Turkish Forum

Tag: Customs Union

  • Turkey urges E.U. to restructure the terms of the current Customs Union

    Turkey urges E.U. to restructure the terms of the current Customs Union

    Turkey has urged the European Union to restructure the terms of the current Customs Union, or cancel the Customs Union altogether and make a separate free trade deal with Turkey.

    “If this system aggrieves us then we tell the European Union: Let’s revise this system, lift the visas, lift the quotas on our goods and say ‘Turkey is also a side in this deal,’ while making free trade deals with other countries. Or we could leave the Customs Union and you could make a free trade deal with us,” Turkish Economy Minister Zafer Çağlayan told daily Hürriyet.

    The minister was expressing his concerns over the damage that the EU’s free trade deals with other countries has on the Turkish economy, triggered by the possibility of the EU signing deals with the world’s largest economies, the United States and Japan.

    The U.S. and EU launched moves on Feb. 13 to open negotiations on a new free trade pact, while Japan and EU have reached a separate agreement to kick-off talks on a comprehensive cooperation, including the elimination of barriers and restrictions on trade.

    The free trade agreement between the EU and third parties enables these other countries’ goods to enter European markets or Turkish markets via Europe with zero duties, but the decision to provide the same privileges to Turkey is up to the discretion of the third party. Turkey is the only non-EU country included in the Customs Union.

    Prime Minister Recep Tayyip Erdoğan has sent a letter to U.S. President Barack Obama to encourage Washington to continue talks with Turkey for a free trade agreement simultaneously with the EU.

    Gearing up its efforts to prevent the neglecting of Turkey in the process, the government and Turkish businessmen have been pressuring the United States to make a separate deal with Turkey, but Çağlayan’s recent remark indicates that Ankara also has another potential path to follow.

    “The Customs Union has begun to work completely against Turkey. Under these circumstances, to switch to a Free Trade Deal would be more in line with Turkey’s interests,” Çağlayan said during a meeting of automotive industrialists on March 27.

    Since Turkey is the demanding side, the opposite party is asking for a number of compromises that put Turkey in a disadvantageous situation, the minister said.

    South Africa, Mexico and Algeria are all countries that have inked free trade deals with the European Union in the last 10 years.

    In 2012, Turkey bought $1.3 billion worth of goods from South Africa, while selling only $382 million. It bought $867 million worth of products from Mexico during the same period, but sold $206 million. It exported $1.8 million worth of goods to Algeria while importing $2.6 billion, according to figures provided by Çağlayan.

    Hurriyet Daily News

  • Customs Union Issues

    Customs Union Issues

    Mikhail Kozlov Deputy Director of Operative Department on Customs Services AsstrA Associated Traffic AG
    Mikhail Kozlov Deputy Director of Operative Department on Customs Services AsstrA Associated Traffic AG

    Development of the customs union is approaching the next landmark — actual formation of the unified customs territory of Belarus, Kazakhstan and Russia.

    Starting from July 1, 2011, customs control on the inner borders of the three countries will be abolished; veterinary, phytosanitary and transport control will be moved to the CU’s external borders. As of Jan. 1, 2011, there are unified forms and instructions on declaring goods.

    At the same time there are still unsolved problems connected with the functioning of the unified customs territory:

    1) The uniform application of international customs conventions. The agreement on TIR convention applications on the CU territory has not yet been signed because of the position of Kazakhstan that lies in the possibility of TIR procedures being applied for international goods transportation on the CU territory. At present by TIR procedure Kazakh carriers perform a great volume of cargo transportation from the Chinese-Kazakh border to Russia and Belarus. Unfortunately, in the CU customs code there is no analogue and quite simple guarantee system that can be used instead of the TIR procedure.

    Kazakhstan still has not joined the Istanbul convention on temporary import/export of goods, which is why the agreement on the application of this convention on the CU territory was not even developed. Meanwhile Belarus and Russia have not yet solved the problem of guaranteeing transportation of goods through the territory of Belarus to Russia by the Belarussian Chamber of Commerce and Industry.

    2) In the CU customs code the principle of residence is left for regular people participating in customs declaration in the CU: customs applicant of the customs procedure, customs representative and authorized economic operator, which makes the process of logistics optimization of commodity flows at the unified customs territory. For example, a freight forwarder of FLLC AsstrA Weisrussland — an approved economic operator in Belarus — cannot conduct the procedure of customs transit to Russia or Kazakhstan without payment of customs duties, taxes under his status of the AEO. Russian trade operator Perekryostok cannot put goods under the customs procedure of transfer for free turnover in Belarus in the immediate vicinity from the CU external border at TLC Brest-Beltamozhservice. With this purpose he has to register a residential company in Belarus.

    3) In the field of tariff regulations there are no unified trade rules of procedure and impressments of country-members of the CU with third countries. In Kazakhstan there are still transitional rates of customs duties by 400 commodity items, different from the rates of the CU customs duties. In customs services of the CU, the indicatives for application of additional measures of documental control by determination of customs prices of goods differ.

    4) In the field of non-tariff regulations there is the burning issue of developing unified technical rules of procedure for technical regulation. Belarus and Kazakhstan are against the transfer of veterinary control functions to the customs bodies at the border, which comes into force in Russia from July 1, 2011.

    We would like to mark the problem of absence of actual simplifications in the work of customs representatives in the process of declaring goods, of a higher level of trust on the part of the customs officials to their work, despite quite a big size (1 million euros) of provision of customs duty payment.

    The unified instruction for the CU on CMR note filling-in was developed as a simple sum of national instructions, it requires indication of the information not only for purposes of tariff and non-tariff regulation, statistics of foreign commerce and currency exchange regulations, but also the information necessary for different bodies of public administration, and that is why it is quite difficult and labor-intensive. All these factors led to the increase of prices for the services of customs representatives.

    via Customs Union Issues | The Moscow Times.