Customs Union Celebrates 29 Years: Calls for Immediate Update Emerge

While the Customs Union between Turkey and the European Union (EU) came into effect on January 1, 1996, after the decision taken during the Partnership Council meeting on March 6, 1995, the inadequacy of this union in the face of changes in global trade and emerging new issues becomes apparent.

Starting with the Ankara Agreement signed in 1963 between Turkey and the European Economic Community (EEC) of the time, continuing with the Additional Protocol in 1973, the relationship reached a new dimension with the Customs Union decision on March 6, 1995, following negotiations between Turkey and the EU.

As of today, the Customs Union has turned 29 years old, having rapidly increased trade between Turkey and the EU after its implementation. One of the achievements of the Customs Union was the increase in foreign investments in Turkey. It enabled Turkish companies to be more competitive in the European market.

While the Customs Union, which initially covered industrial products and processed agricultural products, excluded other dimensions of the economy and trade, its inadequacy in the face of the changing and increasing needs of global trade over the long term has become apparent.

To address the current issues in global trade, the Customs Union needs to be updated to align with the realities of the global economy and the spirit of economic and trade partnership.

Despite providing various economic gains when it was implemented, structural problems within the Customs Union have gained serious attention in recent times. Issues such as Turkey not being a party to free trade agreements between the EU and other countries, road quotas applied to Turkish trucks, and Turkey not having sufficient representation in the decision-making mechanisms of the Customs Union are among the prominent challenges.

Immediate updating of the Customs Union is deemed necessary to address the current problems. All efforts towards making changes are expected to be mutually beneficial to both parties.

While the Customs Union initially covered industrial products, mutual economic and trade integration could be further strengthened by including public procurements, services, and the agricultural sector.

The problems within the Customs Union are largely attributed to Turkey not yet being a member of the EU. The resolution of these issues is anticipated with Turkey’s EU membership, entering the “Single Market,” and actively participating in the Union’s decision-making mechanisms.

As of the last year, the trade volume between Turkey and the EU exceeded $210 billion. The trade volume has shown a sevenfold increase since 1995, when the trade volume between Turkey and the EU was approximately $30 billion. In 2023, Turkey’s exports to EU countries amounted to $104.3 billion, constituting 41% of Turkey’s total exports. On the other hand, Turkey’s imports from the EU reached $106 billion in 2023, with the EU accounting for 29% of Turkey’s total imports. The total trade volume between Turkey and the EU in 2023 reached $210.3 billion.

source: prepared by Melisa Beğiç

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