RESTRICTED
WORLD TRADE WT/BOP/W/6
11September 1995
ORGANIZATION(95-2595)
Committee onBalance-of-Payments Restrictions
1995 CONSULTATION WITH TURKEY
UNDER THE BALANCE-OF-PAYMENTS PROVISIONS
OFTHE GATT 1994 AND THE RELATED UNDERSTANDING
Background Paper bytheSecretariat
1. Thispaper hasbeenprepared inaccordance withparagraph 12oftheUnderstanding onthe
Balance-of-Payments Provisions oftheGeneral Agreement onTariffs andTrade 1994. Itdescribes
thedevelopments since thebackground paper prepared for1993 fullconsultation (BOP/W/149).
I. Previous consultations withTurkey
2. Turkey hasheldthirteen consultations intheGATT 1947Committee (1967, 1969, 1973, 1975,
1978, 1979, 1981, 1983, 1985, 1987, 1988, 1991, 1993) ofwhich seven were under thesimplified
procedures.Atthelastfullconsultation,heldon1April1993underArticleXVIII:12(b),theCommittee
commended thewidespread trade liberalization undertaken byTurkey, including theabolition ofthe
stamp duty, municipal taxandtransport infrastructure taxonimports andthetermination ofpayments
tothePrice Support andStabilization Fund. TheCommittee recognized thatTurkey wascommitted
toaprogramme ofprogressive reduction andphasing-out oftheMass Housing Fund (MHF) levied
onimports since 1984. TheCommittee noted that,inthe1993 Import Régime, thecombination of
import duties withpayments totheMass Housing Fundledtototalcharges onimports exceeding GATT-
bound levels in12percentoftariff linesinTurkey 'sschedule ofconcessions; Members, while not
querying thebroader purpose ofthismeasure, questioned whether itwasjustified under Article XVIII:B.
TheCommittee alsorecognized thatthebasic aimoftheMass Housing Fund wasnotforbalance-of-
payments purposes andtherefore welcomed Turkey 'sreadiness toimplement theenvisaged reduction.
TheCommittee tooknoteofTurkey 'sdeclared intention todisinvoke Article XVIII:B intheforeseeable
future (BOP/R/207).
3. Subsequent toarequest forinformation atthemeeting oftheGATT 1947 Committee held
on24November 1993Turkey provided detailed listsofalltarifflinesonwhich thecombined incidence
ofthetariffandtheMass Housing Fund charge exceeded GATT-bound ratesin1994(BOP/314/Adds.1
and2).Therelevant notifications stated thatwiththeimprovements introduced bythe1994 Import
Régime, thecombination ofcustoms duties withpayments totheMass Housing Fund hadledtototal
charges onimports exceeding bound levels in1.7percentoftariff lines inTurkey 'sschedule of
concessions, compared to12percentin1993.
4. During theTrade Policy Review ofTurkey heldon20and21January 1994, theGATT 1947
Council noted thestatement bytherepresentative ofTurkey thattheintroduction oftheMHF charge
hadassisted Turkey toeliminate non-tariff barriers andmove away from import substitution. The
1994Import Régime hadeliminated theMHF charge onmore than2,600 commodities andhadreduced
ratesonothers, reducing theprotection provided bylevybynearly one-third; thephasing outwould
continue untilfinalelimination by1998, asmentioned inTurkey 'sFree-Trade AreaAgreement withWT/BOP/W/6
Page2
EFTA, ifnotbefore. Thelossofrevenue fromthelevywasexpected tobecompensated through tax
reform, including consumption taxes, yettobeintroduced, which would beapplied todomestic and
imported goods alike(C/RM/M/42).
II. Turkey 'sTrade andExchange System
5. Turkey became afullmember oftheWTO on26March 1995. Theestablishment ofacustoms
union withtheEuropean Union, foreseen for1January 1996, isinitsfinalphase.
(a) Mass Housing Fund Levy
6. TheMass Housing Fund levyhasbeencollected onimports since 1984 tofinance alowcost
public housing scheme. Thislevyistobeabolished onimports ofindustrial goods from allsources
asfromthedateoftheestablishment oftheCustoms Union between theEuropean Union andTurkey
on1January 1996. During 1995 thephasing-out ofthelevywasaccelerated withcutsinApril and
July, of20percenteachfrom thelevyratesof1January 1995.
7. InJuly1995thelevywasimposed onsome 12,214 tariff linesat8digitHSlevel, equivalent
to66percentofthetotal, atvarying advalorem andspecific rates. Thepresent average advalorem
levyrateis9.53percentofthec.i.f.value ofimports. Under the1995Import Régime, thecombination
ofcustoms duties withMHF levies ledtototalcharges onimports exceeding bound levels on42tariff
lines which represent 0.7percentoftotaltariff lines inTurkey 'sschedule ofconcessions and
corresponded to1.7percentofthetotalimports in1994(WT/BOP/4). Imports exempt fromcustoms
dutyunder incentive certificates arenotliable forpayment ofthelevy, noraresome ofthegrains
imported bytheTurkish Grain Board. Thevalue ofimports onwhich MHF wasapplied amounted
toUS$985.2 million in1994.
