Turkish economy minister urges formal action for Customs Union update by year-end

Published 22.06.2017 21:56
Updated 23.06.2017 00:11

Economy Minister Nihat Zeybekci is visiting Brussels today to discuss the European Union (EU) Customs Union update. He underlined the fact that before his departure, the goal is to take formal action toward the Customs Union update by the end of this year. "Both sides are working on extending the deal's scope. The EU commission voted for authority from the EU council and the process is ongoing in the European Parliament. It will be a win-win situation for both sides," Zeybekci said. Turkey began work on an updated agreement with a broader extent in January 2014, with a declaration released by both sides in May 2015 stating they will work on updating the Customs Union. Speaking at the Foreign Relations Economic Board (DEİK)'s iftar (fast-breaking) dinner on Tuesday evening, the economy minister underlined that the current agreement, which has been valid for 21 years now, is no longer acceptable to Turkey.

Forty-nine percent of Turkey's exports go to the EU, while 40 percent of its imports go to the EU. The foreign trade volume between Turkey and the EU equals 44 percent of Turkey's total foreign trade, making the EU the most valuable trade partner for Turkey. "We achieved this despite the fact that we do not like the current Customs Union deal," commented Zeybekci.

"I established my own company in 1993, and we just started to recover in 1995. That was when Turkey sealed the deal with the EU," said Zeybekci, adding, "Many industrialists showed their keys to the government, and said, 'you may take them since we will no longer be able to do business,'" said Zeybekci. The union was of benefit to the EU rather than being beneficial for Turkey, according to industrialists. However, Turkey has won a lot with the deal, according to the economy minister. "Thanks to our private sector's dynamism and flexibility, we made a profit. We developed our competitiveness, our technology and market domination," Zeybekci explained.

The problem with the current Customs Union is that the deal only includes industrial products and even then, not all of them. Furthermore, Turkey is being excluded from the decision-making processes. When the EU signs a free trade agreement with a country, that country can export to Turkey within the scope of the Customs Union. The country can enjoy the benefits of the union while exporting to Turkey, but Turkey cannot take advantage of this deal since it is not an EU member. So the country has an advantage over Turkey while exporting, but the conditions of the imports of that country from Turkey do not change. Furthermore, Turkey has no authority to decide whether to be a part of the free trade agreements that the EU signs with other countries nor has a say in what the conditions are.

Turkey now seeks to expand the Customs Union, and to have a say on the free trade agreements. Moreover, Turkey is willing to add five sectors to the current deal. While it does not include all industrial products, Turkey wants to add them all as a first step. Food and agricultural products, services, public procurements and electronics are also on Turkey's agenda.

Turkey can expand EU's

economic growth

Turkey by itself can expand economic growth in the EU, according to Zeybekci. Moreover, Turkey can increase the average income per capita of the EU, the economy minister underlined.

Zeybekci also stressed that a free trade agreement with the U.K. would commence on the same day as Brexit, since Turkey is the first country the U.K. has started negotiations with, and the two countries would meet "on common ground."

On the other hand, Turkey holds free trade agreements with 23 countries with active foreign trade policies and Ankara seeks to seal deals with five countries this year, which are: Georgia, Bosnia-Herzegovina, Serbia, Pakistan and Ukraine.

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