DIGITALEUROPE Position for a new EU-Turkey Costums Union

INTRODUCTION

After a nearly 20-year old Customs Union, there is a historical momentum for the European Union and Turkey to strengthen their bilateral trade relations and to explore new areas of economic cooperation.

While the European Union launched its Digital Single Market (DSM) last year, Turkey should be a key partner to achieve the ambitions set up by the European Commission in the implementation of the DSM.

Indeed, Turkey’s digital economy is also coming of age. There is a growing dynamism in Turkish e-commerce and mobile banking. According to statistics from the Turkish Interbank Card Center, Turkey ranks third in the world in mobile shopping with about half of Turkish consumers shopping online. Turkey’s online retail market is expected to double to 4,6 billion EUR by 2020 from 2,3 billion EUR in 2015, according to report « Multichannel Pricing Strategy » from the Boston Consulting Group and Boomerang Commerce. And Turkey also recently became the best emerging country for mobile banking investments, thanks to factors like a high percentage of youth, a high percentage of cell phone users (95% cell phone penetration rate), a healthy financial sector and high number of credit card transactions, reported a 2015 BBVA Research Study.

With around 60.000 start-ups set up every year in the country, the European Investment Fund (EIF) identified many assets in the country such as a strong skills base, an entrepreneurial spirit and a record for creativity and innovation.

Turkey is among the frontrunners in the digital space and also advanced the G20 agenda on digital economy with the first-ever B20 Digital Economy Forum.

While we see many opportunities to enhance exchanges and trade in goods and services between the European Union and Turkey, a number of significant challenges remain. European and global ICT industry face a variety of market access barriers that in principle should not exist under the existing Customs Union. These barriers are unfortunately increasing rather than diminishing. Further, notwithstanding the need to ensure the enforcement of existing provisions, it is indeed also high time to modernise the scope of the customs union to make it fit for the new digital age. DIGITALEUROPE is pleased to present some recommendations for a widened customs union which reflects new 21st century trade ambitions.