The Opportunity Space of Overlapping Trade Regimes: Turkey, the Customs Union, and TTIP
| Date | 01 September 2016 |
| Author | Catherine Long |
| Published date | 01 September 2016 |
| DOI | http://doi.org/10.1111/1758-5899.12314 |
The Opportunity Space of Overlapping Trade
Regimes: Turkey, the Customs Union, and TTIP
Catherine Long
Kadir Has University
Abstract
The Republic of Turkey (RoT) is closely observing negotiations of the first three mega-regional preferential trade agreements. Of
greatest concern to the Republic is the US–EU Transatlantic Trade and Investment Partnership (TTIP), intended to establish the
standards for preferential regimes beyond ambitious next generation free trade areas (FTAs). The Republic’s primary concern is
TTIP’s potential impact on the Turkish economy given interaction with the RoT–EU Customs Union (CU). This interaction reflects
the problem of outdated trade agreements’overlap with the spaghetti bowls of next generation and now mega-regional agree-
ments. Although immediate Turkish TTIP inclusion is unlikely, TTIP triggered a critical juncture for the Republic given the agree-
ment’s potential interaction with the CU’s outdated features and hub-and-spoke structure. This juncture provides the Republic
with strategic leverage to pursue the CU’s review and possible revision. The RoT’s strategic sequencing of its CU review with
TTIP engagement may prove advantageous by altering its structural relationship with its hub and primary economic anchor of
the EU as well as facilitating its entry into ambitious mega-regional agreements and contributing to its EU accession process. It
also highlights the way in which states may strategically consolidate their particular cases of overlapping preferential trade
agreements (PTAs).
Policy Implications
•The Turkish CU-TTIP overlap creates a critical juncture that the RoT may use to revise the RoT-EU CU. Revision of this CU
will affect the problems highlighted by the CU-TTIP overlap.
•The Turkish CU-TTIP overlap highlights the problem of PTA-overlap resulting from preferential agreement proliferation.
Although some suggest new mega-regional agreements such as TTIP may serve as a means of coordinating and consoli-
dating this overlap, the CU-TTIP overlap suggests that other agreements –in this case a revised CU –may serve as the
essential consolidation mechanism.
•The RoT must sequence its engagement of PTAs associated with the CU-TTIP overlap, beginning with the CU as opposed
to the TTIP, in terms of its current desire for immediate, full TTIP membership. This sequencing will facilitate the Republic’s
realization of its long-term goals in a revised CU, EU accession and achievable mega-regional agreement membership.
•Mega-regional agreements, replacing next generation FTAs, will set international standards for trade and investment
agreements including agreements’non-tariff barrier (NTB) terms. The Turkish CU-TTIP overlap highlights the impact of
these standards on third-party countries such as Turkey.
CU-TTIP overlap as Turkish opportunity space
The Transatlantic Trade and Investment Partnership (TTIP)
mega-regional agreement, under negotiation between the
US and the EU, is slated to establish the most ambitious
preferential trade and investment regime to date. This
agreement is of concern to the Republic of Turkey (RoT)
given its potential interaction effects with the RoT-European
Commission (EC) Customs Union (CU).
1
Turkish TTIP com-
mentaries generally focus on two issues: (1) the weakened
competitiveness of Turkish products in the EU and (2) the
entry of American industrial and processed agricultural
goods into the Turkish market by means of the CU without
reciprocity for Turkish goods’entry into the American mar-
ket. For example, see: (Kirisci 2014). These commentaries,
which overwhelmingly offer the policy recommendation of
full and immediate Turkish TTIP membership, exhibit three
significant shortcomings. First, they have not tied the Turk-
ish case to dynamics of preferential regime overlap that will
arise from the three mega-regional experiments under nego-
tiation. Second, their policy recommendations do not
address the full ramifications of the CU-TTIP overlap given
their predominant focus on TTIP membership. Third, they
overlook the CU-TTIP overlap’s policy-oriented opportunity
space and how the Republic may use that space to strategi-
cally respond to those preferential trade agreements (PTAs)
affecting the Republic by means of the CU.
This article speaks to the commentaries’shortcomings by
framing the CU-TTIP overlap as a critical juncture in terms
of the Republic’s economic policy. If the RoT is able to
©2016 University of Durham and John Wiley & Sons, Ltd. Global Policy (2016) 7:3 doi: 10.1111/1758-5899.12314
Global Policy Volume 7 . Issue 3 . September 2016
360
Research Article
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