Trade restrictions in motor vehicle industry in Turkey: European Union demands to eliminate trade restrictions on used motor vehicles ·

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Turkey, as the largest emerging market in Europe, is an area of highly increasing
mobility and motorization. Motor vehicle industry in Turkey, which is a facilitator of other
sectors in the economy as well, comes as second leading exporting sector after textiles and is
quite competitive in global markets. The EU, with a major share in both exports and imports
of motor vehicle products in Turkey, plays a major role under the conditions of the Customs
Union between Turkey and the Community since 1996.

The Association Agreement Decision No. 1/95, which started the Customs Union,
regulates free movement of industrial goods and procurement of competitive trade
environment between Turkey and the EC. The said Decision made no differentiation between
trading of new/used goods. Turkey placed a derogation against the imports of used motor
vehicles of all kinds without any time limitation under the Customs Union, which was met by
approval of the EU.
At present, the EU demands elimination of this derogation by either changing the
scope of the declaration or its duration. In Turkey, there is a resistance to the elimination of
the derogation mainly from motor vehicle producers in Turkey, until Turkey becomes a
member of the EU. Turkey has economic and legal justifications which support the existence
of the derogation. Several member countries of the EU had made use of similar trade
restrictions in the form of quotas in candidacy period and even after accession to the EU.
In the economic aspect, factors such as production capacity, imports and exports
figures, consumer prices and laws, and competitiveness of the sector are major issues that
have impact on the decision to keep the trade restrictions on used motor vehicles. European
manufacturers have also undertaken huge investments in Turkey and their interests need to be
taken into consideration when it comes to make a decision about the import of used motor
vehicles into Turkey.
Sudden permission to imports of used vehicles involves the risk of decreasing the size
of the sector in Turkey which means, apart from loss of all the revenues coming from taxation
and foreign trade of products of motor vehicle industry and investment, there will be a huge
loss in terms of qualified employment.

Vildan Tuba Ilgaz
Trade restrictions in motor vehicle industry in Turkey: European Union demands to eliminate trade restrictions on used motor vehicles · 2005 · 108 sayfa.
Danışman: Prof.Dr. Osman Küçükahmetoğlu

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