## Facts

- Turkey and the European Communities implemented a customs union framework through a 1995 association council decision requiring Turkey to align its textile commercial policy with the European Communities.
- Beginning 1 January 1996, Turkey imposed quantitative import restrictions (quotas) on imports from India covering 19 categories of textile and clothing products.
- India challenged the quotas as inconsistent with GATT 1994 Article XI:1 (ban on quantitative restrictions) and Article XIII:1–:2 (non-discriminatory administration of quotas), and therefore inconsistent with Article 2.4 of the Agreement on Textiles and Clothing (ATC).
- Turkey accepted that the quotas would breach those provisions absent a justification, and argued they were permitted because they were required to form the Turkey–European Communities customs union under GATT 1994 Article XXIV.
- A WTO Panel found the measures violated GATT Articles XI and XIII and ATC Article 2.4, and rejected Turkey’s Article XXIV defense; Turkey appealed on issues of law.
- The Appellate Body upheld the main findings and recommended that Turkey bring its measures into conformity; the dispute later ended through a mutually agreed solution.

## Issues

1. Whether Turkey’s quotas on Indian textiles and clothing were inconsistent with GATT 1994 Articles XI and XIII and, by incorporation, ATC Article 2.4.
2. Whether GATT 1994 Article XXIV can justify measures that otherwise breach GATT obligations when adopted in connection with forming a customs union.
3. What conditions and evidentiary showing are required to rely on Article XXIV, including whether the challenged measures were necessary or inherent to forming the customs union.

## Decision

- The Appellate Body upheld that Turkey’s quantitative restrictions were inconsistent with GATT 1994 Articles XI and XIII.
- The Appellate Body upheld that, because the measures breached GATT disciplines, they also violated ATC Article 2.4.
- The Appellate Body rejected Turkey’s claim that Article XXIV operates as an automatic exemption for customs-union-related measures.
- The Appellate Body held that Turkey failed to prove the quotas were necessary or inherent to forming the customs union and failed to show the absence of reasonably available, less GATT-inconsistent alternatives.
- The Appellate Body recommended that Turkey bring the measures into conformity with WTO obligations.

## Legal Principles

- GATT 1994 Article XI:1 generally prohibits quantitative restrictions such as import quotas, subject only to limited exceptions.
- GATT 1994 Article XIII requires that any permitted quantitative restrictions be administered on a non-discriminatory basis consistent with specified allocation disciplines.
- ATC Article 2.4 requires Members’ textile and clothing restrictions to comply with GATT 1994 disciplines; a breach of GATT XI or XIII therefore entails a breach of ATC Article 2.4 for covered measures.
- GATT 1994 Article XXIV is not a blanket defense; it can justify deviations from other GATT provisions only to the extent the deviation is required for forming a customs union and the Article XXIV:5 and XXIV:8 conditions are satisfied.
- The party invoking Article XXIV bears the burden of proving both (i) that the customs union satisfies Article XXIV requirements and (ii) that the challenged measure is necessary to form the customs union, including that reasonably available alternatives consistent with GATT obligations do not exist.

## Conclusion

The Appellate Body confirmed that Turkey’s textile and clothing import quotas violated core GATT prohibitions and could not be excused by the formation of a customs union, absent proof that the specific restrictions were required by Article XXIV and met its conditions.


Turkey—Restrictions on Imports of Textile & Clothing Prods., WTO Doc. WT/DS34/AB/R (1999)