EU-USA TTIP and Turkey

The membership process of Turkey for European Union (EU) has a long history.  The membership of European Economic Community negotiation has begun in 1965. Turkey applied for full membership of the EU in 1987 and negotiations began in 2005. Because of this lengthy and problematic process, Turkey and the EU signed the Custom Union Agreement (CUA) in 1995. The main purpose of the agreement was to bring Turkey into the European Custom Union. Currently, the custom union consists of 27 EU members and Turkey.

In previous years, the EU has signed a couple Free Trade Agreements (FTA) with various countries. As a result of FTAs, while other countries gained privileges to trade with the EU and with Turkey through the CUA, Turkey stayed out of those FTAs because some clauses of the CUA do not give any privileges to Turkey.

Nowadays, as a result of multilateral trade agreements performed by the WTO, lots of countries have opened negotiations s through FTAs. In this context, On February 13, 2013 Barack Obama, President of USA, Jose Manuel Barroso, President of the European Commission and Herman Van Rompuy, President of the European Council, announced a decision to establish a comprehensive trade and investment partnership between The USA and The European Union.

USEU

At that moment, The Turkish Government has a concern about the enclosure of The TTIP, will TTIP affect Turkey directly or not? Since the previous FTAs were signed with relatively small countries, such as Mexico and South Korea, they did not have much of an effect. But GDP of the USA and the EU combined consists of almost half the entire world’s GDP. Considering the size and the portion of trade between the USA and the EU, the TTIP will generate a spillover effect both all over the world and their nearby economic geography.  A research study made by IFO Institute, shows that in long term TIPP will have a negative welfare effect on Turkey’s GDP by 2.5 %.  

Figure

At that stage, it is not yet known whether the TTIP will give a privilege to the USA with Turkey. According to Nihat Zeybetci, Minister of the Economy, if a third country signs TTIP with the EU, it will have an automatic privilege that enables it to trade with Turkey as a member of the Custom Union. But, since Turkey is not a member of the EU, it will not reap the benefits

In May 2013, Mr. Erdogan, Prime Minister of Turkey, discussed the TTIP’s effects on Turkey. Joe Biden, Vice President of USA, stated that they agreed to negotiate a FTA between USA and Turkey, parallel to the TTIP with EU, but it was too late for a triangulate the deal between Turkey, the US, and the EU. On the other hand, Turkish Government has decided to review clauses of the CUA with the EU.

Sources:

http://www.cesifo-group.de/DocDL/forum2-13-special3.pdf

http://www.europeaninstitute.org/October-2013/turkey-does-not-want-to-be-left-out-from-the-us-eu-trade-talks-1011.html

http://www.brookings.edu/research/opinions/2013/04/15-free-trade-turkey-kirisci

http://www.washingtoninstitute.org/policy-analysis/view/now-is-the-time-for-a-u.s.-turkey-free-trade-agreement

Picture : http://www.euintheus.org/wp-content/uploads/2013/02/EU-Focus-The-European-Union-and-the-United-States-612×336.jpg

http://ec.europa.eu/trade/policy/countries-and-regions/countries/united-states/

Advertisements

About talakaci

http://lnkd.in/dJ_BB4x
Image | This entry was posted in Uncategorized. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s