(b) Tariffs
8. Under theImport Régime issued inJuly1995, twotariff ratesareapplied: the"EU/EFTA"
rate,applied toimports fromthesesources, andthem.f.n. rateapplied toimports fromallothersources.
Thesimple average ofapplied m.f.n. tariff rates forallimports is10.47 percentandthesimple
arithmetic average ofEC/EFTA ratesis5.66percent.
9. InJuly1995, m.f.n. tariffs onimports ranged from zeroto117percentapplied ontobacco
andtobacco products; andtariffs onimports from theEUandEFTA countries ranged from zeroto
73percentapplied onfruitandvegetable juices. Duty exemptions apply torawmaterials and
intermediate andcapital goods. Inaddition, holders ofinvestment incentive certificates areeligible
toimport allinvestment machinery andequipment dutyfree. Form.f.n. imports, about threefourths
ofalltarifflinescarry atariffrateof8percentorless. More thanthreefourths ofEU/EFTA imports
aresubject totariff ratesof2percentorless. Virtually alltariffs ratesofover20percentaffect
agricultural orprocessed foodproducts. In1994therevenue collection fromcustom duties amounted
toUS$771 million.
10. IntheUruguayRoundnegotiationsTurkeybound100percentofdutiesonagriculturalproducts.
Onindustrial products (excluding petroleum products) 36percentoftarifflineswerebound atexisting
levels, which isequivalent to39percentof1989 imports. Over halfofalltariff linesarebound in
certain industrial sectors, suchasmachinery andtransport equipment, rubber, chemicals andhigh-
technology items. After theUruguay Round, imports under bound duties accounted for49percent
oftotalimports (at1989 levels). Theweighted tariff average onindustrial products based on1989
imports wasreduced from 25.1percentto22.3percent.WT/BOP/W/6
Page3
11. InaccordancewiththemodalitiesofthefutureCustomsUnionwiththeEuropeanUnionTurkish
customs duties willbefully aligned withtheCommon Customs Tariff oftheEuropean Union by
31December 1995. AsatJuly1995Turkey hascompleted 90percentofthealignment ofitscustoms
duties withtheEUCommon External Tariff onthe12-year listand85percentonthe22-year list
specified intheAdditional Protocol totheAssociation Agreement signed in1970. Turkey 'stariff on
industrial products willbealigned withtheEU'sCommon External Tariff asof1January 1996.
12. Thecustoms duties applicable byTurkey toindustrial products originating intheEuropean
Union arecalculated assuccessive percentage reductions oftheduties prevailing on23November 1970,
thedateofsignature oftheAdditional Protocol. InJanuary 1995, theduties applicable toproducts
ofEUorigin were phased down to5percentofthese basic duties forproducts onthe12-year list
and10percentforsensitive products onthe22-year list. These duties willbephased outby
31December 1995.
13. TheprovisionsoncustomsunionintheAdditionalProtocoldonotapplytoagriculturalproducts.
In1993, preferential tariff margins onagricultural products were granted unilaterally byTurkey on
some 287tariff linesinaccordance withAnnex 6oftheAdditional Protocol. TheEUalsobenefits
frompreferential tariff treatment onfishandfishproducts granted toEFTA countries interms ofthe
EFTA-Turkey Free-Trade Area Agreement.
14. Inaccordance withtheFree-Trade AreaAgreement between theEFTA countries andTurkey,
imports from EFTA countries benefit from thesame customs dutytreatment asimports from the
European Union countries. Bytheendof1995, Turkey willalsoabolish allcustoms duties andcharges
having equivalent effect onindustrial imports from these countries.
(c) Other measures affecting imports
15. Asurcharge of2.5percenthasbeenapplied since1985onimports ofminerals usedforenergy
production (e.g.oilandcoal), metallic minerals, industrial minerals andprecious stones, tofinance
theMining Fund.
16. Turkey alsooperates avalue-added taxsystem, applied atastandard rateof15percentto
mostimported anddomestic products. Thebaseofthevalue-added taxonimports isthesumofthe
c.i.fvalue andcustoms duty. Rates applying tofoodproducts range from1to8percent,andarate
of23percentapplies toluxury goods.
17. Allimports aresubject toautomatic import licensing forstatistical andsurveillance purposes.
Import certificates areissued bytheUndersecretariat ofandForeign Trade. Importers must obtain
inspection certificates from therelevant ministries forcertain goods, including telecommunications
equipment, agricultural products, chemicals, pharmaceutical products, vehicles andcoal. Atpresent
onlytheimportation ofnarcotics, stearoptene, weapons, ammunition andspare partsandcoins made
upofsilver orothermetals (except gold)isprohibited under special lawsforsecurity andhealth reasons.
