ANKARA: In 2011, Turkey imposed for the first time “additional customs duties.” These are duties as high as 50% imposed on top of normal customs duties on certain goods entering the Turkish territory. These additional customs duties affect goods originating in (i.e., made in) the United States, as well as all countries with which Turkey has no preferential trade agreement (e.g., China and India).
So far, Turkey has imposed additional customs duties on nine product categories, from textile, apparels and footwear products, to white goods (i.e., large electrical goods used domestically such as refrigerators and washing machines, typically white in color). It is expected that more products will be targeted in the future, including possibly medical devices.
Within the trade community, there is widespread agreement that these duties likely breach the customs union between Turkey and the European Union, as well as the World Trade Organization (WTO) Agreement. Under the WTO Agreement (GATT Article II), for example, WTO country members committed, among other things, to subject imports of goods to ordinary customs duties that are no higher than the duty level negotiated with other WTO members, the so-called “bound” rate. WTO members also committed not to impose any new “other duties or charges of any kind.” The imposition of any ordinary customs duty in excess of the bound rate, therefore, would appear to be a breach of the WTO Agreement. Likewise, the imposition of any new other duty or charge would appear to be a breach of the WTO.
Nevertheless, the WTO Agreement permits the suspension by a WTO member of concessions made, if that member faces a rapid surge of imports caused by the obligations incurred under the WTO Agreement. The suspension of concessions is governed by Article GATT Article XIX, and the WTO Agreement on Safeguards. These two texts contain the discipline whereby a WTO member can decide to temporarily suspend concessions made in the WTO, by imposing “safeguards” measures. Safeguard measures can take the form of duties. The WTO Agreement permits also the imposition of anti-dumping duties and of countervailing duties, following investigations complying with the WTO Agreement on Anti-dumping (WTO ADA) and the WTO Agreement on Subsidies and Countervailing Measures (WTO ASCM). Outside anti-dumping, countervailing and safeguard measures, a WTO member cannot impose unilaterally any other duties or charge. In prior cased, the WTO’s Dispute Settlement Body has determined that ordinary customs duties are “customs duty in the strict sense of the term,” and that a duty that is “extraordinary” or “exceptional” is not an ordinary customs duty.