Turkey, like other countries, uses some trade policies to protect the interests of its domestic producers, to prevent unfair competition through imports, that is, to prevent them from being damaged. In this context, the World Trade Organization was established to determine and implement international trade regulations and Turkey is one of the founding members. In the meantime, special legislation on the prevention of unfair competition in imports has been created and is being used effectively. In this article, international trade restrictions will be mentioned in order to prevent unfair competition within the framework of international agreements and the law in Turkey.
STATUS OF WORLD TRADE ORGANIZATION
The World Trade Organization was established in 1995, based in Geneva, as the legal and institutional basis of the international trade system. The World Trade Organization is the center of the multilateral trade system and defines international trade rules. The main purposes of the relevant organization can be listed as; eliminating barriers to international trade, providing transparency of trade rules, and facilitating trade transactions. The current number of members for the organization is 164 and Turkey is one of the founding members.
Member states of the World Trade Organization are obliged to adapt their laws and regulations in accordance with the General Agreement on Tariffs and Trade 1994 and this is one of the most basic considerations. The aforementioned agreement is also called the World Trade Organization Anti-Dumping Agreement.
TERM OF DAMPING AND ANTI-DAMPING
Turkey, like other countries, uses trade policies to protect the interests of its producers, to prevent unfair competition through imports. One of them is the concept of anti-dumping. Before addressing the concept of anti-dumping, we consider that it will be useful to examine what dumping is.
According to the Law on The Prevention of Unfair Competition in Imports numbered 3577, published in the Official Gazette in 01.07.1989, the concept of dumping is defined as the fact that the export price of a good to Turkey is below the normal value of a similar good. In other words, a firm’s sale of its goods on the foreign market at a lower price than the domestic market can be referred to as dumping. In the concept of dumping, there is a comparison, and this comparison is made over the export price of a product and the local market price of a similar product in the exporting country. However, the part where the normal value exceeds the export price is called the margin of damping.
Competent authorities may take measurement of anti-dumping in order to prevent or compensate for dumping. Here, the competent authorities take appropriate measures, taking into account the presence and impact of dumping and the threat of damage or damage, as well as casual relation between them. The tax amount to be created in order to prevent dumping can be determined both retrospectively and prospectively.
To give an example, the last Announcement on Prevention of Unfair Competition in Imports was published by the Ministry of Commerce on January 9, 2021. With this decision, the final review investigation carried out by the Turkish Ministry of Commerce, General Directorate of Import for the “Others, polyester” product under the 5402.47 customs tariff heading of China, India, and Malaysia was completed and put into effect. According to the relevant decision, it has been determined that if the existing measures are withdrawn, the dumping and damage are likely to continue or occur again. In this context, with the Communiqué on the Prevention of Unfair Competition in Imports published in the Official Gazette dated 6/10/2014 and numbered 29147, the same amount for India and Malaysia; for the China, it has been decided to continue its implementation by changing it.
Contributions are given by the state in order to relieve the domestic market called Subvention. The aids made here can be described as the beneficial, direct or indirect financial contribution of the country of origin or exporting, or any income or price support within the framework of article XVI of GATT 1994. Examples of subventions include the state giving interest-free loans to producers in production, giving incentive premiums to export companies, tax exemptions to enterprises, providing assistance per produced goods, tax exemptions or advantages.
The subvention is divided into forbidden and permissible. The prohibited subventions can be summarized as direct ones for exports, there are certain exceptions in this regard for developing countries and underdeveloped countries. Permissible subventions, on the other hand, may qualify as those that fall outside the prohibited subventions.
For the subsidy to exist, there must be a financial advantage provided by a public authority about producers and commercial interest. In case the subsidy is detected, compensatory tax practices can be initiated. Compensatory measures related to subsidies are discussed in the Subsidies Committee, which is represented by members of the World Trade Organization.
CONDITIONS FOR TAKING MEASURES AGAINST DUMPING OR SUBSIDIZED IMPORTS
If we state the situations that require taking precautions, we may specify them as dumping or subsidizing imports that cause material damage in a production branch in Turkey or pose a threat of material damage or physically delay the establishment of a production branch. However, in order to be able to take measures against the imports subject to subsidies, it should also be determined that the subsidy is for a firm or a group of firms or a group of production branches or production branches within the framework of Article 2 of the Agreement on Subsidies and Compensatory Measures. Therefore, first of all, dumping and subvention should be existing, and then this dumping and subvention should cause damage in the production branch. It is important that there is a causal link between them.
The General Directorate of Imports may conduct a dumping or subsidy reviews upon complaint or if necessary. Manufacturers who claim that they suffered material damage or under threat of material damage from imports subject to dumping or subsidies or that such imports physically delay the establishment of a production branch can apply to the General Directorate in writing.
An investigation is opened if there is sufficient evidence of the existence of dumping or subsidized imports and the damage caused by this import as a result of the ex-officio or complaint. Procedures and principles related to complaints, investigations and examinations are determined by the regulation.
With the Decree Number 99/13482 on Prevention of Unfair Competition in Imports; As a result of the suspension of the measures due to the temporary change in market conditions, the implementation of the measures in force for at least one year can be temporarily suspended for 9 months with the decision of the Board and the approval of the Ministry. Issues to be considered while making the relevant decision; provided that the damage in the domestic production branch is not likely to continue or recurrence and the opinions of the relevant producers are also taken into account. It has been arranged that this period can be extended for one more year at most.
By adding to the regulation regarding the decision numbered 3113 published as the President’s Decree on 22.10.2020, the measures in force regarding the import of a product that has been subject to a safeguard measure within the scope of the legislation on Protection Measures in Import, provided that the protection measure remains in effect, the Board’s Decision and the approval of the ministry It is regulated that they can be suspended partially or completely and their type can be changed. With the amendment, it has been stipulated that the decisions to be taken in this direction will be valid prospectively starting from the effective date, and an amendment has been made in the sense that the refund of previously made collections cannot be requested.
SAFEGUARD MEASURES OTHER THAN DUMPING AND SUBSIDIZED IMPORTS
In addition to the measures taken against dumping and subvention, other measures of conservation can be taken on the purpose of preventing unfair competition in imports and protecting the domestic producer.
In the event that a product is imported in increasing quantities and conditions in a way that creates serious damage or threat of serious damage to producers producing similar or directly competing goods and this situation can be explained by concrete evidence, temporary protection measures can be taken within the scope of the relevant harm or threat of harm. In order to prevent this unfair competition, the protection measure can be applied in the form of an increase in customs duties applied on the import of goods, quantity limitation, custom gate determination, the introduction of additional fiscal charges, the application of tariff quotas or the use of the combinations specified here together.
What we have described so under international trade restrictions in Turkey, international treaties and legislation is evaluated in light of our country are being used effectively on behalf of limitations to prevent unfair competition.
Melodi Olcay Keskiner, Attorney At Law