FREE TRADE AGREEMENTS AND ORIGIN

"What is a Free Trade Agreement ( STA), let's define it in a simple way. A free trade agreement that may affect trade between two or more countries tariff and non-tariff barriers by allowing for the creation of a free trade area between the parties, however, the existing national arrangements of the parties with third countries in the trade agreements that allow it to continue. At the heart of these agreements is the management of mutual interest relations in the international trade policy of countries. These agreements provide for the reduction or abolition of customs duties, the reduction or increase of quotas and, ultimately, the removal of protection walls before the contracting countries and thus serve as a guide for exporters and importers of the contracting countries. Carrying out international trade activity around the world, companies of 3 2% in trade policy and free trade agreements in recent years, developed country parties for the development of trade with the company objectives and planning are carried out. At the end of the work done, ‘profitability’ is essential, and the FTA(free trade agreements) stand out as one of the elements that most affect these profitability rates. On the other hand, our country is a member of the Customs Union of the European Union and has an obligation to assume the common trade policy of the EU. Turkey also has the right to preferential trade with other non-EU countries.

Free Trade Agreements in force and the negotiation process has been completed
So far, 34 FTA have been signed by our country and have been terminated due to the fact that 11 countries that are parties to these agreements are members of the EU. 19 FTA is in force, and the Free Trade Agreement with Syria was suspended by a decision of the Council of Ministers on 6 December 2011. The Lebanese and Kosovo Stas of the Lebanese and Kosovo side, respectively, and the Faroe Islands and Singapore Stas will enter into force after the completion of the internal approval processes of both sides. FTA negotiations with Ghana have been completed and the Ghana Sta is aimed to be signed in the coming period. A Service Trade Agreement and Investment Agreement were also negotiated with South Korea as part of the Sta expansion efforts and as part of the Sta, the agreements were signed on February 26, 2015. The agreements are expected to take effect upon completion of the internal approval process. In addition, negotiations on expanding the scope of the agreements are ongoing with EFTA, Bosnia and Herzegovina, Albania, Macedonia, Georgia and Serbia.

Free Trade Agreements in progress
Currently, Peru, Ukraine, Colombia, Ecuador, Mexico, Japan, the Democratic Republic of Congo, Cameroon, Seychelles, Gulf Cooperation Council, Libya, Mercosur, free trade agreements continues. Among these countries, the chapters on trade and investment in services with Peru, Mexico, Japan are discussed. In addition, negotiations have started with the countries of the United States, Canada, Thailand, India, Indonesia, Vietnam, the Central American Community, African Caribbean Pacific countries, Algeria and South Africa, which are another group of 10 countries. Turkey collects the opinions and suggestions of companies exporting with these countries before the Ministry of Economy for separate processes with Thailand and Indonesia. These agreements are essential for Export - Import Policy, and often trade methods are applied to protect against customs duties through other countries within the scope of both transit trade and DIIB ( internal transaction regime). In particular, strategic decisions such as international investment environments and installations abroad are also considered in the light of these practices and reflected in feasibility reports. Another important element of international trade is the ‘Origin’ status of the product subject to trade. A product manufactured in any country abroad belongs to that country and is considered the origin of that country. According to the Kyoto Convention, it is defined as “specific provisions developed based on principles established by national legislation or international agreements and used by a country to determine the origin of goods”. There are two types of origin rules: non-preferential and preferential. Our country is included in the origin cumulation system related to Origin. Non-preferential Origin; completely includes the country of origin, in the Customs Code;

‘in which it is obtained or produced in its entirety, including land waters, and

or, if the production of goods is carried out in more than one country, it is indicated by articles that "a new product has been manufactured or that an important stage of production and the latest based labor and action deemed economically necessary". If the origin is Preferential, it is the type of origin applied to the item that needs to be used from tariff applications. Ezcümle, free trade agreement with the country with autonomous( unilateral ) concessions and discounts provided by the country, the goods to be traded may be exempt from reduced customs duty or customs duty this type of origin is the basis. If the countries meet the criteria of origin,’ wholly obtained products’ must be passed through ‘sufficient labor or processing ’ (sufficent working or processing) if the imported products are not completely obtained from the relevant country.

Adequate labor and process stages;

Simple painting and polishing processes,

Sugar coloring or sugar lumps forming processes,

7 Turkish Customs Tariff Schedule valid in 2011, dated 30/12/2010 and numbered 27801 (duplicate) T.C. It was published in the official newspaper".

Simple mixing of products, regardless of their different types,

Simple assembly of parts or disassembly of products can be given to form a completed product. When deciding whether Labor or transactions applied to a particular product should be considered “insufficient labor or transactions”, all transactions performed in one of the contracting countries shall be considered together. In this respect, if one or part of the labor or operations performed on non-Origin substances are not of insufficient labor or process nature, the resulting product receives preferential Origin status, provided that it meets the requirements contained in the list rules.

Example 1; a product obtained entirely in Turkey21 is imported to Macedonia for further processing. The final product obtained as a result of insufficient labor or processing in Macedonia, and may be exported to Turkey as originating in that country."

Example 2: a machine part originating in the European Union (EU)23 is exported to Switzerland"for further processing. The machine part in question is processed in Switzerland beyond insufficient labor or processes and sent to Turkey, and this product obtained is processed beyond insufficient labor and processes in Turkey and the machine is manufactured. In Switzerland", insufficient labor or processing performed on Substances of EU origin gives the resulting product Swiss origin. Likewise, the final product obtained in Turkey"is of Turkish origin.

Example 3; from citrus USA " in position 0805, 17. the sugar contained in the chapter is imported from Switzerland to Turkey." From these products, fruit juices classified in the 2009 tariff position in Turkey are manufactured and the final product is exported to Switzerland." According to annex 25 of the protocol of Origin II of the agreement between EFTA States and Turkey; the labor or operations required to apply to non-Origin substances in order for the product contained in the 2009 position to obtain the status of origin are shown below

(Of U.S. origin are not considered as products originating in preferential trade between Turkey and Switzerland): the product code as the definition of non-originating materials, workmanship or processes that gives it the status of origin by applying to (1) (2) (3) or (4) 2009 fruit juices (including grape must) and vegetable juices, not fermented and no additional alcohol-free) (added sugar or other sweetening matter, whether or not in any position except the position where the product is located are added from the entry, and - manufacturing the final product, which does not exceed 30% of the factory price of the product in the value of all inputs contained in Chapter 17 used, primarily provides the tariff position change criterion (classified in U.S. citrus 0805 position), as well as 17 used in the production of the final product. Since the articles contained in the chapter have Swiss origin, they are considered to be of Turkish origin within the framework of the cumulation of origin. Therefore, the rule that the value of all inputs contained in Chapter"17"does not exceed 30% of the ex-works price of the product" will not apply to Swiss sugar. In this case, fruit juices can be exported to Switzerland"within the preferential regime as originating in Turkey, as non-originating fruits have undergone sufficient labor and processing.

FERHAT TOMO (MA)