Turkey: risks & detrimental effects of potential market obstructions
CEMA is greatly concerned about potential trade obstructions in Turkey which would exert a detrimental effect on Turkey’s competitiveness in agricultural production and would obstruct opportunities for other Turkish industries across the world (for FULL statement, please click on the link below).
In particular, CEMA is worried about the following two measures negatively affecting farm machinery in Turkey:
- Discriminatory treatment between tractors produced in Turkey and tractors produced in the EU
- Import barriers (new duty on non-EU-, South Korea- and Malaysia- produced tractors and certain components (diesel engines and transmissions)
1. Discriminatory treatment between tractors produced in Turkey and tractors produced in the EU
As of January 2018, it is foreseen that EU-produced tractors imported to Turkey would be treated differently to tractors produced and sold in Turkey. In particular, it is foreseen that EU-produced tractors imported to Turkey would need to meet the stricter engine emission requirements of Stage IV (Tier 4 final) while tractors produced in Turkey would only need to meet the less strict emission requirements of Stage IIIB (Tier 4 interim).
This discriminatory treatment would be to the direct disadvantage of Turkish farmers who:
- Would face a cost penalty in excess of 10% for purchasing most probably more efficient, state-of-the-art EU-produced tractors
- May have difficulties to access ultra-low-sulfur diesel (ULSD) in rural areas
- Be exposed longer to higher pollutant diesel exhaust emissions from IIIB machines, with longer term impact on the agricultural environment.
- Purchase local products which cannot be exported to the EU
CEMA calls on Turkey to maintain equal treatment and a level-playing field in Turkey for tractors produced in the EU and tractors produced in Turkey.
The discriminatory treatment in terms of engine emission requirements presents an effective technical barrier to trade (TBT) which hampers the free flow of goods and goes against the spirit and aim of the EU-Turkey Customs Union.
2. Import barriers (new duty on non-EU produced farm machinery)
Decision Number 2017/9750 foresees a new 21% duty on non-EU produced tractors. These measures risk to deprive Turkish farmers from access to a broad portfolio of affordable, state-of-the-art tractor models.
By discouraging foreign investment and commitment, they will hamper trade flow, competition, and product choice in Turkey. Ultimately, it also risks to hamper the innovative power and competitiveness of Turkish farm machinery manufacturers.
CEMA calls on Turkey to review and withdraw Decision Number 2017/9750 to avoid any new duties on imported farm machinery.