QUOTA MANAGEMENT SYSTEM

Durkan COŞKUN
Customs Consultant

Throughout history, trade has been one of the most important activities of humanity. States that saw that their survival was possible with the existence of trade also supported this activity. States were not satisfied with this and made efforts to direct trade. In today's world dominated by the global economy, it is obvious that countries are commercially dependent on each other. World trade continues to exist as a chain of interdependent relationships. While each state accepts being a link in the global economic chain, it is also concerned about protecting its domestic market and producers. As a result of these concerns, states are trying to protect their economies from global winds with some protection measures such as "quota".

Quota is a limitation by the government in terms of quantity or value of the amount of goods that will be allowed to be imported in international trade for a certain period. There are differences in the quota practices of countries. The first type of quota is the so-called “global quota”. In the global quota application, there are restrictions on the products in terms of quantity and value, but there are no restrictions on the users of the quota applications. In this system, after the quotas on the products are announced, the importers who act early have a large share in the quota system, while the share of those who apply late may be small. The second quota system is the “allocated quota” system. In this system, companies that want to get a share from the quota are evaluated according to criteria such as production, employment and capacity, and the distribution is determined accordingly. The third quota system is the "customs tariff quotas" system. In this system, quotas are placed on products in terms of quantity and value in a certain period. After the tariff quota is reached, the import of the product is stopped completely.

The state aims to protect domestic producers and improve employment opportunities in accordance with the material policy it follows. Import of some product items may put domestic producers in a difficult situation. For example, if furniture imports increase excessively, domestic companies producing the same quality may be in a difficult situation. In such cases, the state can resort to “quota” application as a non-tariff barrier.

While the state can implement quota measures ex officio, it can also apply quotas for some products by evaluating the applications made by domestic producers.

In accordance with the "Decision on Quota and Tariff Quota Administration in Imports" numbered 2010/339, to determine the procedures and principles of application, distribution and use of quotas and tariff quotas, to conduct negotiations within the framework of the relevant legislation and to prepare reconciliation texts, to implement these texts duly put into effect, when necessary. The Ministry of Commerce is authorized to suspend the distribution of quotas and tariff quotas, to conduct or have examinations regarding imported goods and the accuracy of the declaration made, to ensure coordination among relevant institutions and organizations regarding the implementation and to give instructions, and to issue communiqués on this matter. In the decision numbered 2010/339, the definition "quota refers to the amount and/or value of imports allowed for a certain period". The same decision also includes the definition of "tariff quota (tariff quota) refers to the amount or value of imports for which customs duties and/or other financial burdens are reduced or exempted for a certain period." The World Trade Organization warns countries to completely remove the non-tariff barriers imposed by member countries against each other within the framework of the GATT Agreement within a certain period of time. In this context, in order not to be subject to any notice through this international organization, Turkey does not resort to direct quantity quotas and introduces "tariff quota" practices, which are considered a lighter non-tariff barrier. Thus, the last quantity quota applied by Turkey came into force with the "Communiqué on the Distribution and Management of the Second Part of the Quotas for Textile Products for which a Quota is Applied within the Scope of the Unilateral Control System", numbered 2009/5, published in the Official Gazette numbered 27255 dated 11.06.2009. This is the actual situation. However, it is possible for a domestic producer to apply to the Ministry of Commerce stating that it can only be protected by a quantity quota. In such cases, the application is evaluated at the General Directorate of Imports and the Ministry is informed about the issue. If the political will is formed on this issue, it is possible to apply a quantity quota to the import of any product.

Source:

Decision No. 2010/333 on Import Quota and Tariff Quota Management (Official Gazette No. 27599 dated 02.06.2010)

"Communiqué No. 2009/5 on the Distribution and Management of the Second Part of the Quotas for Textile Products for which Quotas are Applied within the Scope of the Unilateral Control System" (Official Gazette No. 27255 dated 11.06.2009)

“The Role of Non-Tariff Measures in International Trade: A Research on the Turkish Textile Sector” Bilge Leyli Elitaş, Ayberk Şeker, Journal of Accounting and Finance April/2017

ticaret.gov.tr ​​(Ministry of Commerce Web Portal)

wto.org (World Trade Organization Web Portal)

QUESTIONS AND ANSWERS

Question 1. What is the difference between “Quota” and “Tariff Quota/Tariff Quota”?

Answer: Quota refers to the amount and/or value of imports allowed in a country for a certain period. Tariff quota (tariff quota) refers to the amount or value of imports for which customs duties and/or other financial burdens are reduced or exempted in a country for a certain period.

Question 2. Which organization is authorized to impose quotas on foreign trade?

Answer: According to the "Decision on Quota and Tariff Quota Administration in Imports" numbered 2010/339, the authority to impose quotas has been given to the Ministry of Commerce.

Question 3. What data are taken into account in quota implementation research?

Answer: In the examination to be carried out on the course of imports and the conditions of realization and whether domestic producers have suffered or are threatened to suffer serious damage as a result of this import, the following factors are taken into account: a) The volume of imports/exports, in absolute numbers in imports or according to domestic production or consumption whether there is a relative increase, b) Import/export prices, whether there is a significant price decrease compared to the price of similar or directly competing goods produced by domestic producers, c) Production, productivity, capacity utilization, sales, market share, profit/loss and The impact of developments in certain economic indicators, such as employment, on domestic producers of similar or directly competing goods.

Question 4. How does the World Trade Organization approach "quota" practices?

Answer: The World Trade Organization warns countries to completely remove the non-tariff barriers imposed by member countries against each other within a certain period of time within the framework of the GATT Agreement. In this context, the Organization also opposes countries applying quotas to each other.

Question 5. Is there a "quota practice" still in force in Turkey?

Answer: No, there is not. In order not to be subject to any notice through the World Trade Organization, Turkey does not directly apply quantity quotas and introduces "tariff quota" practices, which are considered a lighter non-tariff barrier. Thus, the last quantity quota applied by Türkiye was the textile quota applied in 2009.