“Wrong Signal”: Updates to EU-Turkey Customs Union Jeopardized

Written by | Wednesday, August 2nd, 2017

Germany is pushing the European Commission to halt talks with Ankara over revamping the customs union, saying that it would send a “wrong signal” to continue the negotiations. The German government wants the EU executive to suspend preparatory work to modernize the EU-Turkey Customs Union, which entered into force in 1995 but encompasses only certain categories of goods. In addition to providing for a common external tariff for these categories, the union also foresees that Ankara will align to the EU law in several essential market areas with focus on industrial standards.

However, bilateral trade between the two countries has soared in recent years and the agreement needs to be updated. At the end of 2016, the EU Commission asked the European Council to kick start new negotiations with the aim to update the customs union. However, Germany says that in light of the most recent political developments in Turkey, the talks should be “frozen” and other measures should be implemented, such as financial pressure on Ankara should be intensified. Berlin moreover says that Turkey’s pre-accession aid (IPA) should be targeted “even more towards supporting democracy and the rule of law” and, may the need arise, the European Commission should also suspend all pre-accession aid to Ankara.

Germany is said to expect the Commission to “shift funding away from Turkey in a way that is meaningful compared to the overall funding Turkey receives under the IPA schemes”. Turkey’s main exports to the EU and imports from the EU are mostly industrial, namely 95% of all its imports and exports. Since 1996, Turkey’s gross domestic product has gone up 4 times, making it one of the fastest growing economies in the world.

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