Turkey-EU relations and the customs union: Expectations versus reality

Turkey-EU relations and the customs union: Expectations versus reality

Turkey and the EU entered into a customs union (CU) in 1995. The CU agreement was something more than just a typical customs union since it imposed the obligation to align national legislation (concerning trade, competition, intellectual and industrial property rights, patents and customs) with that of the EU. With the entrance into force of the CU in 1996, the Customs Administration has considerably improved its structure, quality of service, implementation of legislation and dissemination of a customer-focused service approach. The CU has had a record of mixed results for the Turkish economy. Even though Turkey has benefitted, its original expectations from the CU have not been met. 

The EU has not fulfilled and has violated certain obligations that are envisioned in the CU. Turkish disillusionment has arisen from the fact that the EU has: 1) not allowed the free movement of Turkish labor 2) provided less financial support than what it had originally promised 3) not included Turkey in its free trade agreements (FTA) with third parties 4) not included agricultural products in the CU 5) not removed transport quotas 6) not removed (and put new) restrictions against the freedom of establishment and the freedom to provide services and 7) not stopped conducting anti-dumping investigations on Turkish products.

Since 1996, Turkey has gone through radical changes in its customs legislation and administration in order to meet EU standards. Turkey has also intensified its efforts to open up economically to regions besides Europe. To this end, we have made further changes to our customs policy in order to increase trade relations with our neighbors. High-level meetings, the simplification of our entry checkpoints and the deployment of customs cancellors and attaches in other countries are only some of the measures that will help us to achieve this goal.

The Turkish economy has improved, however its trade deficit with the EU and third parties has increased. Additionally, the EU has failed – thus far – to fulfill certain important obligations which were envisioned in the CU agreement concerning, among other things, the free movement of Turkish citizens in the EU and the removal of trade barriers.

Despite Turkey’s close cooperation with the EU, some issues have led to increased frustration on the former’s side. Turkey has been conducting accession negotiations with the EU since October 3, 2005. These negotiations have been further complicated by the unresolved Cyprus problem. Turkish frustration has been also caused by the EU’s insufficient support for Turkey’s battle against domestic terrorism (e.g. the Kurdistan Workers’ Party or PKK). Moreover, some important EU member states put forward the narrative of a “privileged partnership” with the intention of preventing Turkey’s full membership. 

There are steps that the EU can take which Turkey merits and which can help reduce the distrust. For example, the imposition of visa requirements for Turkish nationals openly violates the principle of free movement of goods as it is declared in Association Council Decision 1/95 as well as Article 41 of the Additional Protocol underlining that no new restriction shall be introduced in the field of freedom of establishment and freedom to provide services between the parties. As a country involved in a process defined as targeting full membership, Turkey’s invitation to EU summits where priorities and fundamental policies of the EU are decided is important.

Hayati Yazıcı is minister of trade and customs. The article was originally published in the Turkish Policy Quarterly (TPQ) Spring 2012 issue (Vol. 11 No. 1). To read it in full, please visit the website at www.turkishpolicy.com.