Turkish Steel Producers Association (TCUD) general secretary Dr. Veysel Yayan has said that
Turkey's Inward Processing Regime has continued to negatively impact
Turkey's external trade of steel products. He stated that
Turkey's flat steel consumption in 2013 was 14.6 million mt, adding that, although the increase in capacity exceeded domestic needs, the external trade data for flat steel products indicate an imbalance in favor of imports.
Turkey's flat steel imports increased by 10 percent in 2013, amounting to 7.1 million mt, while 33.1 percent of imports totaling 2.53 million mt were through the Inward Processing Regime. Despite sufficient domestic production capacity, the fact that 48 percent of flat steel demand was met through imports caused
Turkey's flat steel production capacity usage rate to remain at 53 percent.
Dr. Yayan pointed out that there have also been requests made by the industry regarding production under the scope of the Processing Under Customs Control Regime which could imply the revocation of custom duties altogether since it does not predict export obligations as in the Inward Processing Regime. The latter regime, which aims at incentivizing
Turkey's export activity, includes the reimbursement of taxes paid on imports after the exports of goods produced from the imported materials have been completed.
The TCUD general secretary said the Processing Under Customs Control Regime could also undermine the Input Supply Strategy (GITES), which aims for maximum added value by production of intermediate goods in the domestic market, leading the industry to use imported inputs at the expense of domestic capacity lying idle. Yayan expressed his concern that the Processing Under Customs Control Regime could get out of hand, considering the rumors that the permits will be issued by local authorities and not by the central administration.