Customs Union Modernisation
Despite the Customs Union’s contributions to EU-Turkey economic integration, over the course of its 20 years in force it has become outdated. An unprecedented increase in global trade, the European Union's eastward enlargement, and the rising influence of emerging economies have also changed the landscape within which the CU functions. These factors have prompted an important re-examination of the framework governing EU-Turkey trade relations.
More specifically, services and public procurement are not included in the current framework of EU-Turkey bilateral trade relations, and agriculture is only covered on the basis of preferential concessions. Accordingly, the EU-Turkey trade relationship has been outpaced by the more ambitious trade policy of the enlarged EU and its subsequent negotiation and conclusion of a number of deeper and more comprehensive free trade agreements with key economic partners.
With major trade agreements between the EU and third countries on the horizon, modernization of the Customs Union represents an opportunity for Turkey to commit to economic reforms, improve its competitiveness, and enhance its integration potential with regard to forthcoming trade deals. Before the European Union proposes a new initiative, it assesses the need for EU action and the potential impacts of alternative policy options in the form of an impact assessment. This will then allow submission of negotiating directives by the Commission to the Council. In the context of Customs Union modernization, the Commission published a roadmap in August 2015. The roadmap was meant to provide an overview of potential options for enhancing bilateral trade relations and upgrading the Customs Union between the EU and Turkey. It highlighted the prospects for improved economic growth and integration among the parties.
In line with the procedures foreseen in the roadmap and following the conclusion of the Impact Assessment Process (which also included a public consultation), on 21 December 2016 the European Commission asked the Council for a mandate to launch talks with Turkey to modernise the Customs Union.