Turkey should insist on updating EU customs deal, says TÜSİAD chief

ISTANBUL – Anadolu Agency

Updating the Customs Union agreement with the European Union is a vital point for Turkey, Turkish Industry and Business People’s Association (TÜSİAD) chair Erol Bilecik has said.

“Our trade is also important for Europe, and it is one of the important factors that will help us create a prosperous society,” Birecik told state-run Anadolu Agency on Aug. 5.

“We need to sit at the table, without compromising to be used, but increasing diplomacy further and assuming that there is no defeat in reconciliation. Hopefully in the coming days there will be a structure where we can get positive results. We must not stop the pressure.”

The Customs Union between Turkey and the EU came into force on Dec. 31, 1995. It covers all industrial goods but does not address agriculture (apart from processed agricultural products), services or public procurement.

The European Commission stated on Dec. 21, 2016 that it had asked the European Council for a mandate to launch talks with Turkey to modernize the existing EU-Turkey Customs Union.

Explaining that the upgrade of Turkey-EU trade relations forms an essential part of both side’s efforts to deepen relations in key areas of common interest, the commission reiterated its resolution to continue delivering on commitments it has made as part of the deal with Ankara.

However, no progress has been made in talks regarding the modernization of the agreement.

Commenting on incentives, seen by the government as a way of boosting the production, Bilecik said TÜSİAD has never underlined one sector in particular and approaches the entire economy as a whole.

“Incentives were useful in certain periods, it is impossible to ignore this fact,” he said.

“But when you look at the entire incentives system in Turkey today, no company can alone map it out,” Bilecik said, noting that the first thing a company does when it wants to benefit from the incentives is to hire a consultancy firm.

“Think about it, there are hundreds, even thousands of incentives put forward by the ministries and other institutions. This needs to be simplified. Of course, I’m not calling for a total abolishment of the system, but an impact analysis should be made, and if an incentive is not beneficial, it should be stopped or updated.”

Bilecik said the right thing to do is to have incentives specific to the projects that will bring export value, contribute to growth and inflation targets, and produce value added production.