(d) Exchange regulations andexchange controls
18. Turkey accepted Article VIIIoftheIMFArticles ofAgreement on22March 1990andisthus
committed nottoimpose restrictions onpayments forcurrent international transactions, ortoengage
indiscriminatory currency practices, without IMFapproval. TheCentral Bank regulates allmatters
related toforeign exchange operations. Allcommercial banks have been authorized bythe
Undersecretariat ofTreasury toengage inforeign exchange operations.WT/BOP/W/6
Page4
III. Macroeconomic Developments
19. MacroeconomicperformanceinTurkeysincethemid-1980swasmarkedbyratesofGNPgrowth,
atannual average ratesrealized onlyinafewOECD countries, against abackground ofsevere fiscal
imbalances. GNPgrewatanaverage annual rateofover5percentfrom1986to1993, mainly sustained
byrapidgrowth ofconsumption. Inresponse totheliberalization oftheeconomy, growth ofinvestment
andnetexports, although uneven overtheperiod, alsocontributed toGNP growth.
20. Economic activity expanded sharply in1992and1993withGNPgrowth of6.4and7.6percent
respectively, sustained byasurge indomestic demand reflecting large increases inrealwages across
theeconomy coupled withanotable expansion ofinvestment in1993. Thegrowth continued atan
annual rateofaround 4percentinthefirstquarter of1994. However, theTurkish economy ended
1993 withadeterioration inthepublic sector deficit financed largely byborrowing from theCentral
Bank (CBT); continued failure tocorrect thestructural causes ofimbalances; widening ofthecurrent
account deficit; andarapid riseindomestic credit andexternal borrowing. InJanuary 1994,
downgrading ofTurkey 'ssovereign credit rating tobelow investment grade, bytwoleading rating
agencies, ininternational capital markets, precipitated afinancial andexchange market crises which
triggered a45percentnominal depreciation oftheTurkish Liraagainst theUSdollar during thefirst
threemonths of1994andafurther 58percentinApril 1994.1(Depreciation ofTLagainst theUSdollar
was36percentbetween May1994 andMay1995.)
21. Acomprehensive stabilization programme waslaunched on5April 1994. Thepackage of
measures placed primary emphasis onsubstantial front-loaded fiscal retrenchment andmonetary
tightening, andlaidthebasis foracceleration ofthemedium-term structural reforms. Theprincipal
features ofthestabilization programme wereincreases intheprices oftheproducts ofStateEconomic
Enterprises; freezing ofpersonnel expenditures inthepublic service atthelevelofthe1994budgetary
allocation; freezing ofpublic sector projects; imposition ofasurcharge onthe1993 personal and
corporate income taxdeclarations; one-time taxesonthenetassets ofcorporations andonluxury motor
vehicles andsecond homes; andfurther privatization commitments.
22. AStand-by Arrangement insupport ofthestabilization programme wasconcluded withthe
IMFon8July1994. Thefirsttranche oftheStand-by credit equivalent toSDR 160.5 million was
released on13July1994. Three further tranches ofSDR 75million each, werereleased, respectively,
inNovember 1994, April andJune1995. TheStand-by Arrangement wasextended inApril 1995
forsixmonths byafurther SDR 101.2 million. Asof30June1995, thedrawings under theFund
Stand-by Arrangement amounted toSDR 385.5 million.
23. After thepeakof1993, GNP growth dipped by5.9percentin1994 andafurther 0.2per
centinthefirstquarter of1995 compared tothesame period of1994. Sharp fiscal adjustment, high
realinterest ratesandfinancial andtheexchange markets turmoil ofearly 1994 brought asignificant
reversal oftheprevious year'sgrowth incommerce (-7.5 percent), manufacturing (-5.7 percent)
andconstruction (-2percent). Themain decline inthemanufacturing sector wasrecorded inthe
automotive andtextiles sectors. Asaresult ofthecutinrealwages andpublic sector price increases,
aggregate domestic demand contracted by11.7percentin1994, compared toan11.9percentexpansion
in1993. Consumer spending ondurable goods fellby29percent. Public sector fixed investment
fellby34.8percentandprivate sector investment by9percentcaused byacredit crunch following
theexchange andfinancial market crisis. Further decline ofGNPin1994wascushioned bythesustained
growth ofexports.
1Calculated onthebasis ofmonthly average exchange rates.WT/BOP/W/6
Page5
24. Theweak financial performance oftheState Economic Enterprises together witharisein
personnel expenses andinterest payments inrecent years, havecontributed totheexpansion ofthe
expenditure sideintheconsolidated budget, andcreated pressure onCBTtofinance regularly about
athird ofthedeficit. Thestabilization programme of1994 enabled afiscal correction whereby the
percentage share ofthePublic Sector Borrowing Requirement inGNP decreased from 12.5percent
in1993 to8.0percentin1994. Despite thesubstantial increase ininterest payments there wasan
improvement oftheconsolidated budget deficit to3.9percentofGNPin1994, anadjustment ofalmost
3percentage points from1993which mainly reflected theprimary surplus, amounting to3.8percent
ofGNP. Thebudgetary revenues aspercentage ofGNP increased by1.9percentage points, aided
bythepackage ofone-time taxmeasures which increased thetaxrevenue to15.1percentofGNP.
