Trading as a Way to Connect Communities – Gradual Integration into EU, Abstract of the speech delivered by Mr. Yakış in the Seminar on “Movement of Goods in the Area of the EU, EFTA, Turkey and CEFTA; Facilitation of Coopeation Patential”, Istanbul, 17-18 December 2008

TRADING AS A WAY TO CONNECT COMMUNITIES: GRADUAL INTEGRATION INTO EU

Seminar on the  “Movement of Goods in the Area of the EU, EFTA, Turkey and CEFTA: Facilitation of Cooperation Potential”, Istanbul, 17-18 December 2008

Abstract

Trade and economic interaction between countries contribute to a large extent to the improvement of the political relations. In contrast, barriers to free trade and protectionist policies prevent the utilization of these potentials.

Free trade agreements, regional trade agreements and other arrangements to facilitate trade between contracting countries aim at lowering or entirely eliminating trade barriers introduced by States to protect their economiesand thus improving trade, increasing production, developing economic capacities of the countries and contributing to their growth. On the other hand, these arrangements often go hand in hand with improvement of political relations.

The European economic area comprising the European Union, the European Free Trade Area, the Central European Free Trade Agreement (CEFTA), as well as the other related arrangements, is a perfect example of a comprehensive regional integration. As regards the volume of trade between the partners, trade within these frameworks constitutes a substantial part of their overall foreign trade. Moreover this economic area constitutes also a good model for economic integration. This integration goes beyond free trade and economic relations and it is now becoming a supranational political architecture.

The values on which the European Union is founded are not merely based on free trade. However, facilitation of free trade and establishment of the required economic and political structures have played a major role in the process from the European Economic Community of the post war period to the European Union of today.

In this context, the Customs Union between Turkey and the EU has been playing a significant role in strengthening the economic integration and facilitating the accession process of Turkey, despite certain shortcomings stemming from its asymmetrical nature. CEFTA also may make a similar contribution to the participation of their members in the European integration.

Regional cooperation

First of all, I would like to express my appreciation for the decision of the organizers to choose this topic for our debate. As we all know, the world is undergoing a global economic crisis and all countries are more or less affected. Particularly, in those days, international cooperation and coordination of our efforts are important more than ever to control the negative effects of the crisis.

Cooperation at the regional level is an important part of the international economic cooperation. Besides, regional economic integration often facilitates participation of smaller economies in the global economy.

Free trade and transparency in international economic system

It is widely accepted that free trade and economic interaction between countries also strengthen political relations. Trade relations and subsequent economic interaction and integration also improve social and humanitarian contacts. Needless to say, political leaders cannot remain indifferent to this and improvement of political relations follows the trade.

For instance, in the region of the Black Sea, potential of the region and the strong interest of the business community have been the main factors that encouraged the leaders to establish the Black Sea Cooperation, which has recently become focus of attention of the European Union as well.

In contrast, barriers to free trade and protectionist policies negatively affect the political sphere and often bar the way to closer friendly relations. The existence of transparent and foreseeable economic relations contributes to a large extent to the international stability.

Free trade agreements

Free trade agreements, regional trade agreements and other arrangements to facilitate trade between contracting countries can be considered as mechanisms to achieve free circulation of goods and services.

On one hand, these arrangements aim at improving trade, increasing production, developing economic capacities of the countries and contributing to their growth. On the other hand, these arrangements often go hand in hand with the improvement of the political relations between the countries in question.

Economic integration and interdependence between countries in most cases create a stable economic environment that facilitates trade, encourages investments and achieves growth.

The EU, the EFTA and the CEFTA

The economic area comprising the European Union, the European Free Trade Association, the Central European Free Trade Agreement, as well as the other related arrangements, is a very good example of regional integration.

Trade within these frameworks constitutes a substantial part of their overall foreign trade. Moreover this area also shows a good model for economic integration. This integration goes beyond free trade and economic relations and it is now becoming a supranational political architecture.

The values on which the European Union is founded are not merely based on free trade. However, the facilitation of free trade and establishment of the required economic and political structures have played a major role in the process from the European Economic Community of the post war period to the European Union of today. Liberal values such as economic freedoms, non-discrimination and transparency of regulations have also contributed, in the political sphere, to the establishment of democratic values, basic freedoms and rule of law

The significance of the Customs Union between Turkey and the EU

In this context, the Customs Union between Turkey and the EU has been playing a significant role in strengthening the economic integration and facilitating the accession process of Turkey.

As a result of the Customs Union, Turkey and the EU have become one of each other’s main trading partners. This constitutes one of the fundamentals of the Turkey’s accession process. Furthermore, this Union has contributed to the competitiveness of the Turkish industry in a great deal. The success of the Customs Union and harmonization in related fields also shows the determination of Turkey to comply with the EU standards.

In flagrant violation of the provisions of the Customs’ Union Agreement between Turkey and the EU, Turkey is neither consulted nor allowed to participate in the negotiations of the Free Trade Area Agreements that the EU signs with the third countries. Nor the third countries are forced to conclude with Turkey Free Trade Area Agreements in similar terms as the one that the EU signs with these countries. As a result of this, the third countries delay or drag their legs for starting the negotiations of similar agreements with Turkey. Their industrial export commodities enter Turkey without paying customs duties while Turkish industrial commodities cannot enter the territories of these third countries because they did not sign Free Trade Area Agreement with Turkey. The EU continues to turn a deaf ear to Turkey’s insistent demands to stop this unfair practice.

CEFTA

The CEFTA may contribute to the participation of their members (Albania, Bosnia-Herzegovina, Croatia, Kosovo, Macedonia, Moldavia, Montenegro, Serbia) in the European integration.

Firstly this arrangement may increase the trade among the members and the EU. If this possibility for the increase in trade is also supported by appropriate economic and investment policies, the region can achieve the desired economic growth after decades of internal problems and conflicts.

Secondly, political stability is surely to follow, if the envisaged mechanism of free trade is implemented.

Lastly but most importantly, this regional mechanisms can also serve as a preparation process for better integration of the members with the EU.

Potential of the Balkans

Balkans has always been a trade route throughout the history, between the West and the East, as well as the North and the South. The countries of the region also possess a sufficient infrastructure and production capacity. This capacity can be improved by increasing trade and foreign investments. Therefore there is a huge potential in the region.

Complementarity of different regional arrangements

Before concluding my remarks, I would like to emphasize one point. Different regional arrangements should not be considered as competing trading blocks, they should rather complement each other. Especially in the case of Europe, all these regional arrangements should be considered as regional mechanisms to facilitate the participation in greater European integration.

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