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March 25 — A top European Union trade official said the EU is open to including Turkey in the Transatlantic Trade and Investment Partnership (TTIP), although a U.S. trade official said this was unlikely to happen under the Obama Administration.
“Turkey will be able to join TTIP if it can commit to the level of ambition that we've [the U.S. and the EU] agreed on,” Jean-Luc Demarty, director general for trade in the European Commission, said recently at an American Chamber of Commerce (Amcham) Transatlantic Conference in Brussels.
Turkey fears its customs union with the EU—which integrates several sectors of its economy into the EU's common market—could allow American goods outlined in TTIP to enter Turkey tariff-free. But in a bid to address Turkey's concerns, top EU and U.S. trade officials are now saying they consider TTIP to be an “open platform” that other countries can join, much like Trans-Pacific Partnership (TPP). Turkey's membership would solve some of the problems that have emerged in the EU-Turkey customs union agreement, a trade analyst told Bloomberg BNA.
“Turkey made the assumption that the EU-Turkey customs union would be short lived, and accepted asymmetry in the agreement,” Kemal Kirisci, a senior fellow and director of the Center on the United States and Europe's Turkey Project at the Brookings Institution, told Bloomberg BNA March 25.
Kirisci says that deal—concluded 1995—essentially includes Turkey inside the EU internal market for industrial goods, such as television sets and refrigerators, and some processed agricultural goods. Turkey accepted the deal because it assumed that it would eventually join the EU. However, EU-Turkey accession talks have stalled out, but the EU continues to pen free trade agreements (FTAs)—and those deals are having an ancillary effect on Turkey because of the 1995 customs union.
“This problem is not particular to just TTIP,” Kirisci said, “Whenever the EU signs an agreement with a third party, Turkey has to also conclude FTAs with these third parties as well.”
Kirisci said in some cases, the outcomes have been productive, such as when Turkey and South Korea signed an FTA shortly after the EU and South Korea signed their FTA. But in other cases, Turkey hasn't been able to dovetail on the EU's trade deals. For example, the EU-Mexico FTA has led to a situation where Turkey worries that cars made in Mexico will enjoy the same status in Turkey as EU-made automobiles.
“Three years ago, Turkey began to track ships leaving Mexico carrying cars,” Kirisci said. “It's a source of tension.”
Demarty of the European Commission signaled the EU and U.S. are listening to Turkey's concerns, and now consider TTIP to be an “open platform that our respective neighbors can join.”
A high-ranking U.S. trade official agreed, though he ruled out looping Turkey into the trans-Atlantic trade talks in the last months of the Obama administration.
“We make a particular effort to keep Turkey informed about the status of the negotiations because we understand the resonance that TTIP has for Turkey,” Deputy United States Trade Representative Michael Punke said at the Amcham meeting in Brussels. “We also see TTIP as an open platform, but we have a lot on our plate right now, and we are not currently considering other FTA negotiations.”
The EU-Turkey customs union and the U.S.-Turkey Framework for Strategic Economic and Commercial Cooperation (FSECC) both oblige EU and the U.S. trade ministers to consult regularly with Turkey. Still, Turkish officials say they want to see clearer signs of Turkey's interests being taken into account in the trans-Atlantic trade deal.
Kirisci of the Brookings Institution said both the U.S. and the Turkish sides recognize that “TTIP isn't just around the corner,” and that in terms of timing, the EU-Turkey customs union is likely to come before TTIP's implementation.
“The Turkish side recognizes the complexity of making TTIP an open platform,” Kirisci said. “It has diverted its attention towards upgrading the customs union.”
To that end, Turkey and the EU agreed to continue work on upgrading the customs union and to “re-energize” Turkey's EU accession bid in the EU-Turkey migration deal reached March 18.
But the end goal is still membership in TTIP, Kirisci said.
“My understanding is that if the EU-Turkey customs relationship is upgraded to include services agriculture, and public procurement, it would be almost like Turkey is part of TTIP,” Kirisci said. “Of course, Turkey would have to be incorporated into an eventual TTIP agreement.”By Michael Scaturro
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EU-Turkey FTA impact assessment available at http://ec.europa.eu/smart-regulation/roadmaps/docs/2015_trade_035_turkey_en.pdf.
Text of EU-Turkey migration deal reached March 18 2016 available at http://www.consilium.europa.eu/en/press/press-releases/2016/03/18-eu-turkey-statement/.
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