Ankara goes nuts as concessions are dropped

Date: 14/05/1998

By Myles Neligan

A EUROPEAN Commission proposal to suspend preferential trade concessions for imports of Turkish hazelnuts has prompted strong condemnation from officials in Ankara and angered the EU confectionery industry.

The proposal, which would abolish Turkey's right to export up to 9,000 tonnes of hazelnuts a year without paying import tariffs, is a tit-for-tat measure drawn up after negotiations aimed at persuading Ankara to relax its restrictions on EU beef and livestock imports broke down last week.

The Commission decided on retaliatory measures after rejecting Turkey's claim that the restrictions were necessary to protect importers from losses in the event of an outbreak of foot and mouth disease, which is endemic in the country.

Turkish trade officials protest that the move strikes at the heart of one of their country's main agricultural export markets, worth some 600 million ecu a year. As the proposed abolition of preferential trade concessions would also be applied to melons and tomato paste, both major Turkish export crops, the Ankara authorities' underlying fear is that the country's 1-billion-ecu farm trade surplus with the Union is under sustained attack.

"The EU is always raising diplomatic tensions with Turkey in its handling of trade issues like this," said a Turkish trade attaché.

"This latest development will only provide further ammunition to opponents of the EU-Turkey customs union, who are becoming increasingly influential these days. It is also disappointing because it reopens questions that we thought were settled under the new agricultural trade agreement, which has only been in force for two months."

The EU confectionery industry, which is heavily dependent on Turkish hazelnuts to make up for frequent shortfalls in supplies from EU member states, has also attacked the proposed restriction on imports. Preliminary calculations by industry sources indicate that its effect would be to increase the price of Turkish hazelnuts by 18%.

"It would be catastrophic for our business if this proposal were to be implemented," said Elvio Biancotti of leading Italian confectioners Ferrero Rocher.

"Hazelnuts are an expensive commodity anyway, and such a rise in costs would be very difficult for us. Abolishing these concessions would also be a slap in the face to our Turkish trading partners."

The proposed import restrictions must be approved by EU agriculture ministers before they can be implemented, with an initial discussion planned at their next meeting on 25 May.