Expanding Turkey’s Expanding Turkey’s Exports Exports

July 2007July 2007

22

Today’s DiscussionToday’s Discussion

U.S. Imports from Turkey through U.S. Imports from Turkey through the U.S. Generalized System of the U.S. Generalized System of Preferences (GSP) Program Preferences (GSP) Program

Using the U.S. GSP programUsing the U.S. GSP program

Increasing Turkey’s GSP duty-free Increasing Turkey’s GSP duty-free export opportunitiesexport opportunities

33

GSP ProgramGSP Program

Created by US Congress in 1974Created by US Congress in 1974

Provides duty-free treatment for Provides duty-free treatment for 3,474 products from 131 3,474 products from 131 countriescountries

Gives Turkish exports an Gives Turkish exports an advantage in U.S. market; advantage in U.S. market; provides cheaper goods to U.S. provides cheaper goods to U.S. industry and consumersindustry and consumers

Major U.S. import program: Major U.S. import program: $32.6 billion in 2006; up 22%$32.6 billion in 2006; up 22%

44

U.S. Imports from Turkey U.S. Imports from Turkey Under GSP in 2006Under GSP in 2006

$1.13 billion (up 5.4% from 2005) $1.13 billion (up 5.4% from 2005)

GSP: 21% of $5.4 billion total imports GSP: 21% of $5.4 billion total imports

913 (26%) of 3474 GSP product types913 (26%) of 3474 GSP product types

Importers saved $47.5 m in dutiesImporters saved $47.5 m in duties

But, GSP-eligible imports are But, GSP-eligible imports are receiving less and less duty-free receiving less and less duty-free treatment treatment

55

U.S. Imports from Turkey U.S. Imports from Turkey Under GSP (2006)Under GSP (2006)

Gold jewelry: $350 million (5.0%-5.8%)Gold jewelry: $350 million (5.0%-5.8%)Refined copper wire: $56 million (3%) Refined copper wire: $56 million (3%) Building stone: $42 million (4.9%); Building stone: $42 million (4.9%); imports up 43% in 2007 (paying duty)imports up 43% in 2007 (paying duty)Vehicle engine parts: $33 m (2.5%)Vehicle engine parts: $33 m (2.5%)Shotguns: $32 million (2.6%)Shotguns: $32 million (2.6%)Juice of single fruit: $26 million; up Juice of single fruit: $26 million; up 96% in 2007! – (0.5 cents/liter) 96% in 2007! – (0.5 cents/liter)

66

U.S. Textile and Apparel Imports U.S. Textile and Apparel Imports from Turkey under GSP in 2006from Turkey under GSP in 2006

Turkey unique in exporting many GSP-Turkey unique in exporting many GSP-eligible textiles and apparel to U.S.eligible textiles and apparel to U.S.

Silk: fabrics, shawls, women’s/girls’ Silk: fabrics, shawls, women’s/girls’ apparel, handkerchiefsapparel, handkerchiefs

Headbands, headgear, national flagsHeadbands, headgear, national flags

Carpets, banners, umbrellas, hairnetsCarpets, banners, umbrellas, hairnets

Duty savings as high as 15%Duty savings as high as 15%

77

Which Products are Eligible for Which Products are Eligible for Duty-Free GSP Treatment?Duty-Free GSP Treatment?

EligibleEligible: most dutiable manufactures and : most dutiable manufactures and inputs; certain agricultural, fishery, and inputs; certain agricultural, fishery, and primary industrial products (metals, primary industrial products (metals, chemicals) chemicals)

Not eligibleNot eligible: watches; certain textiles, : watches; certain textiles, footwear, handbags; luggage, flat goods footwear, handbags; luggage, flat goods not made of silk, work gloves, most leather not made of silk, work gloves, most leather goods goods

88

How to Qualify for Duty-free How to Qualify for Duty-free Treatment under GSPTreatment under GSP

(1)(1) Product included in tariff list of GSP-Product included in tariff list of GSP-eligible articles and not excluded from eligible articles and not excluded from TurkeyTurkey

(2)(2) Imported directly from Turkey or pass Imported directly from Turkey or pass through another country in a sealed through another country in a sealed container container

(3)(3) Growth or product of Turkey, or if Growth or product of Turkey, or if imported inputs, local content and imported inputs, local content and processing equal 35% of product valueprocessing equal 35% of product value

99

Cost of Turkish inputs and labor must Cost of Turkish inputs and labor must equal 35% of product’s price when sold.equal 35% of product’s price when sold.

To count toward that 35%, imported To count toward that 35%, imported inputs must be “substantially inputs must be “substantially transformed” in Turkey and then used to transformed” in Turkey and then used to help produce or manufacture item.help produce or manufacture item.

““Substantially transformed” means the Substantially transformed” means the U.S. would classify them as different U.S. would classify them as different items.items.

