On June 13, Turkey and the European Union are starting negotiations on updating the Customs Union. For Turkey, these negotiations are important as Ankara has set the economic development as a priority outcome of the talks.
To understand the importance of these negotiations for Ankara, it is necessary to take a look at the state of economic cooperation between Turkey and the EU, and, most importantly, the advantages Turkey will get from updating the Customs Union.
EU-Turkey economic cooperation
Currently, 64 percent of foreign investments put in Turkey accounts for the EU countries. Aside from this, 23,000 out of more than 50,000 foreign companies operating in Turkey were from the EU countries in 2016.
This is while Turkey is among the top five foreign trade partners of the EU. In value terms, Turkey’s exports to the EU countries stood at $32 billion only in the first six months of 2016, whereas this figure was $64 billion for the entire year 2015.
A dvantages Turkey will get from updating the Customs Union
Updating the Customs Union will give several advantages to Turkey.
First of all, Turkey will get free access to European markets for selling its agricultural products. This will lead to an increased competition among Turkish exporters of agricultural products – something the country’s government has sought so long.
Secondly, the quota for Turkish cargo carriers will be abolished. This would lead to an increase in export of goods from Turkey.
Thirdly, investors from both sides will get an opportunity to freely participate in the privatization of public property. Media outlets are already reporting about the willingness of Turkish investors to participate in the privatization processes in the EU, the total value of which is estimated at 441 billion euros.