Includes the barriers (tariff and non-tariff) that U.S. companies face when exporting to this country.
Last Published: 6/20/2019

In 2005, the European Commission began European Union (EU) accession proceedings with the Republic of Turkey.  Prior to beginning its move towards EU accession, Turkey and the EU formed a Customs Union in 1995, which covers industrial products and processed agricultural goods.  Turkey adopted the EU’s common external tariff (CET) for most industrial products and for industrial components of agricultural products.  Both the EU and Turkey agreed to eliminate all customs duties, quantitative restrictions and charges with equivalent effect on their bilateral trade.  Turkey’s adoption of the EU’s CET also resulted in lower duties for imports from third countries, including the United States.  The Customs Union allows zero duty rates and no quotas for non-agricultural items of EU and European Free Trade Association (EFTA) origin.  The current import regime is organized in five chapters that list more than 20,000 items, identified with 12-digit Harmonized Tariff System numbers.  Turkey and the EU have committed to modernizing the Customs Union to cover additional sectors such as services and agricultural, though discussions have been delayed by political concerns.

The Turkish government estimates that, as a result of the European Customs Union, the average duty rate for imports from the EU and EFTA countries has dropped from approximately 10% to zero.  Turkey has reserved some exempted categories for sensitive products with tariffs on these items generally much higher than the Common Customs Tariff (CCT).  Some agricultural goods remain protected by steep tariffs.

Turkey is a member of the WTO and regulates its customs in line with General Agreement on Tariffs and Trade (GATT) requirements.  While generally in compliance with the WTO agreement, Turkey often fails to notify the WTO of changes to import requirements.  When this occurs, companies’ views are often not taken into account, nor are they given ample time in which to comply and adapt to changes in how they do business.  These changes to import requirements can serve as non-tariff barriers such as implementation of reference price systems, lack of control certificates, new burdensome documentation requirements, and unnecessary and intrusive inspections.  Even though customs legislation is a direct translation of EU legislation, there may be differences in how they are interpreted and, therefore, implemented.

The Government of Turkey adheres to a ‘reference pricing’ model for pharmaceuticals whereby the pharmaceutical prices in France, Spain, Italy, Portugal and Greece are referenced and prices are determined based upon the lowest reference price available in those markets.  If a product is an original, the price is set at 100% of the lowest price among those five countries.  However, if it is a generic product, it is set to 60%.  As reimbursement is determined by prices denominated in euros, the TRY-EUR exchange rate is vital to pharmaceutical products’ feasibility in the Turkish market.  Since 2015, at the beginning of each year, the GOT announces a fixed TRY-EUR rate that will be used for that year.  In 2015, this rate was determined by taking 70% of the previous year’s average TRY-EUR exchange rate.  It was then amended in early 2019 to be 60% of the previous year’s average.  This policy has been problematic for U.S. and other pharmaceutical companies’ ability to remain viable in the Turkish market.  Consequently, a number of new, innovative pharmaceutical products have either been delayed or even left out of the market altogether.

Agricultural trade is subject to tariff quotas and price regulation and thus a significant degree of protection.  The agricultural and pharmaceutical sectors, in particular, are under a number of protectionist measures, such as localization, which have also extended to other industries such as apparel and medical devices.  Moreover, the Turkish procurement system remains prone to opaque and lengthy tendering processes, onerous terms and conditions and substantial delays, which can hamper a bidder’s ability to effectively engage and compete.  The U.S. Government has raised these matters via high-level discussions with the Turkish government and, in cooperation with industry, continues to pursue mutually agreeable solutions.

For more information and help with trade barriers, contact:

International Trade Administration
Enforcement and Compliance
202-482-0063
ECCommunications@trade.gov
www.trade.gov/enforcement

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.