Turkey wants to play a part in the pact but has a few issues to sort out.
The two trade partnerships that the Obama administration is simultaneously pursuing, the Trans Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP), are both economic and strategic projects. From an American perspective, the purpose of these partnerships is to try to offset China’s rise as the main Asian and global power of the 21st century.
Thus the TTIP agreement is seen as a way to consolidate the Western alliance and create an economic counterweight in the West to the rising Asian economy. This is a very critical aspect of TTIP, especially if viewed from a Turkish perspective. Ankara is also interested in the positive effects the agreement might have, based on the nature of the treaty and what it might encompass. In other words, Turkey would certainly not wish to be left out of such a gigantic economic project that involves its Atlantic allies.
TTIP is more than just an economic project. If TTIP negotiations are rounded off successfully, the entente between the two economic giants, the US and the EU, will have strategic political overtones as well. In fact some commentators have referred to TTIP as an “economic NATO”. This description is not far off seeing as TTIP could become a major pillar of the Atlantic community.
The Turkish government views TTIP along these same lines. The kind of terminology used would seem to indicate that Turkey’s elites consider being included in the TTIP agreement a way of strengthening Turkey and its partners’ reciprocal commitment within the Atlantic community. It has been estimated that Turkey’s long-term revenue would drop by .27% if the agreement only involves a removal of tariffs. If non-tariff barriers are also removed, the drop would be closer to 2.5%. Yet the more pertinent issue is Turkey’s place in the Atlantic community The TTIP negotiations started at a time when Turkey, as substantiated by a recent World Bank report, was seeing diminishing returns from its customs union agreement with the EU. It has been 20 years since the agreement was signed and it has served Turkey well. Yet with the proliferation of the free trade agreements signed by the EU with third parties some of Turkey’s advantages have been eroded.
The new free trade agreements between the Union and third parties were not automatically extended to Turkey. Ankara had to negotiate its own trade agreements with such countries. At present, countries competing directly with Turkey over EU trade, such as Mexico, South Africa, Algeria and most importantly South Korea — all of which have free trade agreements with the EU, have not signed agreements with Turkey.
The World Bank’s report recommended that the customs union be extended to services and include special provisions for agriculture. Turkey expected to be granted the right to join TTIP, arguing that it was entitled to do so as a result of the customs union. Then, when this route looked unlikely, it also tried to engineer a free trade agreement with the United States. At this point, the EU and the US have not yet agreed on whether TTIP will be open to the accession of third countries.
Reaching a free trade agreement with the United States did not prove any simpler. The economic positives and negatives of the potential agreement were outweighed by political obstacles that thwarted its chances. The current climate in the US Congress makes it very unlikely that the US administration would support or approve a free trade agreement with Turkey.
Presently the inauspicious political climate rules out any moves towards Turkey’s inclusion in the TTIP negotiations or the chance of coming up with a formula that would grant Turkey a place in the final agreement. All the more so since the existing, negatively charged political atmosphere between Ankara and Brussels inhibits a reasonable and solution-oriented dialogue between the partners.
This is unfortunate on several levels. Turkey’s geopolitical importance for the Atlantic alliance is not going to diminish considerably any time soon. Its prospective membership in the European Union was also instrumental in shifting Turkey towards becoming a bona fide member of the Atlantic community and a stakeholder in its economic system and its values.
The gradual eclipse of the EU project due to deteriorating relations between the ruling AKP in Turkey and major powers within the Union stalled Turkey’s reform process. If Turkey could be a party to TTIP or its inclusion could be secured even conditionally, this may help kick start the reform process. A revitalized reform process would then put the Turkish business community and civil society back in play, just as they were at the peak of Turkey’s passions for EU membership. In turn, this would lead to a new wave of reforms.
These reforms would not be limited to the economic realm. Currently much of the ill-feeling nurtured towards Turkey in some European or American circles or the excuse that’s often quoted for not fully engaging with Ankara is a result of the country’s considerable democratic shortcomings. Once Turkey returns to the virtuous path of building a liberal political order, its concerns would — or at least should — get a more sympathetic welcome in Brussels and Washington.
In the meantime, there are a number of things that Turkey must do before TTIP is finalized. As Sinan Ülgen, chairman of the Istanbul-based Center for Economics and Foreign Policy Studies, suggested in a meticulously argued paper, those countries that have close economic ties with either the US or the EU must focus on making TTIP an agreement that will not harm their interests. For countries such as Turkey, Norway, Mexico and Canada, Ülgen offers these suggestions: help design an accession process that can resist politicization; promote the principle of mutual equivalence to eliminate non-tariff barriers; encourage the design of a flexible dispute settlement mechanism; and form a TTIP caucus or a joint platform to directly interact with Washington and Brussels.
Turkey should be included in TTIP both for its economic prospects and to consolidate its place once and for all in the Atlantic community. In light of the economic and political developments that have taken place over the course of the last few years, achieving this goal ought to be a priority not just for Ankara but for Brussels and Washington as well.