Recent events in the global economic market have seen Turkey establish what many have described as "a pivotal role in the New World Order". Perhaps such a description is over ambitious but one would be misguided to ignore Turkey's increasingly important strategic and economic global presence. A case in point was the European Union summit held in Helsinki on the 10th December 1999. During this last European Community summit of the millenium, Turkey was finally recognised as a formal candidate for full-membership.

Turkey's relationship with the European Union stems from the 1963 association agreement when a youthful European Economic Community eager to establish diplomatic relations with new allies, assured Turkey of future membership. Despite enthusiasm for commitment to the European Union amongst many of Turkey's political and industrial leaders, Turkey was overlooked at the Luxembourg summit in 1997, many commentators felt this was undeserved in view of the member state's positive response to the possibility of commencing accession talks with Turkey's neighbours Romania and Bulgaria. Irrespective of Turkey's somewhat inconsistent relationship with the E.C., candidacy status undisputeably provides much needed encouragement and guidance for Turkey and this will obviously improve confidence in the country both at home and abroad.

However it must be noted that despite Turkey not been afforded candidacy in the past, Turkey has continued to press ahead with legislative and economic reform in readiness for harmonisation and integration with its' European partners.

CUSTOMS UNION

Negotiation and successful discussion with the Turkish -European Community Partnership Council lead to the approval of Turkey's accession to the Customs Union on March 6th , 1995. The partnership signified the completion of the second "transitional stage" of the three stages prescribed by the Treaty of Rome for entry into the European Union.

The Customs Union came into force on January 1st 1996 and is not confined merely to the free movement of goods. Under its auspices the Union set out a gradual five year programme, the objective of which is to ensure Turkey's adaptation to the European Union's Common Commercial, Agricultural and Competition Policies. These steps are not only necessary so as to facilitate the proper functioning of the Customs Union through the free movement of goods but are also essential to bring Turkey closer towards European integration.

SCOPE OF THE UNION

Primarily the Union upholds the principle of free movement of goods. Industrial goods and processed agricultural products are thus able to circulate freely and imports and exports between the two states are no longer subjected to customs duties, quantitative restrictions and measures of equivalent effect. However as mentioned above the Union also sets out the simplification of customs formalities and the harmonisation of trade and agricultural policy. In preparation Turkey has therefore enacted the following legislation as part of its' harmonisation programme :

1) The Elimination of Technical Barriers
In order to eliminate technical barriers new legislation and co-operation with Brussels has brought Turkey closer to Europe in the areas of standardisation, measurement, calibration, testing, quality and accreditation.

2) Intellectual, Industrial, and Commercial Property Law
Upon the same date of the coming into force of the Customs Union, the European Union lifted limitations over textiles imported to member states as a consequence of which Turkey were obliged to bring in legislation in compliance with European Law in the area of Intellectual, Industrial and Commercial Property Law. In addition to and as a result of the enactment of domestic legislation, Turkey is a signatory state to for example the Paris, Madrid and Strasbourg Conventions concerning intellectual property law.

3) Competition Law
Turkey has enacted Competition Law based on the European model thus the European concepts of; for example abuse of a dominant position and negative clearance are fully embodied within Turkish Law. Government subsidies that in any way distort or threaten competition are now banned. State monopolies of a commercial nature are also to be gradually dismantled as an anti-discriminatory measure against the production and marketing of goods between member states and Turkish nationals. The Turkish Competition Board have recently rendered its' first decision in respect to vertical restraints although a transcript of the Board is awaiting publication.

ADDITIONAL KEY FEATURES OF THE UNION

• Application of the European Common Customs Tariff for products imported from third countries and the gradual introduction of the European external trade regime.
• For those products classed as "sensitive" Turkey will maintain protective rates over the Common Customs Tariff for imports originating from third countries for the next five years.
• Abolition by the European Union of the Voluntary Restraint Agreements in trade in textiles.
• Adoptation of the European Union's quota and surveillance measures applied over the textile and clothing industry in 45 countries.
• The formation of the European Union/Turkish Customs Union Joint Committee whose task it is to ensure that Turkey is properly informed and consulted in aspects concerning European Customs Union policy.
• Although beyond the scope of the Customs Union, resolutions have been passed ensuring the close co-operation between Turkey and the European Union in matters of for example consumer protection, energy and transport.

The full impact of the Customs Union in volume of trade terms is difficult to predict in view of the recent global recession. Turkish officials estimate that up to the year end of 1997, the Customs Union cost Turkey five billion dollars in lost revenue, whilst imports increased by more than 40 per cent, exports to the European Union increased by a mere 7 per cent. Economic statistics aside, it is certain that the Customs Union has increased competition between Turkish companies and encouraged the further development of technology and finance within the market. Perhaps in terms of generating trade, Europe needs Turkey as commented below;

„I believe that the European Union would face more harm than Turkey because we have the capability of reaching those dynamic markets in the Far East and Turkic states. Europe has now reached saturation level both in consumption and production.“

A Prominent Turkish Industrialist