New Turkish engine emission legislation discriminates against European industry

Turkish legislation that became applicable on 1 January 2018 introduces a difference in engines emission requirements for tractors produced within Turkey and within the EU when being placed on the Turkish market. This means that a new tractor produced in Turkey is allowed to have Stage IIIA engines, while the same tractor produced in the EU must include Stage IV engines.

Competitiveness of European industry hurt

Installing Stage IV engines makes tractors produced in the EU significantly less attractive for Turkish farmers. Stage IV engines are more expensive and often require the use of AdBlue. Moreover, the after-treatment devices needed will increase the size of the tractor. These new requirements severely harm sales of European tractors in Turkey. Hence, it hampers the competitiveness of the European agricultural machinery industry.

Level-playing field needed

CEMA supports free trade and a level-playing field for tractors produced inside and outside the EU. Therefore, CEMA strongly opposes this Turkish regulation since it results in unfair competition. There should be no difference in requirements for tractors produced within Turkey and the EU, particularly considering the Customs Union between Turkey and the EU. Either the tractors produced in Turkey need to have types of engines as allowed in the EU or the tractors produced in the EU are allowed with the same engines as tractors produced in Turkey.

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.