ASLI ŞENTARHANACI & ŞENİZ KARAHAN
The Customs Union between Turkey and the European Union
On January 1st 1996 the Customs Union between the European Union and Turkey came into
effect, thereby creating the closest economic and political relationship between the EU and
any non-member country.
What does the Customs Union do?
Essentially the Customs Union gives Turkey improved access to the group of countries
previously known as the Common Market. It guarantees the free circulation of industrial
goods and processed agricultural products. Customs duties and charges have been
abolished and quantitative restrictions such as quotas are prohibited. The Customs Union
involves harmonization of Turkey's commercial and competition policies including intellectual
property laws with those of the European Union and it extends most of the EU's trade and
competition rules to the Turkish economy.
Level playing fields' are being established with Europe
The Decision taken by the Association Council on 6 March 1995 which constitutes the legal
basis for the Customs Union consists of 66 articles, 16 statements and 10 annexes. A
Customs Union Joint Committee is the main body responsible for ensuring that trade
operates smoothly, dealing with technical issues and any disputes. The Committee meets on
a regular basis.
The chief characteristic of the Customs Union is that goods will move freely between the EU
and Turkey without being subject to customs duties or quantitative restrictions; it covers all
aspects of trade and commercial policy to ensure there is a "level playing field" for Turkish
and European firms. The main features of this Decision are:
The elimination of customs duties, quantitative restrictions and measures of equivalent effect
on trade in industrial goods, including processed agricultural products, between Turkey and
the EU.
The adoption by Turkey of the EU's Common External Tariff in its trade with third countries.
The adoption by Turkey of measures equivalent to the EU's common commercial policy.
Progressive alignment of tariffs by Turkey in line with the EU's preferential trading
arrangements with certain third countries.
The adoption by Turkey of customs provisions in line with those of the EC.
Agreed competition rules and the alignment by Turkey of its legislation in this area with that
of the EC.
The adoption by Turkey of legislation in the field of intellectual property protection to secure a
level of protection equivalent to that in the EC.
The abolition by the EC of Voluntary Restraint Arrangements in trade in textiles with Turkey.
The formation of an EC/Turkey Customs Union Joint Committee and the adoption of other
institutional arrangements to enable Turkey to be properly informed of, and formally
consulted about, policy formulation in the EC on matters which affect the Customs Union.
During the Association Council meeting of 6 March 1995, a Resolution was also adopted in
accompanying areas which provides for the intensification of cooperation between the
European Union and Turkey in the fields which are not covered by the Customs Union i.e.
industrial cooperation, Trans-European networks, cooperation on energy, transport,
telecommunications, agriculture, environment, science, statistics, matters relating to justice
and home affairs, consumer protection, cultural cooperation, information and communication.
During the same meeting of the Association Council, the European Union made a statement
about financial cooperation with Turkey, in order to help it to restructure its industrial sector to
the new competitive situation created by the Customs Union and improve its infrastructure
linkages with the European Union as well as to reduce the difference between its economy
and that of the Community. This financial cooperation amounts to some 2.2 billion ECU's for
a 5 year period.
What the Customs Union has meant so far
Upon entry into force of the Customs Union Decision, Turkey cut all duties and equivalent
charges on imports of industrial goods from members of the EU to zero. Furthermore, Turkey
harmonised its tariffs and equivalent charges on the import of industrial goods from "third
countries" with the Common External Tariff of the EU, and will progressively adopt EU
commercial policy and preferential tariff policies within 5 years. For certain specifically
identified "sensitive" products Turkey will maintain rates of protection above those specified
in the Common Customs Tariff for imports originating in third countries for up to five years.
These products include mainly ceramic products, motor vehicles and footwear.
As a result of these measures Turkey's weighted rates of protection for imports of industrial
products have fallen from 5.9% to 0% for products originating in The EU and EFTA and from
10.8% to 6% for products originating in third countries. These rates will drop further to 3.5%
after the fulfilment by the EU of its commitment under the Uruguay Round of GATT. Although
agricultural products are excluded from the treaty, Turkey is progressively adopting many
aspects of the Common Agricultural Policy. The EU will take as much account as possible of
Turkish agricultural interests when developing
its agricultural policy.
Progressive
improvement, on a mutually advantageous basis, of the preferential arrangements for the
trade in agricultural products is also envisaged.
Harmonisation work so far with the EU's commercial policy includes monitoring and
safeguarding measures on imports both from the EU and third countries, the management of
quantitative restrictions and tariff quotas and the prevention of dumped and subsidised
imports.
Turkey has adopted EU rules and legislation on competition. Subsidies through State
resources in any form whatsoever which distort or threaten to distort competition are banned.
However assistance to promote economic development in Turkey's less developed regions
and assistance intended to promote cultural and heritage conservation and which does not
adversely affect competition will be allowed. On the other hand Turkey will progressively
adjust any state monopoly of a commercial character so as to ensure that no discrimination
exists in the conditions under which goods are produced or marketed between nationals of
EU member countries and Turkey.
