Urgent need for better EU-Turkey relations: Analysis
Soner T. Kistak
Despite its many problems and weaknesses, the European Union remains a success story particularly in terms of trade. It is the largest economy in the world. Although its projected growth is slow, it remains the largest trading zone with an average GDP per capita that is well above 23,000 euros. The value of exports between EU member states stood at 2,978 billion euros as of 2016.
As a neighbor and trading partner of the EU, Turkey has benefited from the EU’s booming trade. The 1995 Customs Union has helped Turkey transform itself from an agrarian economy into a modern one. As matter of fact, the increase in trade with the EU has made Turkey the fifth largest exporter to the EU. Moreover, thanks to this strong cooperation, the Turkish automotive industry has forged cooperative ties with European auto companies, such as Fiat and Renault.
Among European countries, Germany stands out as a reliable trade partner. The table below shows Germany has been Turkey’s largest partner for trade. The existence of a Turkish community in Germany as well as other long-term connections have been major contributors to this result.
Trade with our European partners is not only important in terms of quantity of trade but also in terms of the quality of our trade relations. It is important to note it is only through its European trading partners that Turkey has obtained technology transfer, as can be seen in the case of the automotive industry.
If we compare our European commercial relationships with the one we have with the United States, we see trade with the latter is dominated by defense contracts where Americans are extremely careful not to give too much away. Put differently, Turkey’s relationship with the Europeans is more of a win-win relationship compared to the ones it has with other regions.
While Turkey has already achieved a lot in the last decades, it also faces some challenges with the biggest one being youth unemployment. Unfortunately, as of 2017, the unemployment rate for Turks aged 15-24 was around 21.9 percent. This requires structural reforms as well as long-term vocational planning.
Developing a strong relationship with the EU and upgrading the existing Customs Union are likely to deliver the following benefits:
- Solving youth unemployment through attracting European industry players to set up operations in our country- Modernization of traditional sectors such as agriculture and services- Working together with the EU as an ally against protectionist U.S. trade policies
While the above-mentioned theoretical benefits are clear, it has proven very difficult to put in practice. A major roadblock in developing relationships have been the highly publicized political disputes among politicians. Despite this difficulty, the long-term benefits for Turkish society lie in having better commercial links with the EU.
As a country that has a structural current account deficit, we need to attract foreign direct investment from external parties. A closer relationship with the European countries will certainly help in this regard.