New EU chapter, new page in Turco-Franco trade ties?

June 17, 2012, Sunday/ 13:33:00/ ERGİN HAVA

There is no doubt that EU candidate Turkey and one of the union’s “big guys,” France, have wasted a great deal of time going due to certain political tensions.

This was mostly caused by the latter’s provocations on such sensitive issues as EU accession and the claimed Armenian “genocide,” with Turkey overreacting to such.

Maybe the fiercest opponent to Turkey’s full membership in the EU, former French President Nicolas Sarkozy played an important role in maintaining relations with Turkey on a knife-edge. His government’s vetoes on opening some key EU accession chapters was a headache for Turkey, not to mention raising the so-called genocide issue. Following his replacement by new President François Hollande, hopes for a better understanding with France have flourished on the Turkish side. Politicians from both sides have recently released statements to decrease the tension. More importantly, now that the reopening of the Economic and Monetary Policy chapter as part Turkey’s EU accession bid is at hand, observers argue Turkey and France could find a doorway to remedy economic relations that have long been under the shadow of past political tensions.

Bilateral trade between Turkey and France exceeded $11 billion in 2011. Turkey sold 12.5 percent more goods to France last year over 2010, while it received 12.9 percent more imported goods from France in the same period. Trade between the two partners dropped by 3.6 percent in the first quarter of 2012, when compared to the same quarter of 2011. However, it increased by 2.7 percent in the first quarter of this year over the preceding quarter to reach 3.13 billion euros. France remains the fifth-largest buyer of Turkish products. One of the critical points Turkey hit when reacting against France was on the tender front. There has always been speculation that the Turkish government might move to overturn critical tenders -- that French companies could win -- due to recent tension with France. France’s Constitutional Council in March overturned a controversial law that would have criminalized denying that 1.5 million Armenians perished in a systematic genocide campaign during the Ottoman Empire. The cancellation of an earlier contract that granted Amsterdam-based digital security firm Gemalto N.V. a 7.5 million euro tender to provide the electronic chips used in Turkish passports in May was the latest example of this.

The Economic and Monetary Policy chapter -- which is expected to be reopened on June 18 -- was blocked by Sarkozy five years ago due to his popular objection to Turkey’s EU accession. The new chapter -- if successfully opened -- means a strong step towards full Turkish membership in the EU. However, it has to happen before July 1, when Greek Cyprus assumes the term presidency. Strongly objecting to the EU decision to accept Greek Cyprus as the sole representative of the island without recognizing the Turkish presence there, the Turkish government is expected to “freeze” negotiations for membership with the EU during the six-month Greek Cyprus presidency. According to Cengiz Aktar, the anticipated approval of the economic chapter by the new French president can add momentum to Turkey’s membership bid. “Hollande has never stated he was against opening chapters with Turkey, and at the end of the day, he has no benefit in doing so. … This new chapter could bring about an unprecedented rapprochement between Turkey and its strongest objector -- for the longest time -- in the EU,” he indicated.

“The French private sector continues its investments in Turkey, and trade is increasing. What we need is a signal from politicians on both sides to trigger further incentives for new investments and trade in both markets,” Seyfettin Gürsel told Sunday’s Zaman. Five chapters, including the economic chapter, under negotiation are being blocked by France. The remaining four are chapters on agricultural and rural development, regional politics, financial and budgetary issues and public institutions. “These five chapters should be opened before healthy trade relations can be established with France as well as the EU,” Gürsel indicated. There are around 1,000 French-owned businesses in Turkey with a total investment size of around $9 billion, while Turkish companies in France total 400 with $500 million of investment volume.

Turkish-French Chamber of Commerce Chairwoman Zeynep Necipoğlu told Sunday’s Zaman that Hollande made it clear during his campaign that he would not oppose Turkey’s entry. “So we can safely assume that the relationship between France and Turkey will improve, which in turn will have an important impact on businesses in both countries. I expect the economic relationship to improve considerably during the Hollande mandate.” With regard to tenders, Necipoğlu said she expects a milder approach from Hollande, who will consider the relationship between the countries and its importance to both of them. “As a result, the cancellation of contracts on shaky pretexts should be a thing of the past.”

“Hollande has strong commitments to regain dynamism in French markets, and Turkey remains a key trade partner here. France will likely benefit from ever-growing Turkish markets,” İbrahim Öztürk told Sunday’s Zaman. At the end of the day, he continued, one should note that despite all the political rage on stage, France is one of the few EU countries to offer the best opportunities for Turkish businessmen. “The next step should be discussing the Turkish manufacturing industry’s integration with EU markets,” he added.

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