The Customs Union (CU) between the EU and Turkey came into effect in 1996 and still represents the closest relationship that the EU has with a non-member country, which defines Turkey as a relevant partner for the EU and vice versa. In fact, it has been one of the most important steps in Turkish economic development, after the liberalisation of the 1980s.
In 1963, the signing of the Ankara Agreement drew the framework of the CU and in 1973, an additional Protocol inaugurated a transitional phase. The two parties then decided, in December 1995, that the conditions were fulfilled after 22 years in which their objectives had been trade liberalisation and market-oriented economy.
The main areas covered by the EU-Turkey CU are: free movement of goods, common trade policy, technical legislation, intellectual and industrial property rights, competition, customs, institutional cooperation.
Turkey eliminated existing customs duties and quantitative restrictions on industrial products coming from the EU. For products imported into Turkey from third countries, the latter began to apply the Common Customs Tariff (CCT) of the EU.
A different treatment is granted to agricultural goods, at first not included in the CU: the Association Council of February 1998 has laid down the EC-Turkey trade agreement for agricultural products, where almost 100 groups of products have been listed for lower tariffs. By virtue of that decision, for example, the Union has benefited from certain concessions in the form of tariff quotas for beef and veal: 5,000 tonnes of frozen beef, extending to fresh and chilled beef. But even after 16 years, the World Bank Report (April 2016) points out that “a number of measures provide a high degree of import protection for Turkey’s agricultural products: the average most favoured nation (MFN) tariff is high, at 41.7%, and tariff quotas and price regulation also impede agricultural trade. But if the two parties would liberalize bilateral agricultural trade, some Turkish exports like oils and tomatoes could be more competitive in Mediterranean countries”.
Turkey has to adopt the common EU trade policy, by signing Free Trade Agreements with third countries linked with the EU by previous tariff agreements. This is certainly beneficial for Turkey’s foreign trade (+38% towards the EU countries), even though sometimes third countries may not prefer to grant to Turkey the same concessions granted to the EU.
Parties agreed on Turkey’s adoption of mechanisms in accordance with the European “acquis communautaire”, related to standardisation, measuring, quality, testing and certification. As the Turkish administration completes the harmonisation measures for one good or group of goods (within 5 years), technical barriers are abolished for that particular product.
The Turkish Patent Institute (TPI) was established in 1994 and started contributing to the improvement of the industrial property regime before the CU was concluded. Upon conclusion, however, the country became a party to the related international conventions and adopted additional amendments for trademarks, patent rights and protection of industrial designs and geographical indications.
Prior to the CU decision, the Act on the Protection of Competition led Turkey to implement the key provisions of the EU competition law. An independent Competition Board was created in 1995 to ensure the correct application of the provisions.
Turkey has the obligation to modernize and restructure the customs administration, in terms of automation and new IT systems, which could ensure customs controls to be more effective and in line with the acquis.
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