Customs Union Issues

The customs union agreement is one of the rare agreements that have been signed over the last two decades of Turkey-European Union relations. It was the first EU agreement to be signed after the Sept. 12, 1980 coup in Turkey.
This agreement has been discussed since it was signed in 1996. In the 1990s, the main argument raised against this deal suggested that the agreement would open the Turkish market to EU buyers, and that this would seriously hurt Turkey's development because it would isolate Turkey from the Middle East and negatively affect its competitiveness. The same criticism was previously raised by the same circles in the 1970s, when they argued that the EU would exploit the Turkish market. Today, similar arguments are espoused by some Justice and Development Party (AKP) figures and left-wingers. The other criticism was mostly focused on the structure of the agreement.
For those who would like to understand the importance and impacts of the customs union for the Turkish economy, I would recommend the report “Evaluation of the EU-Turkey customs union,” drafted by the World Bank for the EU Commission and the Turkish government on March 28, 2014. The report lists the contributions of the customs union to Turkey's overall economic outlook over the last two decades, during which the world economy has become more globalized, and also analyzes the structural impacts of this initiative.
The report stresses that Turkish industry has integrated with European industry via this customs union, which also subjected the Turkish economy to international criteria, including quality, competitiveness and productivity. So we realize that Turkey has gone through a process of transformation in the economic area and has become a producer for the EU and global markets after the customs union came into effect.
Evidence shows that Turkey's foreign trade volume has expanded and Turkey has become an attractive destination for foreign investment because of the customs union. I believe Turkey is unable to attain economic development by reliance on its own domestic dynamics without the EU membership process. The World Bank report focuses on the issues and recommends expansion of the scope of the customs union. The report further argues that both parties will gain if the agreement is extended to include service and agriculture sectors. The customs union is not an ordinary free trade agreement; it is one of the cornerstones of the EU.
Despite all these positive developments, there are some serious problems stemming from the structure of the customs union agreement. Not only does the government believe the customs union agreement should be revised, so do some respected economists, including Seyfettin Gürsel, and if that is not possible, the agreement should be terminated and a new free trade agreement should be signed with the EU. Gürsel says: “Turkey failed to ensure during the making of the customs union agreement the inclusion of a clause that the free trade agreements the EU would make would not apply to Turkey. Honestly, I am not aware of the background of this process. But it no longer matters anyway.”
Well, it does matter actually. If, for instance, the free trade agreement the EU makes with Mexico becomes a problem, the goods of this country will travel freely in our country but our goods are subjected to trade barriers in that country. This is because Ankara agreed in 1995 that the customs union would not include relations with third party countries. The Turkish economy is paying for this attitude, which it displayed to avoid possible international problems. This is a fact that should be emphasized, because this attitude is still visible in most international deals and in agreements with the EU as well.
It is possible to identify this problem in the Treaty of Ankara that was made with the EU as well. The Foreign Ministry is not fully competent to analyze such agreements, which require extensive knowledge and expertise. Coordination between institutions is also insufficient and weak. If the free trade agreement signed between the EU and Morocco or South Korea is more comprehensive than the customs union, Ankara is responsible for it.
Without the consent of Cyprus and Greece, revisions to the customs union are not possible. The policy of these two states is limited to proving the argument that they hold the strings in Turkey's EU membership process; and they are ready to sacrifice their interests to make this point. For this reason, the only option is to terminate the customs union, because it is not possible to sign a new free trade agreement with the EU. Did anybody calculate the economic cost of this option?

ALİ YURTTAGÜL (Cihan/Today's Zaman)