EU, Turkey sign agreement to upgrade customs union

Turkey and the European Union agreed to modernize their 20-year-old customs union on Tuesday, the two sides having reached agreement to expand their bilateral trade ties.

Turkey has long been seeking to be a part of the Transatlantic Trade and Investment Partnership (TTIP), the lucrative deal still being negotiated between the two economic blocs, the US and the EU.

However, if, as is currently proposed, the agreement excludes Turkey, the Turkish economy is expected to rack up $5 billion in direct losses alone per year, Turkey’s minister for EU affairs said on Feb. 5. Therefore, Turkey’s customs union with the EU has been on the agenda and widely debated recently, as American goods would not be subjected to direct or indirect quotas under a final TTIP agreement reached without Turkey’s involvement.

After a meeting in Brussels on Tuesday, EU Trade Commissioner Cecilia Malmstrom and Economy Minister Nihat Zeybekci announced a roadmap to upgrade the much-debated customs union, expanding it to include services, government contracts and most agricultural goods. Yet, Malmstrom underlined that the TTIP talks are taking place between only the EU and the US, maintaining that the EU will be informing Turkey on the course of the developments. Zeybekci said the trade agreement is too important for Turkey to ignore.

Turkey had threatened to suspend the customs union agreement with the EU on multiple occasions recently.

SOURCE: TODAY’S ZAMAN