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Assessment of the Customs Union

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After the implementation of the Customs Union, on one side, Turkey’s economy-wide nominal protection rate (NPR) (1) in trade with the EU as well as with third countries has decreased substantially. On the other, also the EU lifted nominal tariff rates on imports of industrial goods from Turkey, in 1971.

Before the accomplishment of the CU, Turkey’s import regime was very time consuming: the customs administration used to keep track of trade on a piece of paper and the declarations had to be registered at the customs offices by the declarants. All shipments had to be inspected separately. Traders were often likely to pay an additional amount of money for speeding up the process. We have collected the witness of the owner of an import-export Turkish company, Agreks Tekstil A.S., that has been providing textile products to European clients for 40 years, which means it has worked both before and after the entry into force of the Customs Union. Mr. Elvio Paradiso, a representative of the Italian-Levantine historical presence (2) in the Ottoman Empire and now in Turkey, explained us that in the ‘80s, the average time for transferring goods from Izmir to Milan was 12 days, while today the travel takes only 5 days; the difference of 7 days has to be completely attributed to the complex control system in the customs. The exporters’ nightmare was the system of quotas which was imposed at the time from the EU to Turkey: at the beginning of every year, the quotas for each product were communicated, with a very detailed distinction among the single textile heads (e.g.: socks, towels, cotton shirts, polyester shirts, etc.). The result was that all the producers and exporters were rushing for sending the merchandise in Europe in the first half of the year, in order to be encompassed into the quotas thresholds; it even flourished an incredible commerce of quotas. The micro-controls in the customs facilitated the spread of corruption which, after the Customs Union enhancement, has progressively and profoundly decreased. Last but not least, Paradiso has underlined the additional costs of two employees dedicated to the customs formalities. In the 2000s, the exporters have improved their capacity of planning and providing products of high quality, also thanks to the overall simplification of the customs system and the consequent creation of a single economic space.

Until the formation of the CU, Turkey did not have the technical infrastructure required for the elimination of Tariff Barriers to Trade (TBTs). The quality infrastructure was not linked up with international networks and the Turkish accreditation body was not recognized internationally. Similarly, until the adoption of the EU–Turkey CU, Turkey had neither specific competition legislation nor protection of intellectual property rights. Finally, prior to the formation of the CU, Turkey did not even have rules and regulations on anti-dumping, countervailing duties, surveillance, safeguards measures, administering quantitative quotas and procedures for officially supported export credits as in the EU.

@manu_scogna10


1 The nominal rate of protection is the percentage tariff imposed on a product as it enters the country (Encyclopaedia Britannica)

2 The Italian-Levantine community dates back to the 4th Crusade (1204) and it is then the oldest Italian colony in the world, mainly descending from the Maritime Republics of Genoa and Venice. The survived 5,000 Italian-Levantines live essentially in Istanbul (3,000) and Izmir (2,000). Their main characteristics are to have maintained the Catholic faith in a Muslim country, to continue speaking Italian (in addition to Turkish, Greek and French) and to originate from Italian families of bankers and traders, which is the case of Paradiso.

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