Talks and steps to update the Customs Union agreement with the EU, which came into force in 1995 but does not include agriculture, services and public procurement sectors, have gained momentum recently. Both Turkey and the EU seek to expand the scope of the agreement, which will positively affect mutual trade relations in the above-mentioned sectors. Last week, the European Commission asked for a mandate to initiate negotiations on the expansion of the agreement with Turkey. The update, which Turkey has demanded for a long time, will enable all Turkish agricultural products to enter the EU market. Furthermore, Turkish firms will be able to participate in tenders with EU companies, and the scope of industrial export products will be expanded.

At the point of updating the Customs Union agreement, Economy Minister Nihat Zeybekci said they have conducted an impact assessment analysis consisting of four different alternatives. Noting that the second alternative, which covers a full update of the Customs Union, including agriculture, services and public procurement, is a positive option for both the European Union and Turkey, Minister Zeybekci pointed out that according to the impact analysis, Turkey's gross domestic product (GDP) will increase by 2 percent by 2030 in the coming period, stressing that in the event of full integration of this agreement, Turkey's transition to a new era will start.

Zeybekci, who arrived in Ethiopia to hold official talks, answered journalists' questions on the plane. On a question regarding the latest status of the Customs Union update, Zeybekci said the issue is now becoming clearer with alternatives starting to emerge and formalize. Recalling that the EU Commission released a statement on the issue last week, Zeybekci said the authorization request of the commission, the Cabinet of the European Union, unanimously passed. "We think that this decision will be issued in the first quarter of next year, and we do not think there will be any problems during the negotiations done so far, but it is possible," Zeybekci added.

Informing journalists about the process, Zeybekci noted that both the EU and Turkey had independent institutions carry out impact assessment analyses on the issue and both reviews were simultaneously completed. "We see positive results for both sides. We submitted an impact assessment analysis for four different alternatives to the Cabinet," Zeybekci said.

Listing the four alternatives submitted to the Cabinet, Zeybekci said, the first one is to update the Customs Union, but to be cautious in agriculture and provide a 50 percent opening, while the second alternative is to fully update the Customs Union, including agriculture, services and public procurement, to take part in decision-making mechanisms in every alternative and to be an automatic party in free trade agreements (FTAs) to be signed in third countries. Explaining that the third alternative is the transformation of the Customs Union into a comprehensive FTA, Zeybekci stressed that parties will have the right to set custom tariffs separately for all products in this alternative. Zeybekci added that the last alternative would be the complete transformation of the current Customs Union into an FTA with the industry alone, highlighting that this alternative means going back from the current state of the agreement.

"We have evaluated all these alternatives; as far as I can see, the second alternative is a positive option for both the EU and us. We will focus on this option. Of course, other options are not off the agenda," Zeybekci said.

'Turkey will benefit from the process'

Underlining that even with its current state, the Customs Union has provided important contributions to the economy, Zeybekci said in the event of the full integration of this agreement in the coming period, Turkey's transition to a new era will start. With this update, both Turkish and European companies can mutually serve in all fields in the services sector, European companies can enter all services even in municipalities, and European companies can participate in all public procurements in Turkey, while Turkish companies can also participate in public bidding in Europe, Zeybekci added.

Pointing out that in case of the implementation of the second alternative, which includes the full updating of the Customs Union, including agriculture, services and public procurement, it will make a significant contribution to the economy, Zeybekci said according to the impact analysis study relating to the year 2030 conducted in light of the second alternative, this agreement will increase Turkey's GDP by 2 percent by 2030, and it will bring a 24.5 percent increase over the normal rate of increase in total exports and a 23 percent increase over imports.

'It will be completed by 2018 at the latest'

Touching on the importance of establishing a partnership with the EU in the economic sense, Minister Zeybekci said Turkey can establish an economic partnership with the EU will have many other advantages with regard to other economies in the world, noting that from this perspective, Turkey will come up with huge profits in the 2030 period.

Stating that they intend to come to an important point by the end of 2017 regarding the issue of updating the Customs Union, Zeybekci stressed that it will be a very intense process, which needs to be completed in 2017 or by 2018 at the latest since some processes such as the Transatlantic Trade and Investment Partnership (TTIP) are progressing very rapidly.

He also added that the process will proceed in coordination with the Economy Ministry, and later they will be in dialogue with the private sector.

Agricultural 'conservation policy' is changing

Indicating the riskiest area in this issue is agriculture, Zeybekci said Turkey does not have sustainability like competing in all areas. "There are areas in which we have the advantage, and we will develop rapidly in those areas. For example, in fresh vegetables, fruits, cereals and citrus and in the poultry sector we have an advantage, but we are disadvantaged in the meat sector," Zeybekci said, recalling that Turkey has followed a conservative policy in agriculture so far by applying high customs duties. Zeybekci underscored that now Turkish people will consume in a price and quality environment compatible with EU standards in agriculture and agricultural products and that prices will fall. "We will continue to protect agriculture and our farmers in the same way, but this time we will protect them with budgetary facilities and resources as the EU does, instead of high walls and customs duties. We will protect them through supports," he said. Answering a question, Zeybekci emphasized practices such as abandoning the production of agricultural products and area reduction will be beside the point within the process, stressing that restrictions in beetroot, milk production and some other things will be out of the question when entering the EU.