Customs Union's harms and the new period…. Benefits of updating

The Customs Union agreement, signed by that period's government without thinking ahead, has been causing serious harm since 2002 when our economy started to rise.

Due to its restrictive effect over our trading volume, we had been left outside of the free trade agreements between the EU and other countries, causing our country to experience great losses.

The administration in charge of economy was aware of trade loss circumstances, and had taken up a position on the matter of making necessary regulations in the Customs Union, especially right before the Transatlantic Trade and Investment Partnership (TTIP) agreement, planned to be established between the EU and US. Moreover, during some periods, it was stated that in the case we are not included in the TTIP agreement, the cancelation of the Customs Union agreement might even be on the agenda.

Since Turkey started to participate in the Customs Union, our country has been obliged to give various privileges to the countries that made agreements with the EU within the context of the Common Customs Tariff, while getting no significant privileges. On top of all this, our country is left face to face with problems caused by the cheapening of the imported goods, like the increase in the foreign trade deficit and the failure in developing the local industry at the desired levels.

In the same way, the country administrations, which are exempted from the customs tax that will be given to Turkey due to the agreements between them and the EU, prefer to continue to focus on exporting as their main trading activity with Turkey. While this case negatively affects the foreign investment levels, it also has a rising effect on the foreign trade deficit and causes our economy to grow less than its original potential.

Moreover, the negative aspects, which are caused by the free trade agreements that became popular in the last 2-3 years, are being added on top of these types of effects that are caused by the Customs Union agreement. Such that, countries, that made a free trade contract with the EU, like Mexico, South Africa and Algeria, don't steer towards making an agreement with Turkey. Turkey had accepted privileges that will be given to the countries the EU made an agreement with within the context of the Customs Union agreement. But when the matter is receiving privileges from the countries in question, Turkey returns empty handed.

For example, as of today, the countries like Mexico, South Africa and Algeria, can bring goods to the EU and Turkey's markets with an average of 4.2% customs tax within the agreement made with the EU. While those countries receive the lowest customs tax from EU-branded goods within the context of the agreement with them, they are able to levy 50-60% customs tax. In this case, as it can be perceived, it is causing serious losses from the point of our exporters and our country's economy.

Within the context of updates, which will have our country on the same level as the others that are a part of the Customs Union, is Turkey's active participation in the EU's advisory and decision making mechanisms. Thus, our country won't be left outside of the Free Trade Agreements between the EU and other countries. Moreover, the steps, which are necessary for finding solutions to complying with the FTAs in the previous periods and which are necessary for including Turkey in these agreements, will be taken.

In the same way, while the quota limitation, which was being implemented in the highways during the update process, will be lifted, there will be initiations towards deepening our trading relations in the agriculture, public procurements and services. On top of that, Turkey's inclusion to the Transatlantic Trade and Investment Partnership (TTIP) Agreement, which is a matter of importance, will be provided.

As of the results, all these updates will provide a critical increase in our country's exportation to both EU and the other countries that had and will make an FTA with the EU. Moreover, as our country will be in the deciding mechanism, preventive precautions related to matters leading up to our disadvantage can be taken. In short, thanks to the updates in the Custom Unions, which had been a burden on our country for a while, a new period, which will have Turkey achieve critical gains, will begin.