Academic journal article Insight Turkey

Toward a 'Privileged Partnership": The EU, Turkey and the Upgrade of the Customs Union

Academic journal article Insight Turkey

Toward a 'Privileged Partnership": The EU, Turkey and the Upgrade of the Customs Union

Article excerpt

Introduction

The origins of today's EU-Turkey partnership go back to the early years of the 1960s. An Association Agreement dated 1963 paved the way for forming a bilateral Customs Union (CU) that has been in force since 1996. Turkey earned candidacy status for EU membership in 1999, and its accession negotiations began in 2005. Nevertheless, so far Ankara has made only limited progress toward membership owing to mounting political hurdles on both sides. The negotiations have been effectively stalled in recent years amid the biggest political crisis in bilateral relations. Rising populist nationalism in Western Europe, the Brexit decision, and increasingly unified resistance to Turkey's accession within the EU have made Turkey's full membership an impossible scenario.

Although proponents of Turkey's EU membership both in Europe and Turkey have long lost faith in a happy ending, neither Ankara nor Brussels is ready to terminate the accession process and work out a mutually non-destructive Plan B. In their October 2017 summit in Brussels, the EU leaders produced a decision, at the end of hours of heated debate, that limits structural aid for Turkey's accession owing to persisting concerns about the conditions of democracy and human rights in the country. (1) The European Commission's latest progress report on Turkey's accession contends that Ankara fails to meet not only political criteria for being in the EU but also increasingly falls short of maintaining its market economy. Even though a decision that would officially cut off the accession talks has so far been evaded, the policy debate will certainly intensify in European capitals toward constructing a viable exit strategy that would officially terminate the membership process but keep Turkey anchored to Europe. This time the proponents of the idea of a "Privileged Partnership" with Turkey will shape the policy debates in Europe, rather than those who back Turkey's membership bid. Upgrading the CU is central to the Privileged Partnership proposals.

The European Commission (EC) and the Turkish government have already launched a process that would expand and upgrade the two-decades-old CU. In May 2015, Turkish Economy Minister, Nihat Zeybekci, and European Commissioner for Trade, Anna Cecilia Malmstrom, reached a mutual understanding to modernize the trade pact and extend it to new domains. Originally, the plan was to address the imminent institutional defects of the current CU and to broaden its market access scope to farming, services, and public procurement. In December 2016, the EC announced its objectives and scenarios for the forthcoming talks, and called for a negotiation mandate from the member states. (2) The Commission proposed a broader package for CU 2.0 than the mutually agreed framework adopted in May 2015. Going beyond conventional trade pacts, the EC proposed delineating a "mega-regional" between Turkey and the EU with deep market access commitments, and a comprehensive rules and enforcement agenda. This development must please the advocates of Privileged Partnership in Europe; because the proposed pact would further open Turkish markets, it would not only strongly anchor Turkey with Europe, but also eradicate the EU's motives to accept Turkey as a full member.

Although the two parties are anticipated to start the update negotiations in 2018, there has been almost no debate in Turkey on how to repair ties and move forward with the nation's biggest economic partner and political ally. As a matter of fact, neither the idea of a Privileged Partnership nor a modernization of the CU have been a subject of debate for policymakers, economists, or international relations experts. This paper is a modest contribution to kick off the policy debate about alternatives to Turkey's EU membership by focusing on the upgrade of the CU. Specifically the paper will assess the EC's CU upgrade scenarios in light of the Privileged Partnership ideas raised in Europe. …

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