Toward a 'Privileged Partnership": The EU, Turkey and the Upgrade of the Customs Union.

• Author: Altay, Serdar
• Position: ARTICLE - Essay

Introduction

The origins of today's EU-Turkey partnership go back to the early years of the 1960s. An Association Agreement dated 1963 paved the way for forming a bilateral Customs Union (CU) that has been in force since 1996. Turkey earned candidacy status for EU membership in 1999, and its accession negotiations began in 2005. Nevertheless, so far Ankara has made only limited progress toward membership owing to mounting political hurdles on both sides. The negotiations have been effectively stalled in recent years amid the biggest political crisis in bilateral relations. Rising populist nationalism in Western Europe, the Brexit decision, and increasingly unified resistance to Turkey's accession within the EU have made Turkey's full membership an impossible scenario.

Although proponents of Turkey's EU membership both in Europe and Turkey have long lost faith in a happy ending, neither Ankara nor Brussels is ready to terminate the accession process and work out a mutually non-destructive Plan B. In their October 2017 summit in Brussels, the EU leaders produced a decision, at the end of hours of heated debate, that limits structural aid for Turkey's accession owing to persisting concerns about the conditions of democracy and human rights in the country. (1) The European Commission's latest progress report on Turkey's accession contends that Ankara fails to meet not only political criteria for being in the EU but also increasingly falls short of maintaining its market economy. Even though a decision that would officially cut off the accession talks has so far been evaded, the policy debate will certainly intensify in European capitals toward constructing a viable exit strategy that would officially terminate the membership process but keep Turkey anchored to Europe. This time the proponents of the idea of a "Privileged Partnership" with Turkey will shape the policy debates in Europe, rather than those who back Turkey's membership bid. Upgrading the CU is central to the Privileged Partnership proposals.

The European Commission (EC) and the Turkish government have already launched a process that would expand and upgrade the two-decades-old CU. In May 2015, Turkish Economy Minister, Nihat Zeybekci, and European Commissioner for Trade, Anna Cecilia Malmstrom, reached a mutual understanding to modernize the trade pact and extend it to new domains. Originally, the plan was to address the imminent institutional defects of the current CU and to broaden its market access scope to farming, services, and public procurement. In December 2016, the EC announced its objectives and scenarios for the forthcoming talks, and called for a negotiation mandate from the member states. (2) The Commission proposed a broader package for CU 2.0 than the mutually agreed framework adopted in May 2015. Going beyond conventional trade pacts, the EC proposed delineating a "mega-regional" between Turkey and the EU with deep market access commitments, and a comprehensive rules and enforcement agenda. This development must please the advocates of Privileged Partnership in Europe; because the proposed pact would further open Turkish markets, it would not only strongly anchor Turkey with Europe, but also eradicate the EU's motives to accept Turkey as a full member.

Although the two parties are anticipated to start the update negotiations in 2018, there has been almost no debate in Turkey on how to repair ties and move forward with the nation's biggest economic partner and political ally. As a matter of fact, neither the idea of a Privileged Partnership nor a modernization of the CU have been a subject of debate for policymakers, economists, or international relations experts. This paper is a modest contribution to kick off the policy debate about alternatives to Turkey's EU membership by focusing on the upgrade of the CU. Specifically the paper will assess the EC's CU upgrade scenarios in light of the Privileged Partnership ideas raised in Europe. As a Turkish advocate of the idea of Privileged Partnership, I argue that the CU 2.0 project will indeed be a grandiose step toward such a partnership between the two parties. Aside from the joint security architecture, it is clear that CU 2.0 will become the sole institutional framework to engage Ankara with Europe and carry the partnership into the future. Nevertheless, this may not necessarily be a bright future for Turkey since the scenarios proposed by the Commission are likely to lead to a more imbalanced outcome in terms of costs and benefits than that of CU 1.0.

This paper will first outline the current state of Turkey's EU accession process and elaborate upon the Privileged Partnership alternative. It will then focus on CU 1.0, study its defects, and shed light on the process to upgrade its structure and scope. Before concluding, the paper will analyze the Commission's CU update scenarios against the idea of a Privileged Partnership elaborated in European policy circles.

