It’s impossible to deny that the customs union has positively affected the Turkish economy since the 2000s. It has largely contributed to the reinforcement of Turkish industry, which is today capable of competing in global markets. Thanks to the customs union, the open economy principle has become Turkey’s irreversible economic model. The open economy mentality has also contributed to the “import” of global values in other domains to our country.Despite this positive situation, as of today, the customs union presents serious disadvantages for Turkey. First, the principle of the free circulation of goods and of some services is not functioning equitably between Turkey and the EU. The EU’s goods and services come to Turkey more easily than Turkish goods and services go to Europe. This inequity is multiplied by the non-existence of the free circulation of people, which is as important as the free circulation of goods and services. Bureaucratic and administrative obstacles continue, and Turkish firms have never had equal opportunities as EU firms in this “open market” atmosphere.
Turkish firms that tried to compensate for this situation eventually turned to non-EU countries to sell their products and services. However, there are some problems there, too. The EU continues to sign free trade agreements with third countries, thus expanding the areas exempt from tariffs and customs duties. Even though most of the goods and services subjected to these agreements are covered by the EU-Turkey customs union, Turkey is kept outside of this procedure because it is not yet an EU member. As a consequence, Korean goods, for example, are subjected to tariffs by one party but not by the other of this customs union; this creates unfair competition.
The EU claims that Turkey is free to conclude its own free trade agreements with third countries as long as these agreements are not incompatible with the customs union. Nevertheless, it does not take into consideration that while it negotiates as a union of 27 member states, Turkey has to negotiate on its own with third countries. Besides, because these “third countries” are generally those with low production costs and are Turkey’s economic competitors, they are not eager to conclude an agreement with Turkey. Hence, while the EU has every tool at its disposal to develop its trade with third countries, Turkey does not have this chance.
That is why the customs union issue must not only be understood as a side effect of the Cyprus problem. The problem is bigger than this. It is about the impossibility of continuing with the customs union under the present circumstances. If Turkey was sure that its accession negotiation process would function fairly, it could consider the disadvantages of the customs union as an investment for the future and tolerate them. However, the current state of the negotiations (with several chapters vetoed) does not allow us to be optimistic about this issue either. The fact that the customs union is unsustainable is amplified by the fact that the accession talks are as unsustainable as they are, too. Perhaps that is the reason why Turkey seems keen to conclude economic agreements and visa arrangements with a range of states from Chile to South Korea, as if the EU and the customs union did not exist at all.
