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Turkey in 2015
Feb 4 2015 | Category: Expert Roundtables UNITEE - Image 2013 © UNITEE

Latest developments in EU-Turkey relations

From the political turmoil of spring 2013 to President Erdogan electoral victory 2014, Turkey’s internal political situation has had undeniable effects on the economy and business environment. Nowadays, it is the turn of the geopolitical threads linked to the civil war in Syria, the rise of the ISIS but also the situation in Russia and energy supplies to attract the Media’s attention.
UNITEE, the New European Business Confederation organised its annual expert roundtable “Turkey in 2015”, on 3rd of February 2015 in Brussels, to discuss how the current developments impact on the business and investment environment in Turkey for European companies.

The discussion was joined by:

  • Alfio ANZALONE, Bilateral trade relations with Turkey, DG Trade
  • David BORRELLI, MEP
  • Jean Christophe FILORI, Head of Unit Turkey, DG Neighbourhood and Enlargement Negotiations
  • Adem KUMCU, President of UNITEE
  • Giles PORTMAN, Turkey advisor EEAS
  • Dirk VANTYGHEM, Eurochambers
  • Serdar YESILYURT, TUSKON, Brussels representative

 

Foreign and Accession Policy

Jean Christoph FILORI commented that concerns about the rule of law, freedom of expression and all the Cyprus related issues are not conducive to progress in the accession negotiations. This provokes frustrations on both sides and as a result, the process is almost frozen in terms of opening of chapters. This certainly affects also the leverage of the accession process in Turkey. Nevertheless, work continues and the EU Commission keeps engaged with Turkey to encourage alignment on chapters 19 (Employment and Social policy), 23 (Judiciary and Fundamental rights), and 24 (Justice, freedom and security). As regards chapter 17 (Economic and Monetary Policy), there are some chances that this chapter can be opened in 2015, provided the overall political environment mentioned before allows for it. In the meantime, it is crucial that we deepen cooperation with Turkey in all areas of joint interest where progress is both needed and feasible: economy and trade (reform and modernise the Customs Union and set up a genuine high level economic dialogue), visa and migration policy (good progress in the context of the visa dialogue aiming to achieve visa liberalisation), foreign policy (including counter-terrorism) and energy policy.

Giles PORTMAN added that even beyond the accession talks, Turkey is an important partner in a very turbulent region. The new High Representive Mogherini is pursuing a much broader approach to EU-Turkey relations, taking into consideration its key role in solving problems in the Middle East. Despite differences in opinion, e.g. on Egypt, international cooperation can be a way to improve EU-Turkey relations, and facilitate better dialogue.

 

Trade

David BORRELLI pointed out that the EU is Turkey’s first trading partner. 71 percent of Turkeys FDI is coming from the EU. This fact should be taken into account when negotiating trade agreements such as TTIP.

Alfio ANZALONE remarked that despite the custom union being an ambitious project in 1995 when it was established, today reforms are needed. Good trade relations can be a way to enhance relations, even when political realities are less favourable. At this point, both the EU and Turkey jointly work on enhancing trade relations.

 

Business and Investments

Dirk VANTYGHEM confirmed that European businesses have a big interest in Turkey being a stable and safe environment for investments. The reshaping of the customs union would be welcome. This needs to go hand in hand with an increase in transparency on how the Turkish market operates. There is an information gap from both sides that is calling for a better business dialogue.

Serdar YESILYURT highlighted the difficult internal situation for Turkish companies, regarding three distinct issues: firstly, structural problems related to an unsustainable construction boom. Secondly, foreign policy developments are leading to problems in, or losses of, key markets such as Egypt. Thirdly, political involvement and influences are threatening institutional independence and business itself.
Turkish businesspeople would like the EU to take a more active role in pressuring the Turkish government to return to the path of an open and liberal democracy.

 

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