, unlike the AD and SCM Agreements, the SG Agreement does notspecify the time-limit for the completion of a safeguard investigation. CouncilRegulation 3285/94 stipulates that such investigations have to be completed within9 months, with a possibility of extension to 11 months. The Turkish SG Regula-tion, in its Article 4.6, contains the same provision.

5.2.2. Application of trade remedies in the internal trade betweenTurkey and the Community

Since the establishment of the customs union, Turkey has initiated 8 anti-dumpinginvestigations against the Community or its Member states and imposed anti-dump-ing measures in 6 of them. The Community has initiated 12 anti-dumping investi-gations and imposed measures in 2 of them.53 No CVD investigations have beeninitiated between the two Parties in the mentioned period.

Provisions of Decision 1/95 relative to trade remedies are found in section IIIentitled ‘trade defence instruments’, which contains four articles. Article 44.1 laysdown the main principles with regard to the internal application of trade remediesin the Turkey-EEC customs union. It provides:

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54 As it stands, the language in Article 44.1 suggests that that no suspension is envisaged withregard to the internal application of safeguard measures even if the conditions in Article 44 arefulfilled. It is not clear why safeguards have been excluded from the scope of this provision.Whatever the motive, this happens to be in line with the current WTO jurisprudence on theapplication of safeguard measures between free trade area and customs union partners. Accord-ing to the WTO’s Appellate Body, the scope of imports that establish the basis of the investigat-ing authorities’ decision to impose a safeguard measure should correspond to the scope of importsthat are subjected to that measure. It would be inconsistent with the SG Agreement to excludefrom the scope of a safeguard measure imports from an exporting country without showingexplicitly that imports from other sources have caused serious injury to the domestic industry inthe importing country (See Appellate Body Report, Argentina – Safeguard Measures on Im-ports of Footwear (‘Argentina – Footwear (EC)’), WT/DS121/AB/R, adopted 12 January 2000,DSR 2000:I, 515, paras. 111-113; Appellate Body Report, United States – Definitive SafeguardMeasures on Imports of Wheat Gluten from the European Communities (‘US – Wheat Gluten’),WT/DS166/AB/R, adopted 19 January 2001, DSR 2001:II, 717, paras. 96-98). Thus, it wouldin any case have been risky from a WTO law point of view if Decision 1/95 allowed the exclu-sion of Turkey from the scope of safeguard measures imposed by the Community and viceversa. The WTO jurisprudence raises the question of whether it would be WTO-consistent for aMember to exclude its free trade area or customs union partners from the scope of a safeguardmeasure if imports from those partners are also excluded from the scope of the underlyinginvestigation. In US – Line Pipe, the Appellate Body explicitly avoided this question. See,Appellate Body Report, United States – Definitive Safeguard Measures on Imports of CircularWelded Carbon Quality Line Pipe from Korea (‘US – Line Pipe’), WT/DS202/AB/R, adopted8 March 2002, DSR 2002:IV, 1403, paras. 198-199. In this regard, it is worth noting that thedelegate of the Community, at the meeting of the WTO Committee on Regional Trade Agree-ments where the Turkey-EC customs union was discussed, ‘emphasized that the Parties hadcommon obligations by virtue of the WTO disciplines in this area.’ See WTO document WT/REG/22/M/1 dated 6.3.1997, para. 48.

‘The Association Council shall review upon the request of either Party the principleof application of trade defence instruments other than safeguard by one Party in itsrelations with the other. During any such review, the Association Council may de-cide to suspend the application of these instruments provided that Turkey hasimplemented competition, State aid control and other relevant parts of the acquiscommunautaire which are related to the internal market and ensured their effectiveenforcement, so providing a guarantee against unfair competition comparable tothat existing inside the internal market.’

Article 44.1 stipulates that the Association Council, upon request from either Party,may review the principle of the application of anti-dumping and countervailingduties in the internal customs union trade provided Turkey implements competi-tion, state aid control and other relevant parts of the acquis communautaire. Thisindicates that Turkey and the Community will continue to apply trade remedies intheir internal trade until such time as Turkey implements the cited parts of theacquis.54

That the two customs union partners will continue to apply trade remedies intheir internal trade is also evident from Article 46 of Decision 1/95, which reads:

‘By derogation from the principle of the free movement of goods laid down inChapter I where one Party has taken or is taking anti-dumping measures or other

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55 See Togan, supra n. 9, at 1014; K. Barysh, ‘The Economics of Turkish Accession’, in K. Barysh,S. Everts and H. Grabbe, Why Europe Should Embrace Turkey (London, CER 2005 ), at 33.

56 It is not clear why CVD investigations are excluded from the scope of this statement.

measures pursuant to trade policy instruments as referred to in Article 44 in its rela-tions with the other Party or with third countries, that Party may make imports ofthe products concerned from the territory of the other Party subject to the applica-tion of those measures. In such cases it shall inform the Customs Union Joint Com-mittee accordingly’ [emphasis added).

Article 46 reiterates that Turkey and the Community can apply trade remedy mea-sures against each other. Further, it recognizes that Parties are independent fromanother in the application of such measures towards third countries. The last sen-tence of this Article imposes a notification obligation on the two Parties. It re-quires the Party applying a trade remedy measure against the other Party or againstthird countries to inform the Customs Union Joint Committee of such measures.This means that each Party has to notify all its trade remedy measures to thatCommittee. The Article does not articulate the modalities of this notification obli-gation. Currently, Parties exchange lists of their trade remedy measures every othermonth.

