RESTRICTEDWORLD TRADE
ORGANIZATIONWT/REG61/4
24 June 1999
(99-2578)
Committee on Regional Trade Agreements Original:  English
FREE TRADE AGREEMENT BETWEEN TURKEY AND LITHUANIA
Questions and Replies
This document reproduces questions addressed to the Parties and the responses submitted.
The questions and replies set out below are organized in accordance with document WT/REG61/3.
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I. BACKGROUND INFORMATION ON THE AGREEMENT
4. Trade Data
The Parties to the Agreement have circulated  overall two-way trade data at the chapter
or section level for the last few years.  While this information is useful, unfortunately the
information does not respond to the request ma de by the Committee.  Committee members are
still unclear on the treatment of certain type s of products under the Agreement.  While the
Parties claim that all trade is covered by the Agreement, it appears that some products –
primarily agricultural – are not subject to tariff elimination and in fact may receive only tariff
preferences.  Committee members have requested, on several occasions, statistical information
that would show the amount/type of trade s ubject to varying treatment under the Agreement.
Similar data has been provided by the parties to other agreements.  We are not prepared to
complete the factual review of this Agreement – or any other agreements - until satisfactorytrade data has been provided.  We note that while the Parties to the Agreement may consider
the meaning of the term "substantially all trade" to be a topic for the discussion on systemic
issues, the information we have requested has been provided by the parties in reviews of other
agreements.  Please provide the trade data that has been requested.
We welcome the trade statistics provided by the FTA parties in the standard format
report.  We would be grateful for clarification of what percentage of FTA trade between the
parties (for each party):
For agricultural products- will have the duties/regulations eliminated?
- receives concessions (less than MFN but greater than zero duties and/or quotas) or is
excluded from FTA provisions?
For industrial products- will have the duties/regulations eliminated?WT/REG61/4
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- receives concessions (less than MFN but greater than zero duties and/or quotas) or is
excluded from FTA provisions?
See Annex.
II. TRADE PROVISIONS
5. Safeguards
Articles 16, 18, 19 and 21 (Structural Adju stment/Emergency Action/Re-export and
Serious Shortage/Safeguards Procedures):  Ca n the Parties explain whether there is any
difference in practice between the obligations under these Articles and the manner in which
they will operate and the obligations of the Parties under the WTO?  Can the Parties confirm
that measures applied under these Articles will be applied in a non-discriminatory manner
without prejudice to the interests of non-parties to this FTA.
Parties are allowed to take appropriate measur es that are in full conformity with the
obligations stemming from the WTO rules where the measures are enforced on the rule of non-
discrimination between Parties and non-Parties.  Of all the safeguard measures set out in the
Agreement, only a structural adjustment measure under Article 16.2 of the Agreement, namely infant
industries, or certain sectors undergoing restructuring or facing serious difficulties, can justify amargin of preference for parties.  Even the possibility to use this type of measure under the
Agreement is limited in duration, ending on 1 January 2001.
Article 16 (Structural Adjustment):  This Article makes provisions for exceptional
measures to be taken concerning infant industries, or sectors undergoing restructuring or facingserious difficulties have any structural adjustme nt measures been taken, and if so, on what
products?  How is it decided that exceptional measures can be taken?
Article 18 (Emergency Action):  Have any safeguard measures under this Article been
taken?  If so, on what products and for what duration?
No structural adjustment measure or emergency action has been taken by the Parties within
the meaning of Article 16, 18, since the entry into force of the Agreement.
Article 26 (Balance-of-Payments – BOP – Measures):  Will BOP measures under this
Article be applied in a non-discriminatory manner and without prejudice to the interests of
non-parties to this Agreement?
BOP measures will be applied in a non-discriminatory manner to the interests of non-parties
to this agreement and in accordance with the conditions laid down in the WTO rules.
