.
As the U.S. and EU advance towards adoption of the Transatlantic Trade and Investment Partnership (TTIP), the West’s relationship with NATO ally Turkey has seemingly fallen by the wayside. The TTIP, a proposed free trade agreement that would integrate the world’s largest economies, risks excluding Turkey unless its current European Customs Union Agreement with the EU is modified accordingly. Turkey’s exclusion from the TTIP would prevent it from imposing a customs duty on U.S. imports, while allowing the U.S. to continue imposing such duties on Turkish imports, further imbalancing the bilateral economic relationship. An agreement without Turkey’s participation would negatively impact the U.S.-Turkey overall relationship at a time when common challenges between the two countries demand their close cooperation. While the TTIP will bolster U.S.-EU trade ties, with estimated gains amounting to USD 134 billion a year for the EU and USD 107 billion a year for the U.S., Turkey’s absence from the agreement would be a devastating economic and diplomatic loss for the U.S. On May 2nd, 2015, Turkish Prime Minister Ahmet Davutoglu announced to the General Assembly of the Union of Chambers and Bourses of Turkey that the country was upgrading its Customs Union Agreement with the EU to ensure its participation in the TTIP. The announcement comes at a crucial time. Turkey is suffering from a series of economic woes including tepid growth, a depreciating lira, and growing unemployment. Official data published on April 15, 2015 showed that the unemployment rate jumped to 11.3 percent in January – the highest since April 2010. Since the start of 2015, the Turkish lira has depreciated against the U.S. dollar by nearly 20 percent. However Turkey’s inclusion in the TTIP, which is estimated to increase Turkey’s GDP by USD 30 billion, offers a glimmer of hope for the future amidst a wave of bad press. Investors are eyeing Turkey’s trade deficit with caution, though experts believe the country’s inclusion in the TTIP will encourage Turkish leaders to implement difficult market reforms required to reduce the debt. The updated Customs Union Agreement could be a major victory for Turkey, and may help the economy power through several of its current economic woes. In addition to Turkey’s standalone economic benefits from the TTIP, the U.S.-Turkey relationship looks to improve. Turkey’s inclusion would not only expand trade ties between the U.S. and Turkey, but could possibly repair Turkey’s complicated bond with the West. U.S.-Turkey trade relations have traditionally leaned heavily on the defense industry, however the TTIP will foster a broader, more dynamic economic relationship capable of reinforcing the diplomatic one. The U.S. offers a fertile ground for affordable Turkish textiles and appliances, as well as exports of Turkey’s growing services sector such as tourism, healthcare, and education. Turkey’s domestic industries will benefit from greater synergies with U.S. private-sector expertise. U.S. companies will benefit from fuller engagement with the world’s 17th largest economy. Turkey’s young, savvy, and increasingly consumer-driven population provides enticing growth opportunities for U.S. corporations looking to gain a foothold in an emerging market rife with economic potential. The TTIP, with its message of economic and political freedom, could also be the prelude to Turkey’s recalibrated negotiations with the EU, and a subsequent mending of the U.S.-Turkey diplomatic relationship. Turkey’s inclusion in the TTIP should reinforce its motivations to join the Union, especially now that the Turkish population is beginning to again favor closer ties with Europe. An increasingly Western-oriented Turkey will foster closer U.S.-Turkey business ties, ultimately reinforcing government ties. If the prospects of Turkey’s participation in TTIP aren’t alluring enough for EU and U.S. leaders, let them consider the alternatives. With no end in sight to the turmoil in the Middle East, Turkey has become an even more crucial geostrategic ally. The U.S. now relies heavily on Turkey for support in its campaign against ISIS, however Turkey has clearly demonstrated that it has the capacity and the will to complicate those efforts in pursuit of its own alternative foreign policy goals. Furthermore, Turkey continues to dance around the prospects of contracting with China for a multi-billion dollar missile defense system to the chagrin of its NATO allies. And the development of a gas pipeline linking Russia with Turkey threatens to pull Turkey towards a network of countries unconcerned with the proliferation of democratic ideals and increasingly at odds with the West. The U.S. cannot risk losing Turkey. Turkey’s geostrategic significance, economic value, and potential to evolve into a global political and economic leader elucidate its role as a crucial ally. Supporting Turkey’s participation in the TTIP would reaffirm the U.S.’s appreciation for what the country offers, and motivate business and political leaders to formalize and strengthen their relationships. Turkey’s participation could catalyze a renewed synergy with the EU, compelling Turkey to maintain its impressive political and economic advances, while recommitting and strengthening its ties with the U.S. Conversely, Turkey’s exclusion from TTIP could see the West’s influence wane with Russia and China eager to fill the vacuum. Turkey’s relationship with the EU and the U.S. was recently complicated by disagreements over national security and a perceived lack of recognition for the immense work Turkey has done to realize its inclusion in the TTIP. In spite of its neighbors, Turkey remains a relatively stable country with enormous economic potential, and with Turkey’s participation in the TTIP, the future is open for a more dynamic and deepened economic and political relationship with the West. Eli K. Lovely is Communications and Marketing Director at the American-Turkish Council.

The views presented in this article are the author’s own and do not necessarily represent the views of any other organization.

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The TTIP: What’s at Stake for U.S.-Turkey Relations?