Turning to the conditions mentioned in Article 44.1, with regard to competi-tion, Turkey has fulfilled its obligation by setting up the Turkish Competition Au-thority and adopting the relevant Community legislation.55 The adoption of theacquis on state aids has yet to be achieved. The third condition, other relevantparts of the acquis, is ambiguous and provides room for political manoeuvringwith regard to the elimination of trade remedies in the internal trade of the cus-toms union.

As explained above, Article 47 of the Additional Protocol contains a mecha-nism aimed at resolving allegations of dumping in the trade between the Commu-nity and Turkey through means other than the imposition of a measure. Article44.2 of Decision 1/95 states that ‘[t]he modalities of implementation of anti-dump-ing measures set out in Article 47 of the Additional Protocol remain in force.’ TheStatement by the Community on Article 44 of Decision 1/95 reinforces this mecha-nism. It provides that the Community will inform Turkey before the initiation ofanti-dumping and safeguard investigations.56 Further, it stipulates that the Com-munity will give a clear preference to undertakings rather than duties in anti-dump-ing investigations against Turkey.

The legal provisions outlined above show that Turkey and the EU will, for theforeseeable future, continue to apply trade remedy measures against each otherdespite the customs union that has been in existence since 1 January 1996.

This was also confirmed by the delegate of the Community at the meeting ofthe WTO Committee on Regional Trade Agreements where the Turkey-EEC cus-toms union was discussed. In response to a question regarding the coordination oftrade remedy actions towards third countries, the delegate of the Community statedthat ‘after the transitional period, the Parties would harmonize their legislation

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and cease to apply commercial defence instruments in their relationship with eachother.’57 However, he underlined that until such time as harmonization is reachedwith regard to the application of trade remedy measures by the two Parties, eachParty would continue to take these measures through investigations conductedindependently from the other Party.58

6. CONCLUSION

Trade remedies in Turkey have a history of only 20 years. The country passed itsfirst trade remedy legislation in 1989, which only covered anti-dumping and CVDinvestigations. This was followed by the introduction of SG Legislation in 1995.Over time, these two pieces of legislation were amended in light of Turkey’s obli-gations under the WTO Agreement and the customs union with the EEC. Despitethis relatively short history, however, Turkey has become one of the most activeusers of these measures internationally.

The AD/CVD Legislation consists of a law, a decree and a regulation whereasthe SG Legislation consists of a decree and a regulation. There is no legal require-ment to have a law addressing anti-dumping and CVD investigations in Turkey.Similarly, Turkish law does not necessitate a decree as part of the AD/CVD or theSG Legislation. Therefore, the AD/CVD Law, the AD/CVD Decree and the SGDecree should be repealed and these two areas should be legislated through regu-lations. Legislation consisting of a regulation, rather than a law and/or a decree,provides the administration with more flexibility in terms of the possibility toadapt the legislation to changing circumstances. It is also for the sake of adminis-trative efficiency that this approach should be followed.

Turkey’s AD/CVD Decree, AD/CVD Regulation, SG Decree and SG Regula-tion contain certain provisions which could be interpreted as conflicting with thecorresponding provisions of the AD, SCM and SG Agreements. As far as the WTO-consistency of Turkey’s trade remedies legislation is concerned, such potentialinconsistencies would not cause a problem because the AD, SCM and SG Agree-ments having the force of law in Turkey, the provisions of the Decrees and Regu-lations that conflict with the cited Agreements would have no effect. However, theimplementation of the mentioned provisions of the Decrees and the Regulations inthe context of trade remedy investigations may give rise to WTO-inconsistent de-terminations. In order to avoid this, and for the sake of harmonious legal drafting,the provisions which conflict with the AD, SCM or SG Agreements should berepealed. Should the ongoing Doha Round of trade negotiations end with the sign-ing of a new AD and SCM Agreement, Turkish authorities could take this opportu-nity to redraft the whole AD/CVD Legislation taking into consideration the specificcomments made above. Although the SG Agreement is not part of the mandate in

57 See WTO document WT/REG/22/M/1 dated 6.3.1997, para. 40.58 See WTO document WT/REG/22/M/1 dated 6.3.1997, para. 48.

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the Doha Round, it would be useful to simultaneously make the changes proposedabove with regard to the SG Legislation.

In the new legislation, the use of the word ‘vergi’, which means ‘tax’ in theTurkish language, should be avoided in order to preclude confusion regarding thelegal nature of anti-dumping and countervailing duties. Such duties do not consti-tute ‘tax’ measures for the purposes of Turkish law. They find their legal basis inArticle 167, not Article 73, of the Constitution.

The customs union between Turkey and the EEC which came into effect in1996, and which only covers industrial goods, does not preclude the imposition oftrade remedy measures in the internal trade between the two Parties. This situationis likely to continue in the foreseeable future. The mechanism laid down in Article47 of the Additional Protocol has not altered the status quo in this regard. As far asthe harmonization of trade remedies legislation is concerned, Turkey has fulfilledits commitment under Article 12 of Decision 1/95 by incorporating aspects of theEEC’s legislation which are not addressed in the AD, SCM and SG Agreements.

Documents

Trade remedies under Turkish law - Asser