161 Investment Guide for Southeast Europe 2004 Turkey I Economic overview 1 1 General economic indicators 1997 189 3 079 7 5 10 9 99 1 6 7 2 638 1998 205 3 255 3 9 0 9 69 7 6 8 1 984 1999 199 2 879 4 7 5 2 68 8 7 7 1 360 2000 202 2 986 6 9 5 5 39 0 6 6 9 819 2001 156 2 160 7 4 8 9 68 5 8 4 3 396 2002 183 2 584 7 8 9 2 29 7 10 3 1 481 8 Gross external debt stock USD bln 9 Base interest rate 10 Foreign exchange reserves USD mln 84 24 96 5 18 610 96 41 95 5 19 718 102 98 46 7 23 177 118 68 45 6 25 097 113 80 62 5 18 892 131 40 48 2 27 006 11 Exchange rate of TL for 1 USD end of year 204 750 312 720 540 098 671 765 1 439 567 1 634 501 1 2 3 4 5 6 7 Indicators GDP USD bln GNP per capita current prices USD GDP growth rate Industrial production growth rate Annual inflation rate Annual unemployment rate Current account balance USD mln Source Undersecretariat of Treasury Central Bank of Turkey State Institute of Statistics 1 2 Foreign trade 1 2 1 Foreign trade regime and major regulations The most significant feature of Turkey s foreign trade policy is the Customs Union established between the EU and Turkey on 1 January 1996 This event has initiated the process of achieving legal infrastructural consistency of the foreign trade strategy with the EU norms and thus both import and export regimes have been made consistent with the EU regulations 1 2 2 Customs regime export and import quota and license system tariffs The Import Regime Decree which has come into force on 1 January 2003 has been designed taking into consideration the WTO regulations the Customs Union Agreement between Turkey and the EU the free trade agreements with various countries the preferential treatments granted under the Generalized System of Preferences GSP to the least developed countries and some developing countries and also the needs of the agricultural and industrial sectors in accordance with the objectives determined by the national and regional development plans and annual programmes Turkey has started applying GSP along with the Import Regime of 2002 for 2 456 products in order to make a progress in complying with the provisions of the Customs Union with the EU regarding Turkey s undertaking to adapt EU s GSP meet the needs of the industry for raw materials and semi finished goods and increase the competitive power of industry in international trade The product coverage of GSP has been increased to 2 884 products by the Import Regime of 2003 The Customs Union enforced on 1 January 2001 has initially covered all industrial products and processed agricultural products which in value corresponds to 93 of the trade between EU and Turkey in 1995 Traditional agricultural products will be included in the Customs Union following Turkey s acceptance to the EU s Common Agricultural Policy Both parties ensure identical treatment to their imports from third countries since the EU and Turkey constitute the same customs territory in the trade with industrial products Turkey does not apply any quantitative restrictions outside of the textile quotas 1 2 3 Exports and imports USD bln 1996 1997 1998 1999 2000 2001 2002 Exports 23 2 26 3 27 0 26 6 27 8 31 3 35 8 Imports 43 6 48 6 46 0 40 7 54 5 41 4 51 2 Source Undersecretariat for Foreign Trade 1 2 4 Major trade partners Major export partners for the period January June 2003 have been Germany 16 2 UK 7 5 Italy 7 1 USA 8 3 France 5 8 Spain 3 9 Netherlands 3 2 Russia 2 7 and Israel 2 2 Major import partners for the period January June 2003 have been Germany 12 7 Italy 8 0 Russia 7 4 France 5 7 USA 5 4 Switzerland 4 5 UK 5 3 China 3 4 Spain 2 7 Japan 2 7 Iran 2 7 Netherlands 2 4 and Belgium 2 2 162 Investment Guide for Southeast Europe 2004 Turkey 1 2 5 Structure of foreign trade by regions 1 2 6 Structure of foreign trade by commodities Source Undersecretariat for Foreign Trade Source Undersecretariat for Foreign Trade Source Undersecretariat for Foreign Trade Source Undersecretariat for Foreign Trade Investment Guide for Southeast Europe 2004 Turkey 1 2 7 Major bilateral and multilateral trade agreements Turkey has a Customs Union with the EU Also it has concluded Free Trade Agreements FTA with EFTA Israel Hungary Romania Czech Republic Slovakia Latvia Lithuania Estonia Slovenia Bulgaria Poland Macedonia Croatia Tunisia Morocco Palestine Albania Egypt and Faeroe Islands Draft texts of agreements have been prepared for FTAs with Jordan Malta South Africa and Mexico 1 2 8 Free zones Free Zones are defined as special sites within the country but deemed to be outside the customs territory They are regions where the valid regulations related to foreign trade and other financial and economic areas are not applicable or are partly applicable or new regulations are tested in Free Zones are also the regions where more convenient business climate is offered in order to increase trade volume and exports for some industrial and commercial activities as compared to the other parts of the country Free Zones are regulated by the Free Zones Law No 3218 1985 It aims at increasing export oriented investment and production in Turkey accelerating the entry of foreign capital and technology procuring the inputs of economy in an economic and orderly fashion and increasing the utilisation of external finance and trade possibilities In general all types of activities can be performed in the Turkish Free Zones such as manufacturing storing packing general trading banking and insurance Investors are free to constructing their own premises while the zones also have available office space workshops or warehouses on a rental basis under attractive conditions All fields of activities open to the Turkish private sector are also open to joint ventures of foreign companies The Turkish Free Zones are tax free Income generated through commercial activities in the Zones is exempted from all kinds of taxes including income corporate and value added tax The validity period of an operating licence is maximum 10 years for tenant users and 20 years for users who wish to build their own working spaces in the zone If the operating licence is for production these terms are 15 and 30 years for tenant users and investors respectively Free Zone earnings and revenues can be transferred to any country including Turkey freely without any prior permission and are not subject to any taxes duties and fees There is no limitation on the proportion of foreign capital participation in investment within the Free Zones Trade conducted
View Full Document
Unlocking...