Turkey has harmonised its laws with EU legislation eliminating technical barriers to trade.
There is now effective co-operation between Turkey and the EU in the fields of
standardisation, calibration, quality, accreditation, testing and certification.
Turkey has harmonised its legislation on intellectual, industrial and commercial property to
EU standards and has implemented laws covering consumer protection, and the protection
of competition. Both sides are banned from using internal taxes as indirect protection
mechanisms and from using tax rebates as export subsidies.
The Customs Union is the natural outcome of Turkey's history
Turkey is the only fully pluralist, secular democracy in the Muslim World and has always
attached great importance to developing its relations with European countries. Historically
Turkish culture has exerted a powerful influence over much of Eastern and Southern Europe.
Turkey first began to 'westernize' its economic, political and social structures in the 19th
Century. After the First World War it chose Western Europe as the model for its new modern
and secular republic.
Since that time Turkey has closely aligned itself with the West. It is a founder member of the
United Nations, a member of NATO, the Council of Europe, the OECD and an associate
member of the Western European Union. Turkey has played and still plays a key role in the
defense of the European continent and the principal elements of her foreign policy have in
general converged with those of the Community. Turkey, for example, played a pivotal role in
assisting the UN effort during the Gulf War at considerable economic cost to itself. This
important area of co-operation has run parallel with a deepening economic and political
relationship.
Turkey is the EU's longest standing associate, and for the past 50 years, Turkey has
participated in the activities of practically all international bodies involved in European
integration.
In 1959 Turkey made its first application to join what is now the European Union. This
resulted in the Ankara Agreement of 1963 which formed the basis for the current relationship
and, by recognizing Turkey's eligibility for membership, paved the way for subsequent
negotiations.
Tariffs barriers come down
In 1973 a 22 year timetable was set for achieving a Customs Union prior to full membership.
The European Union abolished all its customs duties on industrial goods, with a few
exceptions, and Turkey has enjoyed free access to the European Union since then. On the
other hand, the EU granted a preferential regime on imports of agricultural and some
processed agricultural products originating in Turkey. Turkey has had free access to the
European Union since then. It began dismantling its tariff system in the early 1970s and
accelerated this process from 1987 onwards.
TURKEY NEEDS TIME
Turkey will not be ready either before another 10 years of intensive preparation. It will need
above all a mental revolution in order to become a much more European-like society-it has to
free itself from the “oppressine” of state and military tutorship, from a still persuasive
authority prevails and the role of state is dramatically constrained. It has to learn the culture
of “self-criticism-.
These changes require a new generation of politicians and a new political class that is
devoted to the public good and not to personal enrichment. They require a revolution in the
educational system, with more emphasis on critical analysis/creativeness and less on
memorising texts/lectures. Turkey spends only about %2 of GDP on education, less than half
of what the EU 25 spends and continues to have an illiteracy problem with women.
Consequently; its educational standards lag far behind those of any of the other present and
future EU members.
Turkey needs to understand that there is no way of “imposing” itself as a new member. It’ s
approach to EU membership requires more humility and less 1arrogence” –as long as
leading Turkish politicians publicity declare that the EU will only become global player,
develop an effective energy policy and close relations with the Middle East and Central Asia
with Turkey as an EU member, Turkey is not politically mature for membership.
Add to these basic preconditions the need to transpose the EU occurs into Turkish legislation
and -more important- to efficiently implement it, to go ahead with large-scale privatisation of
public companies, utilities etc. To take a less nationalistic and protective attitude towards
“foreign” investment and to fight rampant corruption more efficiently. Turkey must
substantially step up the dialogue and exchange between Turkish and EU society and thus
join the “European mainstream” so must the EU.
Özgen HAZAR & Çağdaş GÜNDÜZ
2000461097
&
2001461097
INDEX
1)Econonomic Integrations
A) Types of Economic Integrations
 Free-Trade Area(EFTA)
 Customs Union
 Common Market
2) Ankara Treatment
3) What is Customs Union?
A. Benefits of the Customs Unions for Turkey
B. Turkey-EU Customs Union
C. Table about Foreign Trade
4) Conclusion
ECONOMIC INTEGRATIONS
A) Types of Economic Integrations
1. Free-Trade Area (EFTA)
On 20 November 1959,seven ministers, who were not the member of EU, had signed on an
agreement about free trading in Stockholm. What is called EFTA came into force on 3 May
1960.EFTA members have had an important role in Economic Integration for years. The
main point of the agreement is free circulation of capital, goods and services between
members of EFTA.
The other definition for this term is that; the establishment of a free trade area aims to
improve conditions for investment and trade, by having a single set of trade rules, a single
tariff and a single set of administrative procedures.
2. Customs Union
In a common meaning, there will be no tariffs between parties when they trade agricultural
goods, industrial goods which corresponded to 93% in value of trade between EU and
Turkey in 1995. Customs duties and charges having equivalent effect applied to industrial
products imported from EU and EFTA countries were abolished. The arithmetic average of
the rates valid for these countries was 10 % and the average weighted rate 6 %
approximately before abolition.
