In today’s world, countries have a tendency to engage in bilateral and regional free trade agreements (FTA)because of World Trade Organization’s (WTO) underachievement in delivering further level of liberalization. WTO’s regulations bind all members but sometimes more competitive conditions/better market access conditions are needed by countries and that is assured by regional/plurilateral arrangements. Because of this tendency, there are more than 500 FTAs which are notified to WTO; 350 of which are in force.
Türkiye, being a party to the General Agreement on Tariffs and Trade 1947 (GATT) and a founding member of the World Trade Organisation (WTO), conducts Free Trade Agreements in line with the GATT. Despite the Most Favorable Nation State rule is still the guiding principle, the Article XXIV of the Agreement regulates the conditions under which a member can grant more favourable treatment to certain trading partners within a customs union or a free trade area.
Without prejudice to WTO provisions, the Turkey-EU Customs Union constitutes major legal basis of Türkiye’s free trade agreements. Under the Customs Union, Türkiye aligns its policies with the EU’s Common Commercial Policy. This alignment concerns both the autonomous regimes and preferential agreements with third parties. Together with the EU Common Customs Tariff, the preferential trade regimes constitute the most important part of the trade policy applied towards third countries.
Article 16 of the Decision No. 1/95 of the Turkey – EC Association Council on implementing the final phase of the Customs Union provides that Türkiye would, among the others, take the necessary measures and negotiate agreements on a mutually advantageous basis with the countries concerned. Accordingly, Türkiye negotiates and concludes free trade agreements with third countries in parallel with those of the EU.
Under the light of the changing global conjuncture, insurmountable stalemate in multilateral negotiations and reoccurring economic crises, the EU decided to focus on bilateral trade agreements. Those agreements were intended to help boosting growth under the new trade strategy called “Global Europe” in 2006. Therefore, the EU started to negotiate FTAs with specific provisions covering services, investment, public procurement, and intellectual property rights. Having launched negotiations parallel to those of the EU, Türkiye also adapts itself to the wide range of topics covered in the Agreements and negotiates new generation FTAs.
The FTAs signed with Lebanon, Qatar, Sudan and Ukraine are under ratification process.
Also, Türkiye has been conducting negotiations to extend the scope of its existing FTAs with an aim to update and deepen their scope. To this extent, FTAs with EFTA, Serbia, Bosnia and Herzegovina and Montenegro have been updated, the negotiations with Georgia have been concluded and the negotiations with Malaysia will be finalized in the near future.
Meanwhile, there are specific countries/country blocs that Türkiye has started FTA negotiations. Türkiye has been actively engaged in negotiations with 3 of them; namely Indonesia, Japan and Thailand. Türkiye continues its efforts to speed up the process for our remaining ongoing FTA negotiations with Gulf Cooperation Council, and MERCOSUR. Türkiye also has 4 Preferential Trade Agreements (TTAs) in force with Iran, Azerbaijan, Pakistan and Uzbekistan.
[1] The FTA between Türkiye and Jordan was repealed on 22 November 2018. The FTA between Türkiye and Syria was suspended on 6 December 2011. The preferential trade treatment withnin the context of the FTA between Türkiye and the United Kingdom has entered into force by 1 January 2021, and the Agreement as a whole entered into force on 20 April 2021.