Turkey's EU Membership: A Failed Project

The historic decision in the EU's 2004 Copenhagen summit which inaugurated the accession talks with Turkey was an outcome of the determination of Turkey's then Prime Minister Recep Tayyip Erdogan and the entrenched support and visionary leadership of Jacques Chirac, Tony Blair, and Gerhard Schroder. (3) Nevertheless, this decision did not mean an unconditional 'yes' to Turkey's EU membership. It rested on a conditional compromise built between pro-Turkey and anti-Turkey forces in Europe. The accession negotiations were set to become "open-ended," with no guarantee that they would result in full membership. (4) Such an awkward start reflected the strong resistance of some European leaders who admitted Turkey's strategic significance for Europe yet opposed it becoming a member of the Union. Instead of membership, the opponents suggested constructing a Privileged Partnership with Turkey. The leader of Germany's Christian Democrats (CDU/CSU), Angela Merkel, was an outspoken opponent of Turkey's accession before and after she was elected chancellor in 2005, in company with other high-profile European leaders such as Valery Giscard d'Estaing, former French President and President of the European Convention that produced the draft Constitutional Treaty, and Nicolas Sarkozy who led the Union for a Popular Movement and succeeded Jacques Chirac in the French presidency in 2007. (5) In contrast to the large backing for the idea in Europe, Privileged Partnership has never garnered support in Turkey. The Turkish government has not officially come to terms with any alternatives to full membership.

French resistance after Sarkozy came to office, German indifference under the leadership of Merkel, and the Cypriot veto stymied any swift progress in Turkey's membership talks. The accession process typically takes place over 33 of 35 chapters of the EU acquis and requires candidate countries to harmonize their domestic laws with European standards and policies. Especially in the early phases of the talks, Turkey undertook significant reforms in order to align its domestic laws with the EU acquis in several chapters. Yet Turkey's accession negotiations, which formally began in October 2005, have been filled with landmines. In 2006, the EU suspended the negotiations in eight chapters pertinent to the functioning of the CU This was because of Turkey's resistance to implementing an additional protocol to the Copenhagen Council decision, which would expand the CU to new members including Cyprus. The following year, France under Sarkozy's leadership blocked four chapters, which arguably belonged in the final phase of negotiations. (6) In the face of the changing balance of power in Europe that strengthened the anti-Turkey camp, Ankara lost its appetite for new reforms to align its domestic legislation with the EU.

As seen in Table 1, less than half of the acquis chapters (16 chapters) have so far been opened to negotiation, whereas only one chapter, Science and Research, has come to temporary closure. In 11 chapters, Turkey has highly aligned its domestic regulations with the acquis. These include areas regulated by the CU rules, such as competition policy and intellectual property rights (IPRs), which had to be harmonized earlier because of the CU rather than the accession process per se. On the other hand, Turkey is still in the early stages of harmonization in domains such as agriculture and rural development, food safety, fisheries, and the environment. This group of policy domains is marked by wide gaps between Turkish and EU standards, and Ankara needs to undertake costly reforms to catch up with Europe.

Although Turkey and the European Union pushed for reinvigorating the accession talks after Sarkozy lost the French presidency in 2017, these endeavors have not been utterly productive. Especially since 2013, the EU-Turkish partnership has seen the deepest political crisis in recent history together with a complete erosion of confidence in relations. European leaders and institutions have been critical of Turkey for breaching its obligations in human rights and for the rising authoritarianism in the country. The leaders of the ruling Justice and Development Party including President Erdogan have responded with harsh statements, accusing the EU of double standards against Turkey and suggesting that European criticisms are merely interference in Turkish domestic affairs. (7) The crisis has deepened since the failed coup attempt in July 2016, the ensuing state of emergency, which remains in effect at the time of writing, and the political campaign of the Turkish government to build up a presidential system that would grant sweeping new powers to the Turkish president. Nonetheless, Turkish and European leaders alike have avoided throwing the first stone that would officially break down the accession process. Clearly, Turkey's EU membership is a failed project with no chance of revitalization in...