7. Subsidies and State-Aid
Article 25 (Competition Policy):  We acknowledge that competition policy is not covered
in explicitly by the WTO rules.  However, certain aspects of competition are captured by
various WTO rules we therefore would be grateful for comments on the following questions:
- What criteria are to be applied in asse ssing whether actions prevent, restrict or
distort competition, or whether actions by dominant undertakings constitute an
abuse of their position?WT/REG61/4
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- Are these considerations subject to specific legally based processes?
The criteria for evaluating whether actions prevent, distort or restrict competition are
explicitly stated in Article 24.  Moreover, any issues on the competition rules are consulted andmeasures are taken within the Joint Committee and parallel to the guidelines laid down in the Parties'
respective Agreements with the EU.
8. Sector-Specific Provisions
8.1 Agriculture
Article 11 (Agriculture/Fisheries):  Is consideration being given to establishing free
trade in agriculture, or to extending existing provisions on agriculture and fisheries to cover
more products or to liberalize further (e.g. elim inating duties/quotas on products currently only
listed for concessions or currently exempt)?
Parties have granted each other preferential market access possibilities under the Agreement
for a number of agricultural and processed agricultural products under positive lists.  In accordance
with Article 11, further liberalization of trade in agricultural products is an important component of
the agreement.  This objective will be taken up regularly within the Joint Committee meetings
9. Other
9.2 State Monopolies
Article 20 (State Monopolies):  Which products are currently subject to state
monopolies?  This Article suggests that state mo nopolies might currently discriminate in their
commercial decisions – Can the Parties confirm that such monopolies operate in a manner
consistent with GATT Article XVII in their purchases from and sales to third countries?
The importation of alcohol and alcoholic beverages excluding whisky and natural sparkling
wines are under the monopoly of Turkish Government.  In accordance with GATT Article XVII, the
monopoly operates in a non discriminatory manner concerning commercial decisions without creatingany advantage for Lithuanian exporters against non-parties to the Agreement.WT/REG61/4
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ANNEX
Imports of Turkey from Lithuania, 1995-1997,
by different duty levels according to the Agreement
1995
Agricultural products Industrial products Total imports Duty
rate 1,000 US$ % 1,000 US$ % 1,000 US$ %
0% 215 43 30,229 100 30,444 99
Less than MFN 0 0 0 0 0 0
MFN 282 57 0 0 282 1
1996
Agricultural products Industrial products Total imports Duty
rate 1,000 US$ % 1,000 US$ % 1,000 US$ %
0% 0 0 29,938 100 29,938 97.2
Less than MFN 251 29 0 0 251 0.8
MFN 606 71 0 0 606 2.0
1997
Agricultural products Industrial products* Total imports Duty
rate 1,000 US$ % 1,000 US$ % 1,000 US$ %
0% 0 0 38,562 100 38,562 98.4
Less than MFN 0 0 0 0 0 0.0
MFN 589 100 0 0 589 1.6
*  Duties on products subject to timetables will be abolished in 2001.
Imports of Lithuania from Turkey, 1995-1997,
by different duty levels according to the Agreement
1995
Agricultural products Industrial products Total imports Duty
rate 1,000 US$ % 1,000 US$ % 1,000 US$ %
0% 709.5 34.26 4971.0 87.18 5,680.25 73.08
Less than MFN 0.0 0.00 0.0 0.00 0.0 0.00
MFN 1,361.5 65.74 731.0 12.82 2,092.0 26.92
1996
Agricultural products Industrial products Total imports Duty
rate 1,000 US$ % 1,000 US$ % 1,000 US$ %
0% 673.75 60.09 8,102.00 92.33 8,775.75 88.68
Less than MFN 0.00 0.00 0.00 0.00 0.00 0.00
MFN 447.50 39.91 6,72.25 7.67 1,119.75 11.32
1997
Agricultural products Industrial products* Total imports Duty
rate 1,000 US$ % 1,000 US$ % 1,000 US$ %
0% 406.25 34.68 1,4008.25 88.76 1,4414.5 85.02
Less than MFN 0.00 0.00 0.00 0.00 0.0 0.00
MFN 765.25 65.32 1,773.75 11.24 2539.0 14.98
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