35% Value-added Requirement

1010

Claiming GSP Duty-Free Claiming GSP Duty-Free TreatmentTreatment

Importer must REQUEST duty-free Importer must REQUEST duty-free treatment for the itemtreatment for the item

Is NOT automatic Is NOT automatic

Write an “A,” or “A*” before the tariff Write an “A,” or “A*” before the tariff number on Customs entry form 7501*number on Customs entry form 7501*

A from all beneficiaries A from all beneficiaries

A* one or more countries excluded from GSP treatmentA* one or more countries excluded from GSP treatment

1111

Ensure GSP Duty-free Ensure GSP Duty-free Entry into the U.S.Entry into the U.S.

Importer must place an “A” or “A*” in front of the HTSUS tariff number on the U.S. customs entry form 7501, Column 27.

1212

Increasing Use of GSP Benefits Increasing Use of GSP Benefits

1.1. Ensure products get GSP duty-free Ensure products get GSP duty-free treatment when eligibletreatment when eligible

2.2. Increase exports of GSP-eligible Increase exports of GSP-eligible textile and apparel productstextile and apparel products

3.3. Identify Turkey’s exports to other Identify Turkey’s exports to other countries that would get GSP in U.S. countries that would get GSP in U.S.

4.4. Use certified handicraft arrangement Use certified handicraft arrangement (wall hangings, pillow covers, certain (wall hangings, pillow covers, certain textile floor coverings). textile floor coverings).

1313

Claim the GSP SavingsClaim the GSP Savings

Importers of GSP-eligible goods from Importers of GSP-eligible goods from Turkey are paying duties needlesslyTurkey are paying duties needlessly

2004: 99% of GSP-eligible goods 2004: 99% of GSP-eligible goods entered the U.S. duty-freeentered the U.S. duty-free

2006: 88% entered GSP duty-free 2006: 88% entered GSP duty-free

Extra $6.2 million in duties assessed Extra $6.2 million in duties assessed on Turkish productson Turkish products in 2006in 2006

1414

Examples of Extra Duties PaidExamples of Extra Duties Paid

National flags: $233,000 @ 7% dutyNational flags: $233,000 @ 7% duty

Telescopic sights for rifles: 14.9%Telescopic sights for rifles: 14.9%

Silver jewelry: 13.5%Silver jewelry: 13.5%

Prepared vegetables: 11.2%Prepared vegetables: 11.2%

Imitation jewelry: 11%Imitation jewelry: 11%

1515

Make sure importer marks “A” or Make sure importer marks “A” or “A+”:“A+”:

1616

Export more of Turkey’s current Export more of Turkey’s current GSP-eligible exports to the U.S. GSP-eligible exports to the U.S.

Color TV sets (saves 3.9% - 5.0% duty)Color TV sets (saves 3.9% - 5.0% duty)Nuts and seeds (saves up to 11.3 cents/kg)Nuts and seeds (saves up to 11.3 cents/kg)Tractor power trains, camper tops (2.5%) Tractor power trains, camper tops (2.5%) Piston engine parts (saves 2.5%)Piston engine parts (saves 2.5%)*Household/Laundry washers (saves 1.4%)*Household/Laundry washers (saves 1.4%)Vehicle radial tires (saves 4%)Vehicle radial tires (saves 4%)Insulated wiring sets: vehicles, planes, Insulated wiring sets: vehicles, planes, ships (savesships (saves 5%)5%)

1717

Questions?Questions?

For agriculture: For agriculture: AGANKARA@FAS.USDA.GOVAGANKARA@FAS.USDA.GOV

Istanbul: 212-335-9068Istanbul: 212-335-9068

Ankara: 312-468-6129Ankara: 312-468-6129

Other questions:Other questions:

Ankara.Office.Box@mail.doc.govAnkara.Office.Box@mail.doc.gov

1818

For Additional Information For Additional Information

Office of the U.S. Trade Representative Office of the U.S. Trade Representative Website:Website:

GSP guidebook, lists of GSP-eligible and GSP guidebook, lists of GSP-eligible and ineligible products, notices:ineligible products, notices:

– http://www.ustr.gov/Trade_Development/http://www.ustr.gov/Trade_Development/Preference_Programs/GSP/Section_Index.htmlPreference_Programs/GSP/Section_Index.html

1919

For Additional InformationFor Additional Information

U.S. Tariff Schedule:U.S. Tariff Schedule:– http://www.usitc.gov/tata/htshttp://www.usitc.gov/tata/hts

Department of Homeland Security: Customs & Border Department of Homeland Security: Customs & Border Protection: http://www.customs.gov/xp/cgov/import/Protection: http://www.customs.gov/xp/cgov/import/

Customs Entry Form 7501: Customs Entry Form 7501: https://forms.customs.gov/customsrf/getformharnhttps://forms.customs.gov/customsrf/getformharness.asp?formName=cf-7501-form.xftess.asp?formName=cf-7501-form.xft

http://www.customs.treas.gov/xp/cgov/toolbox/ http://www.customs.treas.gov/xp/cgov/toolbox/ publications/publications/

2020

Teşekkür ederimTeşekkür ederim