TTIP: An economic NATO in formation

ASLI AY

Trade liberalization continues to be the lowest-hanging fruit that can boost global economic expansion. The United States, having committed to finalizing two major trade agreements in parallel – the Transatlantic Trade and Investment Partnership (TTIP) with the EU and the Trans Pacific Partnership (TPP) with 12 Pacific nations – sits squarely in the center of this opportunity.

While the TPP is largely driven by America’s desire to expand its ties to fast-growing Asia and give assurances to Pacific nations against real and perceived security threats from China, with the TTIP, the U.S. aspires to create a deeply integrated transatlantic market composed of the 28 EU member countries and the U.S.

The TTIP is the economic NATO. The TTIP is the new frontier in trade liberalization, an effort to write the new global trade constitution, a blueprint for deep integration trade agreements for the 21st century. The question is: How can Turkey be included in the TTIP?

When the U.S. and the EU launched the TTIP negotiations, Turkey requested a seat at the table, as per its rights as a country with a Customs Union with the EU. This request was duly rejected by both parties. The argument was that Turkey’s inclusion would “complicate the process,” which sounded like a technical excuse, but was actually a politically expedient one. Although Turkey has been vocal in its desire to develop a deeper trade relationship with the U.S., regrettably it has laid virtually none of the groundwork required to shape public opinion in the U.S. Thus, the decline of Turkey’s request was not surprising.

For now, Turkey is stuck with a limited and toothless Bilateral Investment Treaty with the U.S., and while the 20-year-old Customs Union continues to be the foundation of the Turkey-EU economic relationship, it was never designed to bring the type of enhanced cohesion and deeper economic integration envisioned within the TTIP. Given the high stakes, Turkey cannot afford to give up. But what realistic option does Turkey have?

In a relatively recent and important development, the U.S. has advocated for Japan’s eventual inclusion in the TPP through a provision called “docking,” a clause that would permit Japan and other countries to join the TPP at a later date without suffering any disadvantages.

For docking to be an option for Turkey, the TTIP would need to include a generic docking clause in the agreement. Turkey should initiate a major lobbying effort with the U.S. administration, key leaders in Congress, and EU decision-makers to write the necessary docking provisions into the TTIP. This would grant all countries that have longstanding trade agreements with the U.S. or the EU the right to apply to and join the TTIP.

Turkey should build a coalition of like-minded countries such as Australia, Mexico, Norway, South Korea, Canada and Switzerland, among others. This must be done before the agreement goes to the U.S. Congress for a vote and to the EU Parliament for ratification.

The central tenet of this campaign should be the “tipping point” argument. As the TTIP strives to set the global standards for deep integration trade agreements, it would be beneficial if all American and European allies with sizable economies could be signatories and participants.

If there is any silver lining to this, it is the fact that Turkey still has about two years to pursue the opportunity to be included in the TTIP. Negotiations can only be completed after President Obama leaves office on Jan. 20, 2017. In all probability, the next U.S. president will sign the TTIP into law.

Turkey has powerful arguments about why it should be included in the TTIP. The key message should be that the inclusion of Turkey in the TTIP would contribute visibly to the TTIP’s economic, strategic and political goals. Turkey’s alignment with the West has been a critical geostrategic issue for the U.S. and the EU, and a top political issue for Turkey for the last three quarters of a century. If successful, Turkey’s inclusion in the TTIP would be a crowning economic victory that would positively redefine this trilateral relationship.

* Aslı Ay is the Managing Partner of US Policy Metrics in New York. She is also a Young Society Leader (YSL) of the American Turkish Society (ATS). This is an abridged version of the original article in Turkish Policy Quarterly’s Summer 2014 issue. For more information, visit turkishpolicy.com