Despite thereduction inthePSBR, public sector domestic borrowing increased substantially, mainly
intheformofissueofTreasury Bills, against adecline inborrowing fromtheCBTandforeign sources.
25. Priorto1993theauthorities setmonetary targets against abackground ofgrowing fiscal deficit.
Thispolicy stance resulted ingenerally highinterest ratesandtheappreciation oftherealexchange
rate. These inturnincreased theinterest costofthepublic debtandhadthepotential toundermine
export competitiveness. Without amonetary programme setfor1993, theTreasury increased itsreliance
ontheeasing ofmonetary policy forthemonetization ofthebudget deficit. TheTreasury resumed
itsmarket-based financing in1994initially atinterest ratesof50percentforthreemonths andataverage
annual ratesvarying from80to185percentovertheyear. There wasashare a998percentincrease
inissueofTreasury Billsinwhen theshare ofborrowing fromtheCentral Bank waslimited to18per
centofshort-term borrowing, compared to70percentin1993.
26. Aggregatedomesticcreditgrowth(publicandprivate),at85percentin1992and1993,declined
to70percentin1994 asfiscal tightening tookeffect. With thereduction ofexternal borrowing
domestic credit inthatyearwaslargely financed through anacceleration ofthegrowth ofbroad money.
In1993M2grew by48percentandM2Y by61percent; in1994, therespective growth rateswere
123and153percent. Theshare ofresidents 'foreign exchange deposits inM2Y rosefrom 23per
centin1990 to47percentattheendof1994 (46percentinMarch 1995).2
27. Astheresult ofthemonetary accommodation offiscal deficits, inflation inTurkey waspersistent
ataverage yearly ratesofaround 60-70 percentduring 1988-93. Despite thestabilization programmes
inflation increased intheearly partoftheyearunder thepressure oftheupward adjustment of
administered public sector prices andamassive nominal depreciation. With abriefeasing overthe
summer of1994, inflation re-emerged intheautumn raising theyear-on-year wholesale price index
toover149.6 percentbyDecember 1994. AsofJuly1995, inflation hasdeclined toabout 80percent
onatwelve-month basis.
28. ThenewPrivatization Lawadministering theprivatization ofthemajority oftheloss-making
StateEconomic Enterprises wasadopted in1994; however, progression inprivatization hasbeenslow.
Other medium-term structural measures tocorrect themacroeconomic imbalances include thereform
ofthesocial security system andthetaxsystem. Adraft lawonthereform ofthesocial security
institutions wassubmitted toParliament inApril 1995.
2Central Bank ofTurkey, Quarterly Bulletin; January-March, 1995. Residents 'foreign exchange deposits
aretaken from thebanks 'balance sheets.WT/BOP/W/6
Page6
IV. Balance ofPayments
29. In1993and1994, largebutopposing swings inthecurrent account andcapital account balances
offset oneanother, withtheeffect thattheoverall balance andthelevelofinternational reserves remained
stable (Table 1).
Table 1
Balance ofPayments Summary
(inmillions ofUSdollars)
1990 1991 1992 1993 1994 19951
Merchandise exports, f.o.b. 13,026 13,667 14,891 15,610 18,300 4,826
Merchandise imports, f.o.b.
(including nonmonetary gold)22,581 21,007 23,082 29,772 22,614 6,625
Trade balance -9,555 -7,340 -8,191 -14,162 -4,314 -1,799
Services andincome, credit
Ofwhich:
Travel8,933
3,2259,315
2,65410,451
3,63911,843
3,95911,833
4,3502,908
492
Services andincome, debit
Ofwhich:
Interest payments6,496
2,9076,816
3,2647,262
3,4307,829
3,4617,776
3,8602,040
914
Services andincome balance 2,437 2,499 3,189 4,014 4,057 868
Private transfers, net
Ofwhich:
Workers 'remittances
inflow3,349
3,0402,854
3,2463,147
2,8193,035
2,9192,716
2,631780
733
Official transfers, net 1,144 2,245 912 733 371 591
Transfer balance 4,493 5,099 4,059 4,747 3,087 1,371
Current account balance -2,625 258 -943 -6,380 2,830 440
Direct investment 700 783 779 622 482 108
Portfolio investment 547 648 2,411 3,917 1,001 -510
Other long-term capital
Drawings
Dresdner deposits, net
Amortizations-210
3,679
49
3,938-808
3,784
-497
4,095-938
3,523
410
4,8711,370
4,857
925
4,412-759
3,267
1,331
5,357-371
529
431
1,331
Total long-term capital 1,037 623 2,252 5,909 724 -773
Short-term assets, net
Short-term liabilities, net
Ofwhich:
