Ali Baydarol
As of today, the Automotive Package has only been proposed. Now, it will be subject to the Ordinary Legislative Procedure (OLP), in which the Council of the EU and the EP will co-legislate, meaning that the two bodies will together decide whether to accept the proposal at the first, second, or third reading, or reject it. If the EP or the Council of the EU (or both) request amendments to the proposal during the first reading, the legislation will be amended and then submitted for a second reading. Both the EP and the Council of the EU have the authority to request amendments to the proposal during the second reading, as well. If no agreement appears, a Conciliation Committee, consisting of the Council of the EU and EP representatives, is formed to reach an agreement at the third reading.
Given this backdrop, since the European Commission has recently proposed the Automotive Package, one can argue that Turkish lobbying efforts can now be the most effective. The lobbying activities of the leading business associations and automotive industrialists in Türkiye have been underway on a considerable scale. Business associations in Türkiye target the EU bureaucracy through Turkish ministries and European business associations—especially the European Association of Automotive Suppliers (CLEPA) and European Automobile Manufacturers’ Association (ACEA). One key pillar of this strategy is that European investors in Türkiye also participate in such lobbying activities, especially by directly contacting EU member state leaders. After all, the interests of European investors are equally at stake.
However, there is some bad news for Turkish lobbying efforts. Table 2 shows that 80% of the proposals in the OLP were accepted at the first reading from 2019–2024. The European Commission usually does not propose legislation with a low probability of adoption by the Council of the EU, as the EP does not like to be perceived as failing. This inevitably invites anticipatory compliance on the European Commission’s part, making consultation and input from third parties, especially civil society organisations, meaningful in the preparation of the proposal. Therefore, Türkiye might already be too late to step up lobbying efforts. Most notably, German Chancellor Friedrich Merz, whose country has the highest voting share in the Council of the EU, welcomed the package, describing it as “opening up the market to vehicles with combustion engines while compensating for emissions, which is pragmatic and in line with market conditions.”
One can further argue that if the proposed legislation transfers to the second or even third readings, an amendment that categorises automotive products made in Türkiye as “made in the EU” can be added. However, Table 2 shows that none of the proposals were accepted at the second or third reading over the 2019–2024 period.
Nevertheless, 13% of the proposals over the 2019–2024 period were accepted early in the second reading, indicating the formation of trilogues, an informal interinstitutional meeting among the European Commission, EP, and the Council of the EU after the EP’s first reading and before the Council adopts its position. If negotiations prove effective, the EP ratifies the Council’s position amendments. Hence, the automotive industry in Türkiye still stands a chance to lobby, though a minor one. The good news is the absence of a deadline on the EP’s and Council’s first reading, meaning that there is still time for lobbying.
MODERNIZING THE CUSTOMS UNION?
The process of modernizing the EU-Türkiye CU began in 2014, with the overarching objectives to expand the CU’s current coverage from industrial products toward services, public procurement, and food and agriculture; eliminate the transport quotas and visa barriers for economic actors; forestall the disadvantages for Türkiye stemming from the agreements that the EU has concluded with third countries; and align Türkiye’s state aid regime with the EU acquis. In the last 12 years, however, no significant progress has been made in upgrading the EU-Türkiye CU.
Given more than a decade of stagnation on this issue, Türkiye’s primary strategy should not be to bring the issue of treating automotive products manufactured in Türkiye as “Made in the EU” to the negotiation table on the EU-Türkiye CU in the short term. Instead, Türkiye should give priority to concluding an interim agreement with the EU that would allow products manufactured in Türkiye to be recognized as “Made in the EU.” In the past, the EU has concluded interim agreements with third countries to enhance its existing economic cooperation. As such, it concluded an interim agreement on trade and trade-related matters with Serbia in 2013, aimed primarily at abolishing customs duties and quantity restrictions in particular sectors, regulating anti-dumping measures, and ensuring Serbia’s alignment with the EU’s competition policy. The EU also developed an interim trade agreement with Chile in 2023 to upgrade the association agreement between the EU and Chile.
These instances suggest that the EU enters into such interim agreements with third countries when economic considerations support them. Given the deep integration of the Turkish and European automotive industries (e.g., the presence of European automotive producers in Turkey, Europe being the number one export destination of European investors in Türkiye, and the extensive sale of automotive components from Türkiye to Europe), both Türkiye and the EU should seek to conclude an interim agreement as an immediate solution. Only then can Türkiye consider pushing for modernizing the EU-Türkiye CU in a way that would recognize automotive products made in Türkiye as “Made in the EU” as a longer-term strategy.
Final Remarks
Although the EU took a step back from an outright ban on ICE vehicle production by 2035, the current automotive package still encourages the expansion of hybrid and electric vehicle production on EU soil. Hence, even if Türkiye is included in the Made in the EU package, it will still need to adopt eco-friendly car production technology. Currently, Türkiye’s automotive industry is strong in ICE vehicle production, but hybrid and electric vehicle production is limited. Automotive representatives in Türkiye suggest that Turkish automotive industrialists will inevitably adopt such eco-friendly technologies in line with demand in European markets, their current key export destination. For that to happen, however, the Turkish market must be included in the definition of Made in the EU.
Acknowledgements
I am profoundly thankful to Megan Gisclon, Managing Editor and Researcher at Istanbul Policy Center, and Gülcihan Çiğdem Okan, Mercator-Istanbul Policy Center Fellowship Program Associate, for their valuable feedback on earlier versions of this work.