3. Common Market
The common market is a very complex subject, and it is quite unlike any other
organization the world has known up till now. it is more than a customs union but it is not a
federation. it has authorities, rules, and procedures but no army or police. it consists of
independent nations but they are no longer free to do whatever they like except ultimately at
the cost of withdrawing from community. It cannot be defined, only described and the best
way to describe it as a group of states working closely together and arriving at some of their
decisions jointly through common institutions, of which the most important are the
commission and the council, which actually takes them, both after the great deal of
consultation with experts from all the member states.
2) ANKARA AGREEMENT
Turkey’s relationship with EU as an associate member started with the Ankara
Agreement signed in 1963.It continued with a prolonged preparatory period and entered into
a new phase with the establishment of Customs Union at the beginning of 1996.
It does not commit full membership for Turkey. Ankara agreement envisages the possibility
of ultimate full membership for Turkey at a future unspecified date, provided that Turkey
proves to be capable of fulfilling her commitment as stipulated in the Agreement.
According to the Ankara treaty, the association was divided into three phases;
1. a. preparatory phase (1964-1969)
2. a transitional phase(1973-1995)
3. a final phase (Customs Union period)(1996-present)
Purpose of these phases that;
1) to improve Turkish economy and prepare for the second stage.
2) covers Turkey’s and the EC’s trade and financial commitment to each other.
3) CU period it will be cleared…
3) What is Customs Union?
The customs union is a single trading area where all goods circulate freely, whether
made within the EU or imported from outside. The customs officer's job is complex. The EU
sets its import tariffs and other customs rules on the basis of international agreements
(mostly those negotiated within the Customs Co-operation Council and the World Trade
Organization). In principle, these apply to all imports. The customs union was one of the EU's
earliest milestones. It abolished customs duties at internal borders and put in place a uniform
system for taxing imports. Internal border controls subsequently disappeared. Customs
officers are now found only at the EU's external borders. They not only keep trade flowing,
but help to protect the environment, our cultural heritage and plenty besides.
A) Benefits of the Customs Union for Turkey:
It is clear that the Customs Union had a certain impact on the increase in imports.
Turkey’s export to the EU totalled $11.5 million; an increase of 3.7%, below the 7.4%
increase in total exports. This is due to the economic stagnation in continental Europe,
especially in Germany, because Germany has the biggest share our exports in the EU.
Meanwhile, export of textile Turkey’s most competitive sector, also increased by only 4.2%.
EU countries have always played an important role in the foreign trade of Turkey, having a
share of over 45-50% in the overall trade. Especially the adoption of Turkish economy to
EU’s competition affects an increase in Turkish production quality and it improves the trade
between Turkey and EU.
B) Turkey-EU Customs Union:
Turkey applied for association with the European Economic Community already in 1959,
one year after the enforcement of the Treaty of Rome. The Ankara Agreement of 1963 and
the Additional Protocol of 1970 were two important documents, which identified modalities
and calendars ensuring the future customs union and confirmed the ultimate aim of full
membership.
Turkey does not apply any quantitative restriction outside textile quotas. The only
exception to the application of the Common Customs Tariff to industrial imports from third
countries concerns a number of sensitive products. The Association Council authorised this
exception in the Decision No: 2/95 for a limited period of five years until 2001.
A system parallel to the one applied by EU was introduced in imports of processed
agricultural products. Accordingly, the agricultural and industrial components of a customs
duty are taken separately. The industrial share enjoys duty-free treatment in imports from EU
or EFTA countries, and reductions in imports from third countries. Protection through
individual Turkish rates of duty will continue for the agricultural component. Moreover, the
target agricultural component envisaged in Decision No: 1/95 has been reached with the final
reduction made effective as of 1 January 1999. Freedom of movement for agricultural
products is one of the fundamental aims of the Ankara Agreement, which reaffirmed in the
Customs Union Decision. In this respect, consecutive negotiations on better market access
possibilities for agricultural products have been held between the parties within the period of
1993-1997. A free trade agreement covering E.C.S.C. (European Coal and Steel
Community) products was signed between EU and Turkey in 1996. The creation of a
customs union was the basis for the abolition of textile quotas formerly affecting Turkish
exports to EU. As an indispensable condition to prevent trade diversion towards the
Community, Turkey had the obligation of adopting a similar system in her imports from third
countries. Consequently Turkey was led to apply quantitative restrictions or surveillance on
imports of textile and clothing products from 52 countries. Turkey applies these textile quotas
imposed by the European Union in a very liberal manner.
C)Tables About Foreign Trade:
This part will be shown by Powerpoint.(If you want to take any information about these
figures ,you can check ( www.dtm.gov.tr)
Conclusion:
Turkey’s final goal in her relations with the EU is not the CU:it is full membership.The CU
represents the first stepping stone for the country full integration in the EU.