Dresdner deposits, net-409
3,409
(-123)-2,563
-457
(-132)-2,438
3,834
(55)-3,291
6,345
(144)3,010
-7,7371,203
1,342
-46
Total short-term capital 3,000 -3,020 1,396 3,054 -4,727 2,545
Errors andomissions -468 940 -1,221 -2,275 1,396 1,445
Counterpart items for
valuation changes364 170 -- -- --
Overall balance (including
valuation changes)1,308 -1,029 1,484 308 223 3,657
IMFrepurchase (-) -53 -- -- -- 333 0
Official reserves
(inflows -)-1,255 1,029 -1,484 -308 -556 -3,657
1 January-March
Source: IMFandCentral Bank ofTurkey
30. Thecurrent account registered adeficit ofUS$6,380 million (3.6percentofGNP) in1993.
Thissharp deterioration wasoverturned in1994 withasurplus ofUS$2,830 million (2.1percent
ofGNP) andasurplus ofaround $440million inthefirstthreemonths of1995. Thetradegap,whichWT/BOP/W/6
Page7
increased by172percenttoUS$14,162 million, wasthemaincomponent ofthecurrent account deficit
in1993. Contraction indomestic demand following theintroduction ofthestabilization programme
ofApril 1994, anddepreciation oftherealexchange ratecontributed tothereduction ofthetradedeficit
bytwothirds in1994. Theexport-import coverage ratioof52percentin1993 roseto81percent
in1994. According todataforthefirstquarter of1995, theexport growth appears tobesustained
butthere isanacceleration ofthegrowth ofimports.
31. Thesurplus onservices andincome increased by66percentbetween 1990and1994toreach
US$4,057 million in1994, reflecting theimportance ofnetincome fromtourism andexports ofother
services, which amounted toUS$3,416 million andUS$2,150 million respectively. Inthetransfers
account theflowofworkers 'remittances atUS$2,631 million continued tocontribute positively to
thecurrent account balance andnetofficial transfers, which hadpeaked in1991 intheaftermath of
theGulfcrisis atUS$2,245 million in1991 were US$371 million in1994.
32. Inthecapital account themaincomponents oflong-term capital inflows in1993wereportfolio
investment anddisbursement ofcredits against theamortization payments ofmedium- andlong-term
debt, which jointly amounted toanoutflow ofUS$4.4 billion in1993 andUS$5.4 billion in1994.
Following thefinancial andexchange ratecrisis ofearly 1994, both disbursement ofcredits
(US$3,267 million) andnetdirect investment (US$482 million) fellin1994. Netportfolio investment
alsodropped toUS$1,001 million, aquarter ofthelevelof1993.
33. Short-term capital movements involve mainly foreign exchange credits received bythe
commercial banks andprivate sector trade credits. Thenetinflow ofUS$3,054 million in1993 was
followed byanoutflow ofUS$5,127 million in1994. Halfoftheoutflow in1994 wasreturned in
thefirstquarter of1995, mainly intheform oftrade credits.
34. Theoverall balance andreserve levels remained stable in1993 and1994. Gross reserves
including goldwereUS$8.6 billion atend-1994. Thecoverage ofimports ofgoods andservices rose
from2.5months atend-1993 to3.4months atend-1994 (IMF estimate). Gross reserves areestimated
at$12.7 billion attheendofthefirstquarter of1995 (Table 2).
Table 2
Official International Reserves
(inmillions ofUSdollars)
1990 1991 1992 1993 1994 1995
March
Special drawing rights 1 -- -- -- 1
Reserve position intheFund 46 46 44 44 47
Foreign exchange 6,003 5,098 6,115 6,228 7,121 11,292
Total reserves minus gold 6,050 5,144 6,159 6,272 7,169 11,292
Gold -national valuation 1,468 1,493 1,494 1,488 1,410 1,400
Total reserves 7,518 6,627 7,653 7,760 8,579 12,692
Memorandum items:
(Inmonths ofimports ofsame year)
Foreign exchange 2.5 2.1 2.4 1.9 2.8
Total reserves 3.2 2.8 3.0 2.5 3.4
Source: IMFandCentral Bank ofTurkey.WT/BOP/W/6
Page8
V. Composition andgeographical distribution oftrade ingoods
35. Rawmaterials andintermediate goods amounted to58percentofimports in1994, ofwhich
11percentwascrude oil.Theshare ofinvestment andconsumption goods accounted for30percent
and12percent,respectively. Metal products andmachinery (17percent), chemicals (11percent),
motor vehicles (10percent), ironandsteel(10percent), andelectrical appliances (8percent)were
themain import categories (Table 3).
