European Commission proposes modernizing Customs Union deal with Turkey
REUTERS photoThe European Commission said Dec. 21 that it has asked the European Council for a mandate to launch talks with Turkey to modernize the existing 20-year-old EU-Turkey Customs Union.
The upgrade of the EU-Turkey trade relation forms an essential part of the efforts made by the EU and Turkey to deepen their relations in key areas of joint interest identified at the EU-Turkey Summit of Nov. 29, 2015, and in the EU-Turkey statement of March 18, 2016.
“By making this proposal, the commission continues to deliver on the commitments it has made,” read the statement.
Modernizing the Customs Union to reflect current EU-Turkey trade relations is expected to bring substantial economic benefits to both partners.
“With the evolution of the economic environment and the significant growth of EU-Turkey trade, the Customs Union that entered into force in 1996 is becoming less and less equipped to deal with the modern-day challenges of trade integration,” read the statement.
The first EU-Turkey High Level Economic Dialogue last April underlined the potential of its modernization.
“The modernization and extension of the Customs Union could unlock further opportunities for EU companies in the agri-food and services sectors and the public procurement market. Respect of democracy and fundamental rights will be an essential element of the agreement,” noted the Commission.
Turkey is the EU’s fifth largest partner in trade in goods. The value of bilateral trade in goods has increased more than fourfold since 1996 and currently amounts to 140 billion euros annually. The EU has a positive balance of 17 billion euros. For Turkey, the EU is the most important trading partner, representing 41 percent of Turkey’s global trade. Moreover, two thirds of foreign direct investment in Turkey currently originates in the EU.
Turkey wants to widen the 20-year-old deal with the EU to cover services and agriculture. Deputy Prime Minister Mehmet Şimşek told Reuters in June that such a move could make Turkey the EU’s third largest trade partner and double their current bilateral trade of around $160 billion a year.