EU-Turkey Customs Union 2.0: Toward Privileged Partnership

Serdar Altay

Abstract


This paper analyses the process to upgrade the 20-year-old Customs Union between the European Union (EU) and Turkey from the Turkish perspective by exploring potential integration scenarios tabled by the European Commission. The scenarios tabled by the European Commission (EC) are qualitatively examined in a comparative fashion by reviewing potential outcomes and expectations of the two sides from the process as publicly declared in different resources. The paper finds that there is substantial asymmetry between expectations as well as potential costs and benefits to be reaped for the two parties. Firstly, by upgrading the Customs Union, Turkey hopes to join the USA-EU free trade agreement (FTA), known as the Transatlantic Trade and Investment Partnership (TTIP). Secondly, Ankara hopes to overcome the “asymmetry” challenges of the existing Customs Union such as the problem for Turkey not to be able to engage in the EU’s FTAs simultaneously. On the other hand, the EU expects the upgrade process to ensure a series of economic gains by expanding the agreement to new areas of agriculture, services, and public procurement, and to create an enforcement mechanism (i.e. a Dispute Settlement Mechanism) that would address the problem of Turkey’s non-compliance with CU obligations.

 

The paper asserts that the potential scenarios on the negotiation table will address the EU’s expectations rather than the expectations and interests of Turkey. If the two parties upgrade the Customs Union upon one of the scenarios proposed by the European Commission, the EU will have ensured almost all possible economic benefits from Turkey’s further integration into the EU, with very little costs and no need to offering Turkey full membership. In this regard, an upgraded Customs Union may become a permanent but unsatisfactory instrument, rather than a temporary deal towards membership. The new deal will likely materialize the “privileged partnership” between Turkey and the EU, an option which has long been promoted in Europe by circles that are against Turkey’s EU accession. Therefore, the negotiation scenarios currently on the table may cause a risk of distancing Turkey from the perspective of EU membership. 


References


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