Table 3
Commodity composition ofimports1
(US$ million andpercent)
1990 1992 1993 1994
Agriculture andLivestock 1,319 5.9 1,179 5.2 1,164 5.7 1,209 5.2
Mining andquarry product 3,989 17.9 3,054 13.3 3,041 10.3 2,969 12.8
Crude oil 3,519 15.7 2,632 11.5 2,250 8.7 2,432 10.5
Others 470 2.2 422 1.8 491 1.7 537 2.3
Industrial products 16,994 76.2 18,638 81.5 24,724 84.0 19,092 82.0
Processed agricultural
products1,401 6.3 1,139 5.0 1,280 4.4 1,029 4.4
Textiles 579 2.6 730 3.2 1,053 3.6 1,136 4.9
Forestry products 21 0.1 26 0.1 40 0.1 29 0.1
Hides andleather
products124 0.6 132 0.6 179 0.6 186 0.8
Chemicals 2,452 14.6 2,625 11.5 2,981 10.1 2,647 11.4
Petroleum products 805 3.6 865 3.8 1,075 3.7 974 4.2
Cement 45 0.2 18 0.1 18 0.1 12 0.0
Glass andceramics 182 0.8 196 0.9 217 0.7 179 0.8
Nonferrous metals 537 2.4 425 1.9 470 1.6 443 1.9
Ironandsteel 1,934 8.9 2,118 9.3 3,089 10.5 2,401 10.3
Metal products and
machinery3,860 17.3 4,178 18.3 5,390 18.3 3,864 16.6
Electrical appliances 1,570 7.0 1,746 7.6 2,012 6.8 1,767 7.6
Motor vehicles 1,603 7.2 2,239 9.8 4,046 13.7 2,162 9.3
Others 1,883 4.8 2,202 9.6 2,876 9.8 2,263 9.7
Total 22,302 100.0 22,871 100.0 29,429 100.0 23,270 100
1 Imports c.i.f., excluding nonmonetary goldandtransit trade.
Source: IMFandTurkish authorities for1994.
36.European Union countries continued tobethemain suppliers ofimports accounting forsome
44percentoftotalimports in1994. Countries intheMiddle EastandNorth Africa, with14percent
share ofthetotal, areprimarily suppliers ofpetroleum andpetroleum products. Theshare ofimports
from theEastern European countries roseto10percentin1994 (Table 4andChart 1).WT/BOP/W/6
Page9
Table 4
Sources ofimports, 1990-1994
(US$million andpercent)
1990 1991 1992 1993 1994 UptoMarch
1995
Value % Value % Value % Value % Value % Value %
World 22,300 100 21,047 100 22,871 100 29,429 100 23,268 100 6,853 100
Europe 12,729 57 12,462 59 13,665 60 17,924 61 14,037 60 4,109 60
-Western Europe 10,521 47 10,438 50 11,447 50 14,601 50 11,476 49 3,198 46
-EC12 9,354 42 9,223 44 10,049 44 12,949 44 10,278 44 2,871 42
-Germany 3,522 16 3,232 15 3,754 16 4,533 15 3,645 16 1,004 15
-Italy 1,727 8 1,845 9 1,919 8 2,558 9 2,008 9 525 8
-France 1,340 6 1,226 6 1,351 6 1,952 7 1,458 6 351 5
-United Kingdom 1,014 4 1,166 5 1,187 5 1,546 5 1,170 5 339 5
-Netherlands 573 3 642 3 698 3 870 3 740 3 209 3
-Belgium-
Luxembourg523 2 557 3 551 2 683 2 532 2 166 2
-Spain 345 1 321 1 320 1 431 1 380 2 110 2
-EFTA 1,167 5 1,215 6 1,399 6 1,652 6 1,198 5 327 5
-Switzerland 536 2 489 2 688 3 650 2 472 2 128 2
-Sweden 214 1 257 1 222 1 428 1 283 1 84 1
-Austria 252 1 322 1 282 1 319 1 211 1 59 1
Former USSR 1,247 6 1,097 5 1,245 5 2,284 8 1,834 8 680 10
-Russian Federation ... ... ... ... 1,041 5 1,542 5 1,005 4 388 6
-Others ... ... ... ... 204 1 742 2 789 3 292 4
-Ukraine ... ... ... ... 90 0 473 2 535 2 184 3
-Uzebekistan ... ... ... ... 21 0 32 0 79 0 22 0
-Turkmenistan ... ... ... ... 21 0 77 0 66 0 43 1
-Kazakhstan ... ... ... ... 10 0 44 0 32 0 15 0
-Georgia ... ... ... ... 6 0 22 0 26 0 11 0
-Moldova ... ... ... ... 2 0 29 0 20 0 1 0
Eastern Europe 700 3 779 4 849 4 968 3 671 3 196 3
-Romania 202 1 199 1 256 1 301 1 229 1 78 1
