Can Baydarol
The concepts of ‘manufactured in the EU’ and ‘manufactured in cooperation with the EU’ have recently been the subject of much debate in our country, particularly in the context of a nightmare scenario and efforts to find a way out of it. Should the concept of ‘manufactured in the EU’ be accepted unconditionally, there were grave concerns as to whether products manufactured in Turkey—particularly those from the automotive sector and its ancillary industries—would be able to enter the European market. Given that Turkey’s total exports in this sector alone amounted to 41 billion dollars last year, and that 70 per cent of these exports were destined for EU countries, there was a legitimate fear that the Turkish economy would suffer a very serious new blow.
Naturally, the issue should not have been limited solely to products from the automotive sector and its supply chain. A large number of European investors operating in Turkey are active in various sectors, and almost half of total exports to the EU were accounted for by these businesses. An unfavourable decision could have led to many foreign investors ceasing their operations in Turkey.
Fortunately, the feared outcome did not materialise!
Stéphane Séjourné, the European Commissioner responsible for the Internal Market and Services, outlined the EU’s programme in this context; whilst he preferred the phrase “Made in the EU!” as a catchphrase, the substance of his remarks pointed to a much broader EU production landscape. In this context, the EU’s statement that production carried out in countries with a Customs Union or Free Trade Agreement with the EU would be considered of EU origin has, for the time being, largely allayed the concerns expressed. Naturally, potential developments in the future, subject to the principle of reciprocity, are also prompting us to make a note of this for now.
Returning to Sejourne’s remarks, the importance of EU origin will come to the fore, particularly regarding participation in public tenders. In this context, EU-origin production will lead to preferential treatment in tenders within EU countries. We will need to examine this matter, which is of particular relevance to our country, more closely in the coming days.
Yes, as we are part of the customs union, goods produced in Turkey will be regarded as having been produced in the EU. So, based on this recognition, will all manufacturers producing in Turkey be able to enjoy priority when participating in EU tenders?
This question lies at the very heart of the concept of reciprocity highlighted by Sejourne. If Turkey grants EU-based producers the freedom to participate in its own public tenders, then producers manufacturing in Turkey (provided they are recognised as EU-based) will also be able to participate in the EU’s public tenders.
Is it easy for Turkey to implement this reciprocity, which sounds reasonable? Since 31 January 1995, when the final phase of the Customs Union began, the EU side has consistently demanded at every regular meeting of the Customs Union Joint Committee (GBOK) that EU firms be allowed direct participation in Turkish public tenders, a demand which Turkey has rejected. Public procurement, which is estimated to account for eight per cent of the Turkish economy, is not something any political authority can simply abandon.
This issue, which is inevitably set to form the central focus of the negotiations on updating the Customs Union—something we have long sought—will be one of the most important items on the agenda in the coming period.