Union of Chambers and Commodity Exchanges of Turkey

Şekib Avdagiç, Vice Chairman of the Board of Directors of the Union of Chambers and Commodity Exchanges of Türkiye (TOBB), stated that Türkiye-EU relations were established on a legal basis with the Ankara Agreement signed in 1963.

Avdagiç said, “Shortly after the agreement, we established the Economic Development Foundation as a chamber system to inform our business world about the process and to contribute to Türkiye's relations with the EU.”

Stating that the history of the Foundation is essentially parallel to the history of Türkiye's EU relations and that IKV has become the business world's window to the European Union, Avdagiç said

“The Economic Development Foundation is an EU school, library and teacher for the business world. At the same time, it informs all segments of society about the EU. It provides consultancy to our governments on EU issues without really expecting any financial return. As the Union of Chambers and Commodity Exchanges of Türkiye, we, together with our chambers and commodity exchanges, will continue to contribute to the work of the Economic Development Foundation. On the occasion of IKV's General Assembly, I would like to share TOBB's views on Türkiye-EU relations. The most advanced and institutionalized form of the integration process is manifested in the economic field. The support of the business community for Türkiye's EU integration is ahead of other segments of society in Türkiye and in the European Union.

The results of a field study conducted by the Union of Chambers and Commodity Exchanges of Türkiye and EUROCHAMBRES confirm this statement. As an activity of our Türkiye-EU Business Dialogue Project, a field study was conducted in Türkiye. A similar study was conducted in the 27 EU member states. In fact, we had previously conducted these studies in 2008 and 2013. In our latest research, we found the following: The business community in Türkiye continues to support the EU accession process. This support is still above 60 percent despite everything. I think this support is very valuable. Maybe the Türkiye-EU accession process has actually stopped. However, economic relations have not slowed down thanks to the existing Customs Union.”

Comparing 1996 with the end of 2022, Avdagiç said that the volume of trade increased 4 times and that the European Union has become Türkiye's most important source of foreign capital investment.

Avdagiç said, “We all know the need to expand the scope of the Customs Union and improve its functioning. In short, there is a need for modernization in the Customs Union. The scope of the Customs Union should be expanded by including agriculture, services and public procurement.”

Stating that when green and digital transformation is considered together with the modernization of the Customs Union, it will make a significant contribution to both sides, Avdagiç said, “It is clearly seen in our research that the interest of businesses in the European Union in the Turkish market has increased compared to the results of 2013.”

Emphasizing that companies in EU member states also support the updating of the Customs Union, Avdagiç said, “Businesses in the European Union also support the cooperation between the EU and Türkiye on the Green Deal and the digital single market.”

Noting that there is a favorable environment to carry Türkiye-EU economic relations even further, Avdagiç concluded his words as follows:

“The EU is Türkiye's largest export and import partner. About a quarter of our imports originate from the EU. About 41 percent of Türkiye's exports go to the EU. Türkiye is the EU's 6^th largest trading partner. This is also very important. Difficulties in obtaining visas for business people have a negative impact on the rate of increase in our trade volume. This problem needs to be solved urgently. On the other hand, road transportation in Türkiye-EU trade provides a serious logistical advantage for fast delivery of goods. However, existing transportation quotas delay the delivery of imported and exported goods. They also increase costs. We need to solve the problem of road transportation quotas.”

- “The economy is undergoing rapid change and transformation”

Ayhan Zeytinoğlu, President of the Economic Development Foundation, said that the economy is going through a period of rapid change and transformation.

Zeytinoğlu said, “In the effort to achieve growth, stability and efficiency in the economy, the priorities of adaptation to the digitalizing world and transition to sustainable production and business methods have been added. The threat of climate change is intensifying every day.”