-Bulgaria 32 0 140 1 224 1 243 1 195 1 69 1
America 3,017 13 2,850 13 3,120 14 4,037 14 2,924 13 916 13
-USA 2,282 10 2,255 11 2,600 11 3,351 11 2,430 10 746 11
-Brazil 174 1 218 1 199 1 251 1 206 1 66 1
Middle East 2,715 12 2,497 12 2,656 12 2,811 10 2,540 11 701 10
-Saudi Arabia 724 3 1,829 9 1,665 7 1,500 5 1,229 5 328 5
-Iran, Islamic Rep. 492 2 90 0 365 2 667 2 692 3 190 3
-United Arab
Emirates192 1 366 2 354 1 314 1 339 1 29 0
Africa 1,338 6 750 4 808 3 715 2 859 4 277 4
-Northern Africa 938 4 481 2 575 2 381 1 628 3 232 3
-Algeria 287 1 52 0 10 0 23 0 95 0 108 2
-Libya 487 2 281 1 445 2 131 0 320 1 85 1
-Egypt 37 0 48 0 59 0 105 0 124 0 26 0
Asia 2,356 11 2,355 11 2,432 11 3,579 12 2,258 10 712 10
-EastAsia 2,169 10 2,176 10 2,262 10 3,284 11 2,093 9 637 9
-Japan 1,120 5 1,092 5 1,113 5 1,621 5 967 4 235 3
-Korea, Rep. 302 1 360 2 373 2 621 2 285 1 88 1
-China 246 1 172 1 172 1 255 1 258 1 100 1
-Taiwan 192 1 188 1 200 1 288 1 189 1 65 1
Oceania 146 1 131 1 158 1 281 1 320 1 67 1
-Australia 104 0 102 0 113 0 206 1 226 1 42 1
Source: UNSTAT, Comtrade database andState Planning Organization ofTurkey.WT/BOP/W/6
Page10
37.Theshare ofindustrial exports intotal exports steadily increased inthelastfiveyears to
84.9percentofthetotalin1994. Textiles andclothing (35percent), ironandsteel products
(13percent), agricultural crops, including hazelnuts, raisins, tobacco, cotton andothers (12percent),
processedagriculturalproducts(10percent)electricalappliances(4percent),hidesandleatherproducts,
metal products andmachinery, chemicals andmotor vehicles (3percenteach) werethemain export
categories in1994 (Table 5).WT/BOP/W/6
Page11
Table 5
Commodity composition ofexports1
(US$ million andpercent)
1990 1992 1993 1994
Agriculture andlivestock 2,347 18.8 2,204 15.0 2,365 15.4 2,457 13.6
Crops 2,062 15.9 1,999 13.6 2,014 13.1 2,141 11.8
Hazelnuts 453 3.5 291 2.0 413 1.9 496 2.7
Raisins 151 1.2 129 0.9 134 0.8 176 1.0
Tobacco 417 3.2 309 2.1 396 2.0 395 2.2
Cotton 161 1.2 46 0.3 145 0.3 31 0.2
Others 882 6.8 1,224 8.3 926 6.0 1,044 5.8
Livestock products 216 1.6 140 1.0 294 1.9 244 1.3
Fishery products 57 0.4 50 0.3 44 0.3 53 0.3
Forestry 12 0.1 14 0.1 14 0.1 16 0.1
Mining andquarry products 332 2.6 264 1.8 239 1.6 272 1.5
Industrial products 10,281 79.3 12,247 83.2 12,741 83.0 15,377 84.9
Processed agricultural products 941 7.3 1,337 9.1 1,369 8.9 1,765 9.7
Textiles 4,061 31.3 5,268 35.8 5,421 35.3 6,286 34.7
Forestry products 21 0.2 28 0.2 23 0.1 41 0.2
Hides andleather products 749 5.8 568 3.9 552 3.6 560 3.1
Chemicals 616 4.8 491 3.3 468 3.0 576 3.2
Petroleum products 287 2.2 231 1.6 172 1.1 235 1.3
Cement 0.6 139 0.9 90 0.6 145 0.8
Glass andceramics 77 2.5 395 2.7 380 2.5 431 2.4
Nonferrous metal 326 2.0 164 1.1 173 1.1 215 1.2
Ironandsteel 262 12.4 1,558 10.6 2,011 13.1 2,369 13.1
Metal prod. &machinery 1,612 1.8 398 2.7 393 2.6 591 3.3
Electrical appliances 231 3.4 591 4.0 566 3.7 682 3.8
Motor vehicles 440 1.6 382 2.6 380 2.5 503 2.8
Others 448 3.4 697 4.7 744 4.8 978 5.4
Total 12,959 100.0 14,715 100.0 15,344 100.0 18,106 100.0
1 Exports f.o.b. excluding transit trade.
Source: IMFandTurkish authorities for1994.
