Praising the agreement for its positive impact on Turkey, Bağış said the Turkish economy could not have developed as the sixth largest economy in Europe if there had been no customs union agreement, which has been in effect since Jan. 1, 1996. Foreign direct investment received by the country could not have increased to its current level and new employment areas would not have been created if Turkey had not become a part of the deal, he added. However, he did remark that it is neither enough nor perfect, indicating that there are some points to be revised.
“Together with Foreign Trade Minister Zafer Çağlayan, we decided to kick off the preliminary work to review this issue with the EU. If we are going to make changes on the deal, first we should determine what we will demand in exchange for what,” he said.
Bağış was speaking at a summit for Turkish exporters experiencing problems with the EU accession process, which was organized by the Turkish Exporters Assembly (TİM) and also attended by Çağlayan yesterday. Bağış noted that more focus should be placed on exports to empower Turkey. Export levels have risen seven-fold in seven years thanks to a common vision shared by both businessmen and the government, he stressed. Praising the impact of rising exports on the economy, Bağış stated that one-third of existing schools and one-fourth of current hospitals were built in the last seven years with the contribution of exports to the economy. In contrast to the past when exports were only carried out by a few determined cities, now it has become a common activity conducted in all the 81 provinces, Bağış said.
In regard to the customs union, Çağlayan, also speaking at the event, noted that the deal is to the advantage of Turkish industry, producers and consumers. We could not have achieved the current export levels in the absence of the customs union, he stated. Çağlayan, however, remarked that if the terms of customs union were fully implemented, Turkey would have definitely seen better results in its trade with Europe. According to Çağlayan the negative part of the customs union for Turkey is related to the free trade agreements the EU made with other countries, not allowing Turkey to enjoy these deals. “If they had said that Turkey was also a part of these agreements, then we would not have been struggling to sign similar agreements with Mexico for the past 10 years and Algeria for five years. With this, they created an environment of unfair competition for Turkey,” he argued.
Before becoming a part of EU Customs Union, Turkey’s annual imports from Europe amounted to $23.2 billion, while its annual exports to European countries were $11.5 billion, the minister recalled. These figures rose to current levels of $56.5 billion and $47 billion, respectively, he added.
Çağlayan said that Turkey’s exports contracted by $29 billion last year, while $20 billion of this figure was due to a decline in exports to European countries because of a fall in demand. The minister also stated that the South Korean trade minister will visit Turkey on March 26, when talks on a possible free trade agreement between the two countries will be kicked off.
