Wto Trade Resolution Procedures

WTO Trade Dispute Resolution: Turkey Cotton Case

In the case at hand, we would discuss the trade and economic policies of Turkey. In the case that would be discussed, India is the complainant and Turkey is the respondent. The case was presented to and the World Trade Organization was approached by India on 13 February 2012. The case pertains to India's complaint against Turkey for adopting protectionist policies with regards to the import of cotton to the country. India approached the WTO and requested for consultations with Turkey with regards to some specific safeguard measures that was imposed by Turkey on imports of cotton yarn with the exception for sewing thread from India.

Turkey had started this protectionist and definitive safeguard measures on cotton import to that country from 15 July 2008 and it was meant to be implemented for a period of three years. India complained that Turkey had imposed the measured in a retroactive manner and extended the period of application of the protectionist tax impositions retroactively. India also challenged any amendments and replacements in this act and any other related acts and measures formulated and imposed by Turkey.

One of the specific charges made by India according to the WTO records is that Turkey did not make a required determination for the relevant review and hence a recommendation for the extension of the protectionist measures. India alleged that Turkey had acted in opposition to its obligations under the WTO Agreement on Safeguards. Concerning the extension of the safeguard measures, India believes that Turkey imposed the extension of the measures prior to making a determination, contrary to its obligations under the Agreement on Safeguards.

Turkey was alleged to have violated Articles 2, 2.1, 3, 3.1, 4, 4.1(c), 4.2(a), 4.2(b), 4.2(c), 5, 5.1, 6, 7, 7.1, 7.2, 7.3, 7.5, 8, 12 and 12.1(c) of the Agreement on Safeguards and Article XIX:1(a) of the GATT 1994.

The complaint was resolved by the WTO to the extent that it ordered both the parties to start negotiations within a period of 60 days failing which India had the option of approaching the WTO for redress of the dispute against Turkey.

WTO played the role of a facilitator where it urged both parties to begin negotiations to discuss the issues and find out potential solutions to the complaints made by India against Turkey.

The trade policy of Turkey that was at the centre of the dispute was its violations of its commitment to the WTO to reduce restrictions on trade of cotton and cotton yarns. According to the commitments, Turkey had agreed to a figure of five percent tariff for cotton yarn imports. But the country applied tariffs of 15 to 20% for Indian cotton yarn in the guise of safeguard measures.

This measure is related to protect domestic cotton industry of Turkey. Both India and Turkey are among the largest producers and exporters of cotton. Therefore, to prevent potential cheaper Indian cotton entering its market, Turkey had enhanced the import duties on Indian cotton yarn to protect its domestic producers.