38.European Union countries remain Turkey 'smainexport market, with45.7percentofthetotal,
although theshare ofexports totheUnited States, andtothecountries oftheformer Soviet Union
increased in1994 (Table 6andChart 2).WT/BOP/W/6
Page12
Table 6
Destination ofexports
(US$million andpercent)
Partner 1990 1991 1992 1993 1994 UptoMarch
1995
Value % Value % Value % Value % Value % Value %
World 12,959 100 13,593 100 14,715 100 15,349 100 18,105 100 4,757 100
Europe 8,514 66 8,785 65 9,562 65 9,622 63 11,159 62 3,136 66
-Western Europe 7,523 58 7,633 56 8,232 56 7,850 51 8,914 49 2,550 54
-EC12 6,906 53 7,042 52 7,601 52 7,293 47 8,271 46 2,393 50
-Germany 3,077 24 3,413 25 3,660 25 3,654 24 3,934 22 1,170 25
-Italy 1,106 8 972 7 943 6 750 5 1,034 6 318 7
-United Kingdom 745 6 676 5 796 5 835 5 889 5 229 5
-France 737 6 689 5 809 5 771 5 851 5 230 5
-Netherlands 435 3 475 3 500 3 517 3 621 3 178 4
-Belgium-
Luxembourg312 2 287 2 290 2 295 2 371 2 98 2
-Spain 199 1 238 2 299 2 199 1 234 1 72 1
-EFTA 617 5 591 4 632 4 558 4 643 4 157 3
-Austria 178 1 213 2 229 2 227 1 249 1 60 1
-Switzerland 293 2 246 2 223 1 216 1 239 1 51 1
-Eastern Europe 298 2 443 3 531 4 622 4 751 4 207 4
-Poland 103 1 141 1 186 1 235 1 249 1 41 1
-Romania 83 1 105 1 173 1 152 1 175 1 69 1
-Bulgaria 10 0 76 1 72 0 86 1 134 1 32 1
Former USSR 531 4 611 4 686 5 1,048 7 1,423 8 340 7
-Russian Federation ... ... ... 442 3 505 3 820 4 192 4
-Others ... ... ... 244 2 543 3 603 3 148 3
-Azerbaijan ... ... ... 102 1 68 0 132 1 27 1
-Kazakhstan ... ... ... 19 0 68 0 132 1 37 1
-Turkmenistan ... ... ... 7 0 84 0 84 0 12 0
-Ukraine ... ... ... 36 0 39 0 76 0 27 1
-Georgia ... ... ... 12 0 34 0 67 0 9 0
-Uzbekistan ... ... ... 54 0 213 1 64 0 16 0
America 1,077 8 1,039 7 987 7 1,138 7 1,739 10 450 9
-USA 968 7 913 7 865 6 986 6 1,520 8 395 8
Middle East 1,784 14 1,982 15 2,119 14 2,142 14 2,239 12 571 12
-Saudi Arabia 338 3 484 4 486 3 652 4 609 3 137 3
-Syrian Arab Rep. 194 1 264 2 216 1 239 2 254 1 55 1
-Iran, Islamic Rep. 495 4 487 4 455 3 290 2 250 1 80 2
-United Arab Emirats 75 1 76 1 97 1 129 1 185 1 51 1
-Israel 46 0 79 1 90 1 80 0 178 1 47 1
-Lebanon 51 0 90 1 99 1 100 1 161 1 46 1
-Iraq 214 2 122 1 212 1 160 1 141 1 16 0
Africa 748 6 810 6 782 5 696 4 837 5 231 5
-Northern Africa 646 5 692 5 635 4 597 4 723 4 197 4
-Algeria 201 2 206 1 108 1 82 0 238 1 82 2
-Egypt 160 1 168 1 173 1 191 1 194 1 44 1
-Libya 220 2 237 2 246 2 246 2 180 1 45 1
Asia 780 6 922 7 1,148 8 1,543 10 1,633 9 268 6
-EastAsia 654 5 798 6 1,044 7 1,451 9 1,465 8 234 5
-China 37 0 20 0 147 1 512 3 355 2 8 0
-Hong Kong 35 0 29 0 48 0 118 1 236 1 80 2
-Japan 239 2 226 2 162 1 158 1 186 1 31 1
-Singapore 33 0 59 0 98 1 121 1 185 1 24 0
-Taiwan 110 1 68 0 239 2 311 2 181 1 40 1
Source: UNSTAT, Comtrade database andState Planning Organization ofTurkey.WT/BOP/W/6
Page13
VI.External Debt
39.Thetotaloutstanding external debtincreased by21percentin1993 toUS$65,356 million.
Notwithstanding theslight dropin1994, thestock ofdebtstood atUS$71,581 million inMarch 1995.
Theratiooftotaldebtstock toGNP atend-1994 was49.9percent. In1994, more than80percent
ofthedebtwasmedium- andlong-term; 88.7percentofthemedium- andlong-term debtwasborrowed
bythepublic sector, compared to11.8centbytheprivate sector. Themainsources oflending were
theOECD countries (29percent), bondissues (21percent)andthemultilateral agencies (14percent).
Atpresent theaverage maturity ofdebtis12.5 years andtheaverage effective interest rateis
8.0percent. Total debtservice amounted toUS$9,217 million in1994ofwhich US$3,860 million
wereinterest payments, leading toadebtservice ratiotocurrent account receipts (excluding interest
andofficial transfers) of30.1percent.