Customs union process of Turkey and external trading education

ABSTRACT A Customs Union means that goods can move freely as within one customs territory and each party applies the same external tariff for imports from third countries and the same commercial policy. Turkey's Customs Union with the EU covers additional areas like competition, harmonisation of technical legislation, abolishment of monopolies and protection of intellectual property, which make this agreement more than a typical customs union. These additional elements are designed to further integrate the markets and bring Turkey closer to the EU. The Customs Union covers trade in industrial goods and processed agricultural products. However as soon as the Customs Union entered into force, the Association Council was required to set a date for the initiation of negotiations aiming at the mutual opening of the public procurement markets and liberalisation of trade in services between EU and Turkey. Furthermore, the Ankara Agreement, which established an association between the EU and Turkey, envisages the abolition of restrictions on freedom of establishment and on freedom to provide services between the two parties. Negotiations are already underway for the liberalisation of services and public procurement between the parties. Turkey's share in EU's total exports was 2.3% in 1995 and 2.7% in 1999 (the latest available figure). The same figure for imports was 1.7% in 1995 and 1.9% in 1999. As one can see, Turkey's share both in term of import and exports in EU's trade developed positively and in equal manners. As of 1999, Turkey is the EU's 7th biggest export destination (up from 9 in 1990) and 13th 147biggest exporter to the EU (up from 17 in 1990). This shows that both sides profited from the Customs union agreement. For consumers the Customs Union has brought better quality, cheaper products and more variety, because of increased competition in the Turkish market. Consumer protection will be increased as European technical norms are used. Producers and industry also benefit from cheaper and higher quality inputs, as well as access to a stable and large export market. The existence of a large and stable export market proved its importance during the economic crisis of 1998, when Turkey's exports to major destinations other than the EU declined whereas the EU continued to be the principal export market for Turkey and offset some of the negative effects of the crisis The biggest complaints of businessmen in Turkey concern the macro-economic instability which has been persisting for more than 20 years, high inflation, difficulties in access to finance and other kinds of support by the public sector including training and R&D rather than the Customs Union itself. 148 T.C. YÜi4S£Kooâw. * un j^ftt *ü DOKÜMANTASYON MERKEZİ