CUSTOMS UNION BETWEEN TURKEY-EU

The Customs Union creates the closest economic relation between the European Union and a non member country

The Ankara Agreement envisioned three phases for Turkey’s gradual accession to the EU Common Market through the establishment of a custom union:

Preparatory phase (1964 – 1970) Transition (1973 – 1995) Final phase (1996 to full economic integration).

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CUSTOMS UNION BETWEEN TURKEY-EU

The Additional Protocol came into force on the 1st January 1973

The Customs Union between the European Union and Turkey came into force on the 31st December 1995 with the Decision No: 1/95 of the Association Council (DAC).

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Framework of the Customs Union (1)

• The Customs Union covers only the industrial and the processed agricultural products.

• Traditional agricultural goods are outside the scope of the Customs Union.

• Turkey has eliminated all customs duties as well as quantitative restrictions applied on imports of industrial products from the Community.

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Framework of the Customs Union (2)

For products imported into Turkey from third countries, Turkey started to apply the Common Customs Tariff (CCT) of the Community.

Turkey has to align its trade policy with the EU’s preferential trade regimes especially Free Trade Agreements

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Turkey-EU Trade relations(latest statistics)

• The EU and Turkey enjoy strong trade relationship.

• The EU is Turkey's first import and export partner.

In 2010, Turkey imports 54,6 Million Euro from EU (share in total import : 39,3%) Turkey exports to the EU 39,8 Million Euro (share in total export: 46,3%)

• Turkey ranks 7th in the EU's top import and 5th in export markets.

In 2010, EU imports 42,3 Million Euro from Turkey (share in extra EU-27 import: 2,8% ) EU exports to Turkey for 47,6 Million Euro (share in extra EU-27 export: 4,7% )

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Turkey-EU Trade relations(latest statistics)

EU share of Turkey’s total export

• 1995: 56,4 %• 1996: 54,1%• 2000: 56.4%• 2005: 56,3%• 2006: 56%• 2007: 56,3%• 2008: 48%• 2009: 46%• 2010: 46,3%

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EU share of Turkey’s total import

• 1995: 50,5 %• 1996: 55,8 %• 2000: 52,3 %• 2005: 45,1% • 2006: 42,6%• 2007: 40,4%• 2008: 37%• 2009: 40,2%• 2010: 38,9%

PROBLEMS ENCOUTERED WITHIN THE CUSTOMS UNION

• Free Trade Agreements (FTA)

• Visa issue

• Transport quotas

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Free Trade Agreements

• Since Turkey is not a EU Member, it is not taking part in the decision making process.

• According to article 16 of the Decision Association Council 1/95, Turkey has to adopt the common trade policy of the EU.

• Trade diversion• Pressure on the competitiveness

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VISA ISSUE AND TRANSPORT QUOTAS

• Difficulties encountered by Turkish citizens in their visa applications.

• Application of Transport quotas goes in contradiction with the principle of free movement of goods.

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