TTIP and EU-Turkish Economic Relations: Deepening the Customs Union

Executive Summary

This policy brief examines the future of Turkish-European Union economic relations in the context of the launch of negotiations between the United States and the European Union on the Transatlantic Trade and Investment Partnership (TTIP).

Although the Turkish government has expressed its desire to participate in the TTIP negotiation process, the study argues that Turkey’s most viable policy option in the short term is to pursue a separate Free Trade Agreement with the United States. At the same time, both Turkey and the European Union have strong incentives to deepen and expand the existing Customs Union rather than abandon it, given the significant economic and institutional investments made in this framework over nearly two decades.

While there are economic reasons for the United States and the European Union to respond more positively to Turkey’s demands, political factors remain major obstacles. The increasingly authoritarian tendencies of the AKP government and ongoing political tensions between Turkey and its close allies have so far limited progress toward mutually beneficial economic agreements.