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See also: One-page summary of key findings of this dispute
Consultations
Complaint by India.
On 21 March 1996, India requested
consultations with Turkey concerning Turkey’s imposition of quantitative
restrictions on imports of a broad range of textile and clothing products.
India claimed that those measures are inconsistent with Articles XI and
XIII of GATT 1994, as well as ATC Article 2. Earlier, India had requested
to be joined in the consultations between Hong Kong and Turkey on the same
subject matter (WT/DS29).
On 2 February 1998, India requested the establishment
of a panel. At its meeting on 13 February 1998, the DSB deferred the
establishment of a panel.
Panel and Appellate Body proceedings
Further to a second request to establish a panel
by India, the DSB established a panel at its meeting on 13 March 1998.
Japan, the Philippines, Thailand, the US and Hong Kong, China reserved
their third-party rights. On 11 June 1998, the Panel was composed. The
report of the Panel was circulated to Members on 31 May 1999. The Panel
found that Turkey’s measures are inconsistent with Articles XI and XIII of
GATT 1994, and consequently inconsistent also with Article 2.4 of the ATC.
The Panel also rejected Turkey’s assertion that its measures are justified
by Article XXIV of GATT 1994.
On 26 July 1999, Turkey notified its intention to
appeal certain issues of law and legal interpretations developed by the
Panel. The report of the Appellate Body was circulated on 21 October 1999.
The Appellate Body upheld the Panel’s conclusion that Article XXIV of GATT
1994 does not allow Turkey to adopt, upon the formation of a customs union
with the EC, quantitative restrictions which were found to be inconsistent
with Articles XI and XIII of GATT 1994 and Article 2.4 of the ATC.
However, the Appellate Body concluded that the Panel erred in its legal
reasoning in interpreting Article XXIV of GATT 1994.
At its meeting on 19 November 1999, the DSB adopted the
Appellate Body report and the Panel report, as modified by the Appellate
Body report.
Implementation of adopted reports
At the DSB meeting of 19 November
1999, Turkey stated its intention to comply with the
recommendations and rulings of the DSB. On 7 January 2000, the parties
informed the DSB that they had agreed that the reasonable period of time
for Turkey to implement the DSB’s recommendations and rulings would expire
on 19 February 2001. Pursuant to the agreement reached, Turkey also was to
refrain from making more restrictive restrictions affecting imports of
specified textile and clothing products from India, to increase the size
of the quotas of India on certain specified textile and clothing products
and to treat India no less favourably than any other Member with respect
to the elimination of or modification of quantitative restrictions
affecting any product covered by the agreement.
On 6 July 2001, the parties to the dispute notified the
DSB that they have reached a mutually acceptable solution regarding
implementation by Turkey of the conclusions and recommendations adopted by
the DSB on the matter. Pursuant to the Agreement, Turkey agreed to:
- remove the quantitative restrictions it applies on
textile categories 24 and 27 in respect of imports from India, by 30 June
2001 or the date of signature of the Agreement;
- carry out tariff reductions on the applied rate
basis as described in annex to the Agreement, by 30 September 2001;
- strive towards early compliance with the
recommendations and rulings of the DSB.
Pursuant to the Agreement, the compensation would
remain effective until Turkey removes all quantitative restrictions
applied as of 1 January 1996 in respect of imports from India for the 19
categories of textile and clothing products.
At the meeting of the DSB on 18 December 2001, India
made a statement concerning the lack of notification by Turkey of tariff
reductions carried out as part of the implementation process.
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