The Customs Union as the Catalyst of Globalization, Summer 2002

Besides the political motive, the completion of the Customs Union stems from a contractual obligation and from a number of economic expectations that can be listed in terms of ex ante order of priority as an increase in foreign direct investments, an improvement in global competitiveness, the consolidation of the European market and the modernisation of the country’s economic legislation. Six years down the road, Turkey’s most important expectations remain seemingly unfulfilled whereas some degree of success can be attached to “less important” expectations. Yet the impact of this trade integration with Europe on Turkey’s economic legislation proved to be by far the most important element of the Customs Union deal. Furthermore this importance will not wane in the future but on the contrary increase on account of the incorporation of the services sector in the Customs Union. The Customs Union’s role and influence on the Turkish economy runs much deeper than what trade statistics may suggest. The Customs Union seems indeed to play a significant role in shaping globalisation’s impact on Turkey. On the one hand, by opening up the sectors of the economy to international competition, it increased the exposure of the country to the currents of globalisation but at the same by contributing to the establishment of a proper institutional setting, it improved the capacity of the country to deal with the ills of globalisation and to optimize the benefits of globalization.

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