Zeytinoğlu underlined that an updated and deepened Customs Union will have a significant impact on Türkiye's position in European supply chains and its competitiveness in the EU market:

“Fast and affordable access to European markets, especially in transportation, is a critical factor in maintaining competitiveness. Transportation costs, which were 10,000 dollars per container during the Covid-19 pandemic, have become considerably cheaper today. The container fee for transportation from Shanghai to Rotterdam port has dropped to 1500 euros. However, transportation from İstanbul to Rotterdam costs 2,200 euros. The same fee goes up to 3,300 euros for truck transportation. This shows how decisive transportation costs are, especially when it comes to competing with a major supplier like China. We must solve the problem of speed and cost in transportation by modernizing and speeding up the railways.

The EU is providing a grant of €275 million for the Halkalı-Kapıkule Railway Project, which will ensure Türkiye's high standard rail connection with European countries. The first phase of the project, the Çerkezköy-Kapıkule line, is scheduled to be completed by the end of the year. Such joint projects can be funded through IPA funds, the Türkiye Investment Platform and EU initiatives such as the Global Gateway. Under the Global Gateway, the EU will mobilize an investment of €300 billion between 2021-27. These investments will be channeled into sustainable and high-quality projects that also take into account the needs of partner countries. As the business world, we are already integrated into the EU through TOBB.”

- “The slowdown in the euro area is likely to deepen further”

Erdal Bahçıvan, Chairman of the Board of Directors of the İstanbul Chamber of Industry (ISO), said that the Covid-19 pandemic, the Russia-Ukraine war and the recent stagnation in global economies continue to increase uncertainties about the future of the world.

Bahçıvan said, “While we are going through this process, which is defined as a period of multiple crises, the latest global crisis we are experiencing has come to our agenda as the fastest rise in inflation in the last 40 years. While inflation has reached the level of a cost of living crisis in many countries, we are witnessing that inequalities are increasing in countries.”

Stating that the slowdown in the euro area, which entered a technical recession as of the first quarter, is likely to deepen further, Bahçıvan also noted that developments in energy supply will continue to affect the performance of this region:

“In addition to all these developments, the compromise on Finland's and then Sweden's accession to NATO is valuable in terms of signaling a normalization in our country's foreign relations. With the support of this positive climate, it is our greatest hope that the problems we are experiencing with the EU will be resolved. We also believe that our country will make all the necessary constructive efforts to overcome the current crisis, as it did in the first signing process of the Grain Corridor Agreement.

In this critical process, the EU is an indispensable partnership for us and has been at the top of our trade volume for years. Our exports of 103 billion dollars to the EU, which reached a trade volume of 200 billion dollars last year, also corresponds to approximately 41 percent of our country's total exports. I would like to emphasize that it is of great importance that we redefine a sincere relationship with the EU that is sustainable, has a timetable and definite results, and that we eliminate uncertainties. The European Union should continue to be a center of attraction for our country with its standard of democracy, economic wealth and high quality of life. To this end, the goal of full membership of the European Union should be preserved and the process should be given a new impetus.”

Bahçıvan underlined that while negotiations with the EU are being carried out, the Customs Union Agreement should also be revised and revised according to the conditions of the day.

Stating that Türkiye should also benefit from the support and privileges to be provided to EU countries in terms of sustainability, Bahçıvan noted that the private sector should definitely take part in the negotiations as well as the inclusion of sustainability in the negotiations.

Bahçıvan emphasized that in order for industrialists and traders to communicate effectively with their partners in EU countries and to market their products more competitively in target countries, the ability of employees of companies to travel to EU countries should be as much of a priority as the easy access of products to these countries:

“First of all, the costs undertaken by the Turkish side for delegations, companies and fair visits such as visas, documents, transportation, support and financing are quite high. I would like to remind again that urgent steps should be taken to ease the visa problem, which has recently become one of the most serious obstacles especially for our business people. We are faced with appointments given months later, short-term visas and applications that often result in rejection. We hope that positive developments will not only remain in the form of declarations but will be carried forward with concrete steps.”