United States of America and Turkey. Flags
June 19, 2015

As the U.S. and EU advance towards adoption of the Transatlantic Trade and Investment Partnership (TTIP), the West’s relationship with NATO ally Turkey has seemingly fallen by the wayside. The TTIP, a proposed free trade agreement that would integrate the world’s largest economies, risks excluding Turkey unless its current European Customs Union Agreement with the EU is modified accordingly. Turkey’s exclusion from the TTIP would prevent it from imposing a customs duty on U.S. imports, while allowing the U.S. to continue imposing such duties on Turkish imports, further imbalancing the bilateral economic relationship. An agreement without Turkey’s participation would negatively impact the U.S.-Turkey overall relationship at a time when common challenges between the two countries demand their close cooperation. While the TTIP will bolster U.S.-EU trade ties, with estimated gains amounting to USD 134 billion a year for the EU and USD 107 billion a year for the U.S., Turkey’s absence from the agreement would be a devastating economic and diplomatic loss for the U.S. On May 2nd, 2015, Turkish Prime Minister Ahmet Davutoglu announced to the General Assembly of the Union of Chambers and Bourses of Turkey that the country was upgrading its Customs Union Agreement with the EU to ensure its participation in the TTIP. The announcement comes at a crucial time. Turkey is suffering from a series of economic woes including tepid growth, a depreciating lira, and growing unemployment. Official data published on April 15, 2015 showed that the unemployment rate jumped to 11.3 percent in January – the highest since April 2010. Since the start of 2015, the Turkish lira has depreciated against the U.S. dollar by nearly 20 percent. However Turkey’s inclusion in the TTIP, which is estimated to increase Turkey’s GDP by USD 30 billion, offers a glimmer of hope for the future amidst a wave of bad press. Investors are eyeing Turkey’s trade deficit with caution, though experts believe the country’s inclusion in the TTIP will encourage Turkish leaders to implement difficult market reforms required to reduce the debt. The updated Customs Union Agreement could be a major victory for Turkey, and may help the economy power through several of its current economic woes. In addition to Turkey’s standalone economic benefits from the TTIP, the U.S.-Turkey relationship looks to improve. Turkey’s inclusion would not only expand trade ties between the U.S. and Turkey, but could possibly repair Turkey’s complicated bond with the West. U.S.-Turkey trade relations have traditionally leaned heavily on the defense industry, however the TTIP will foster a broader, more dynamic economic relationship capable of reinforcing the diplomatic one. The U.S. offers a fertile ground for affordable Turkish textiles and appliances, as well as exports of Turkey’s growing services sector such as tourism, healthcare, and education. Turkey’s domestic industries will benefit from greater synergies with U.S. private-sector expertise. U.S. companies will benefit from fuller engagement with the world’s 17th largest economy. Turkey’s young, savvy, and increasingly consumer-driven population provides enticing growth opportunities for U.S. corporations looking to gain a foothold in an emerging market rife with economic potential. The TTIP, with its message of economic and political freedom, could also be the prelude to Turkey’s recalibrated negotiations with the EU, and a subsequent mending of the U.S.-Turkey diplomatic relationship. Turkey’s inclusion in the TTIP should reinforce its motivations to join the Union, especially now that the Turkish population is beginning to again favor closer ties with Europe. An increasingly Western-oriented Turkey will foster closer U.S.-Turkey business ties, ultimately reinforcing government ties. If the prospects of Turkey’s participation in TTIP aren’t alluring enough for EU and U.S. leaders, let them consider the alternatives. With no end in sight to the turmoil in the Middle East, Turkey has become an even more crucial geostrategic ally. The U.S. now relies heavily on Turkey for support in its campaign against ISIS, however Turkey has clearly demonstrated that it has the capacity and the will to complicate those efforts in pursuit of its own alternative foreign policy goals. Furthermore, Turkey continues to dance around the prospects of contracting with China for a multi-billion dollar missile defense system to the chagrin of its NATO allies. And the development of a gas pipeline linking Russia with Turkey threatens to pull Turkey towards a network of countries unconcerned with the proliferation of democratic ideals and increasingly at odds with the West. The U.S. cannot risk losing Turkey. Turkey’s geostrategic significance, economic value, and potential to evolve into a global political and economic leader elucidate its role as a crucial ally. Supporting Turkey’s participation in the TTIP would reaffirm the U.S.’s appreciation for what the country offers, and motivate business and political leaders to formalize and strengthen their relationships. Turkey’s participation could catalyze a renewed synergy with the EU, compelling Turkey to maintain its impressive political and economic advances, while recommitting and strengthening its ties with the U.S. Conversely, Turkey’s exclusion from TTIP could see the West’s influence wane with Russia and China eager to fill the vacuum. Turkey’s relationship with the EU and the U.S. was recently complicated by disagreements over national security and a perceived lack of recognition for the immense work Turkey has done to realize its inclusion in the TTIP. In spite of its neighbors, Turkey remains a relatively stable country with enormous economic potential, and with Turkey’s participation in the TTIP, the future is open for a more dynamic and deepened economic and political relationship with the West. Eli K. Lovely is Communications and Marketing Director at the American-Turkish Council.

The views presented in this article are the author’s own and do not necessarily represent the views of any other organization.