Known by its acronym TTIP, Transatlantic Trade and Investment
Partnership has the capacity to serve as a game changer in global
economic balances. At its core TTIP is a free trade agreement
between the United States and the European Union with the
underlying objective to increase bilateral trade among two economic
blocks by the removal of tariff and non tariff based obstacles
before the Transatlantic trade. As the pundits are already in
line to praise the benefits of such a free trade agreement which
will bring increased trade volume, more jobs and common standards
for the signatories, the agreement seems to create negative
externalities for the third parties. The critical issue to be
reckoned with regarding the TTIP is the intention of the policy
makers to frame the agreement not only as a traditional free trade
agreement that usually deals with the border arrangements and
custom duties but also to design it as a beyond the border
arrangement that will seek to penetrate in to the areas where
economic integration and legal harmonization have not yet taken
Such comprehensive quality of the issue makes it one of the
closely followed issues around the world. One of the countries that
has been keeping a keen eye on the developments regarding the TTIP
is Turkey. European Union serves as the major trading partner for
Turkey and the United States increasingly turning into a
significant economic partner as well. European Union and the United
States when combined account for more than 40% of Turkish exports,
as well as 80% of the FDI that the country attracts. That's why
Turkish authorities has recently started to air their concerns over
the possible deal on the subject.
Possible Impacts on Turkey
A common external tariff combined with the removal of internal
tariffs might bring some difficulties for countries like Turkey. A
possible effect might be the penetration of American goods to the
Turkish market unhindered through the European Union given the fact
that Turkey has brokered a Customs Union agreement with the
European Union back in mid 1990s which is still in effect . In such
a case the rule of reciprocity will be revoked in the sense that
Turkish goods will continue to be subjected to the tariffs in the
United States whereas American goods will have the chance to freely
circulate in the market. This might not only create a trade
imbalance between the United States and Turkey but also might
hamper the capacity of the Turkish products to compete in the
European markets against the American products. This is undoubtedly
a serious blow for the countries like Turkey in terms of their
foreign trade balances.
Moreover a comprehensive free trade agreement between the United
States and European Union is going to require a monumental effort
for the harmonization of the bilateral legal structures. This means
new and more stringent regulations to be imposed on several
different business sectors. The fall out of such a legal process
for the third parties like Turkey is the need for a painstaking
process of harmonization of the local laws, regulations and
technical standards with the ones that will be imposed by TTIP.
This might mean extra costs for the Turkish business in a global
environment marked by fierce competition based on cost effective
products and solutions.
If the TTIP will be successfully brokered between these two
economic power blocks, it will definitely serve as a game changer
in world economic balances. These two blocks together produce 46%
of world GDP and one third of world trade by themselves. The
comprehensive changes that such important economic actors will be
exposed will inevitably have consequences for the third parties.
Turkey as a country in a custom union with the European Union might
feel the negative effects of TTIP in the form of market loss in
Europe, loss of reciprocity in trade relations with the United
States and the penetration of American goods with no hindrance to
its market without the Turkish penetration to the American one.
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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