Time to start modernizing the EU-Turkey Custom Union

Turkey’s relationship with the West was a marriage of reason. Despite recent tensions, the reasons for that union continue to exist. Turkey’s economic and social transformation is good for European security. This will be all the more so in the post-pandemic recovery process. The Green New Deal on both sides of the Atlantic is set to energize Turkey’s relations with the West in general, and EU-Turkey relations in particular. The European Council summit on June 24-25 could yield a critical decision to this end. Let me tell you why.

The Turkish accession process was set on a shared vision of the future between Turkey and the EU. Yet the process stalled after 2007, mostly due to French President Nicholas Sarkozy’s opposing it in the EU and domestic political developments poisoning the climate in Turkey. Later on, we saw a desperate search for a positive agenda in Turkey-EU relations, but to no avail.

The Migration Deal of 2016 was considered an effective positive agenda item, yet it fell short of being a shared vision for the future. Both sides fell back into a transactional approach without any strategic perspective.

Now with the green-digital transformation, we have the potential to establish the basis for a structured, and rather creative engagement process. There is no need for meaningless high-level summits. The EU’s plan already entails a well-structured agenda to discuss critical issues, much like the chapters of the accession process.

The Green Deal has the potential to focus on trade, industrial policy, education systems, labor market adjustments, as well as the geopolitical ramifications behind the green transformation. This makes it strategic. Synchronizing around the deal could once again make Turkey a strategic partner to the EU.

Turkey is already part of European value chains, hence any green-digital transformation in Europe requires a commensurate adjustment on Turkey’s part. Turkey cannot finance this transformation on its own, and that is where European FDI may play a critical role, especially in this period of restructuring value chains. Yet FDI into Turkey has dropped into negative figures in 2021 for the first time in our history. Why? Because of a steady deterioration in the rule of law and the operational problems of the justice system. Fixing that has to be Turkey’s homework in any twin adjustment scenario.

Beyond that, the green deal is going to have an adverse impact on all hydrocarbon producers in the region. As the International Energy Agency’s 2050 report advised, ending all oil and gas exploration now is the only way towards carbon neutrality in 2050, as envisaged by the Paris Climate Accord and the EU Green Deal. There is rapid political, economic and social transformation around Turkey, and this enhances, not diminishes, the country’s geopolitical role.

If our European partners start the Customs Union Modernization process next week, Turkey’s twin transformation could well start. A structured agenda for the green-digital adjustment of Turkey can easily pave the way for an effective strategic partnership between Turkey and the EU.

The ECFR 2021 survey of European public opinion notes that “Turkey is the only country that more Europeans see as an adversary than a necessary partner. Given that Turkey is a NATO member – unlike China, Russia, India, and Japan, all of which Europeans consider less threatening – this finding is quite worrying.” Given the western isolation of Turkey, the only role left to it was that of spoiler, a role it assumed with gusto. Note that the study also shows that the Europeans see the world as being made up of strategic partnerships, not alliances.

I believe that a shared vision for the future between the EU and Turkey based upon the European green-digital transformation could work wonders. It’s time to start the EU-Turkey Customs Union Modernization talks to set an agenda for a new strategic partnership.