In 1963, Turkey signed an Association Agreement with the EEC, which became known as the Ankara Agreement. The Agreement envisioned three phases for Turkey's gradual accession to the EU Common Market through the establishment of a Custom Union (CU):

1. Preparatory (1964 – 1970)
2. Transition (1973 – 1995)
3. Completion (1996 to full economic integration)

An Additional Protocol entered into force in 1973, which aimed to remove customs duties between the two sides. While the EU completely removed customs duties on industrial goods of Turkish origin from the very beginning of the transition period, Turkey's removal of customs duties on EU industrial goods was set to be more gradual. A 22-year transition period was foreseen for Turkey to complete the implementation of the CU.

The Customs Union Decision was adopted in 1995, under which Turkey eliminated customs duties for EU industrial goods. The Decision took effect on 1 January 1996.

Customs Union - Benefits

The CU between Turkey and the EU was the EU's first substantial functioning CU with a non-member state. Under the CU, Turkey has adopted the European Union's common external tariff (CET) for most industrial products and industrial components of agricultural products. The parties have also eliminated all customs duties, quantitative restrictions, and charges on their bilateral trade. Since its implementation, the CU has supported the growth of EU-Turkey trade and investment, promoted Turkish productivity gains, and furthered Turkey's alignment with the acquis.

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