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Briefings

Turkish option: A second rate customs union

in | by Hugo Dixon

Turkey has a “customs union” for goods with the EU. It is not bound by the CAP (and it’s agricultural products are outside of the customs union), it doesn’t pay fees and there is no freedom of movement of people between Turkey and the EU.

Unfortunately, there is a catch – or rather, several of them. The Turkish customs union covers only goods, not services or finance. So a Turkish-style deal would be denying us a big part of the single market. What’s more, the quid pro quo of even this limited access is that Turkey has to follow the EU’s rules for the production of goods – without any say on what those rules are. A pattern should be familiar by now: to the extent that a country gets access to the single market, it has to follow the EU’s rules.

Turkey’s customs union with the EU – a key difference from the Norwegian or Swiss models – creates further problems. It requires Turkey to align its trade policy with the EU’s, seeking to cut free trade deals on goods with whomever Brussels makes deals.

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The snag is that Turkey does not have any vote on which free trade deals the EU pursues and so no way of making sure they satisfy its interests. Nor do the EU’s trading partners necessarily have an incentive to open their markets to Turkey, as they can simply cut deals with the EU and get access to the Turkish market by sending goods to the EU and then on to Turkey. They have often delayed several years before signing trade deals with Turkey – meaning its businesses were at the back of the queue when it came to penetrating new markets.

It is only possible to understand such a bizarre arrangement when you realise that the Turkish customs union was intended as a stepping stone to full EU membership. It is not a good solution as a step away from EU membership. It would be even worse for Britain than the Norwegian or Swiss options.

This is an excerpt from “The In/Out Question: Why Britain should stay in the EU and fight to make it better” by Hugo Dixon. 

Factchecking by Sam Ashworth-Hayes