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The Unique Nature Of Modernizing The Customs Union Evaluation Note / Nilgün Arısan Eralp  
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07/10/2018 - Viewed 319 times

 

It is no secret that Turkey-EU relations are becoming more transactional in nature, despite the fact that neither of the parties is willing to put a formal end to the dormant accession process. Currently both parties—which do not have a clear strategy vis-a`-vis each other—are satisfied by this “realist” framework with almost no strings attached. The basic constituents of such a relationship seem to be the continuation of the refugee deal, cooperation on anti-terrorism, energy, and security.

Apart from the refugee deal, the modernization of the Customs Union stands as the most viable component of a transactional relationship. The existing 1995 Customs Union is outdated and needs to be revised.

Facilitated by the current Customs Union, the economies of Turkey and the EU have become quite integrated. Turkey was the EU’s fifth largest trading partner in 2017, while the EU is Turkey’s largest. The EU remains Turkey’s most important economic partner in terms of trade, foreign investment, and tourism. The fragility of the economic situation in Turkey—namely a declining growth rate, a large and structural current account deficit, heavy reliance on short-term capital inflows, declining foreign direct investment, and a private sector with large foreign currency liabilities—makes the EU indispensable for Turkey. On the other hand, clearly, an essential part of Turkey’s appeal for the EU is its economic potential. According to a recent survey by the European Council on Foreign Relations (ECFR), economic relations are the most important aspect of Turkey-EU relations and trade provides an important reason for maintaining the alliance. Finally, the European Commission expressed its support for the modernization of the Customs Union since the inception of the idea.

 

You may read evaluation note from here.

 

This evaluation note was published in Turkish Policy on September 28, 2018

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