‘Something’s wrong’: Türkiye frustrated over EU customs union impasse

Turkish officials and the business community on Monday reiterated their frustration over yearslong stalled negotiations to update the customs union with the European Union, while also warning that transport quotas and visa hurdles hinder the economic relationship.

“If there is a negotiation going for 10 years, there is something wrong,” Nail Olpak, head of the Foreign Economic Relations Board (DEIK) told a conference in Brussels that gathered Turkish and European business communities and officials.

Türkiye has long urged the EU to break the impasse on modernizing the 30-years-old trade agreement, whose overhaul Ankara says would be a win-win.

The deal was struck in 1995, before the European Commission formally proposed revamping the pact in 2016, but the Council of the EU never gave it a mandate to start negotiations amid a host of disagreements.

“In a partnership if there is a loss, big parties’ loss is bigger, small parties’ loss is smaller,” Olpak said at the EU-Türkiye Business Summit.

Turkish officials and businesses have long argued that the current agreement is outdated and no longer reflects global trade realities or the depth of today’s economic relationship.

The pact was the first substantial customs union between the EU and a non-member country, covering industrial goods and processed agricultural products. A modernized agreement would be expand the scope to services, agriculture in full and public procurement.

Both Turkish and EU officials on Monday acknowledged the evolving dynamics, including global trade complexities, including tariffs and protectionist policies, as well as geopolitical tensions, all of which Trade Minister Ömer Bolat said makes their partnership “more essential” than ever before.

“After three decades, global trade realities have evolved, and the current framework no longer fully reflects these new dynamics,” Bolat told the summit via video link.

“The modernization of the customs union has therefore become essential, not only to strengthen our economic integration but also to ensure a fair, predictable, and forward-looking trade environment.”

Expanding the scope to cover services, digital trade, green transition, and regulatory cooperation will enable the two sides to unlock new opportunities, enhance competitiveness, and address remaining structural challenges, the minister noted.

Olpak echoed Bolat’s view.

“Global economy has changed dramatically since the 1990s, and our customs union, a cornerstone of our cooperation, must evolve accordingly,” said Olpak.

“Updating it is not only an economic necessity, but also a strategic opportunity to unlock new potential in services, e-commerce, and sustainable value chains,” he added.

The EU is Türkiye’s biggest trading market. Türkiye is the bloc’s fifth-largest trading partner. Bilateral trade volume reached a record high of $220 billion in 2024, Bolat said.

“Our exports to the EU reached $109 billion, marking the highest level ever. The EU accounted for 41% of our total exports. At the same time, Türkiye’s share in the EU’s total imports rose to 4% in 2024 – the highest level on record,” the minister noted.

Arnaud Thysen, director-general of the European Business Summit (EBS), also stressed that EU-Türkiye economic ties remain a “cornerstone” of regional cooperation.

“With bilateral trade at record levels, and Türkiye now the EU’s fifth-largest trade partner, the moment is urgent for a bold renewal of this strategic alliance,” Thysen said at the event.

Defense, security

For decades, Türkiye and the bloc have enjoyed good trade ties and cooperation on migration. However, relations have been strained over multiple issues, including the prolonged process of expansion of the scope of the customs union, maritime issues with Greece and Greek Cyprus, and EU policies on refugees.

Europe, meanwhile, has increasingly turned to Türkiye since Russia launched its invasion of Ukraine, seeking deeper security ties to reinforce its eastern flank.

Many European nations have announced plans for major increases in defense spending. The EU itself, driven by fears of a Russian attack and doubts about U.S. security commitments, has approved creating a 150 billion euro ($176 billion) EU arms fund to boost the defense industry, labeled the Security Action for Europe (SAFE) scheme.

Türkiye boasts the second-biggest army in NATO and is known for its robust defense industrial capabilities, expertise that Bolat said can “significantly contribute to EU defense resilience and capability development.”

“We believe that integrating Turkish defense firms into the common procurement projects under SAFE initiative is a strategic necessity that will enhance overall European security,” said the minister.

“Such a partnership would be a crucial step toward building a more secure and resilient Europe.”

Olpak also said energy security, climate resilience, connectivity and defense industry cooperation are areas where Türkiye “can contribute significantly to Europe’s strategic autonomy.”

“In this context, Türkiye’s active participation in SAFE and development of joint projects, hold critical importance,” he added.

Gert Jan Koopman, the European Commission’s Director-General for Neighborhood and Enlargement Negotiations, described Türkiye as a “decisive actor contributing to regional stability” and connectivity.

Koopman stressed that Türkiye and the EU share the same geography and that their economies are “deeply intertwined.”

Emphasizing the continued importance of working on the customs union, he said, “If constructive engagement continues and we see progress toward restarting negotiations on the Cyprus issue, work towards the modernization of the customs union will also resume.”

“This, of course, will help reshape the full potential of EU-Türkiye relations,” he noted. “Europe is not only a political project. It is a shared vision of coexistence, common prosperity, and peace. Türkiye, with its historical background and dynamism, is an integral part of this vision.”

Mehmet Ali Yalçındağ, the coordinating chair of DEIK Türkiye-Europe Business Councils, stated that both the European Union and Türkiye are facing various challenges due to recent global political and economic developments.

Yalçındağ referred to the sizes of the two sides’ populations and economies, saying they could jointly create a “center of gravity” that could “make us a true game-changer.”

“With a long term and strategic mindset, by establishing a more robust integration between EU and Türkiye, we will achieve a less dependent economic structure,” Yalçındağ noted.

“But if we fail, continuing with the existing dependencies as it is, will be inevitable.”

Goods move freely, people don’t

Officials and business leaders also repeated their frustration over the bureaucratic hurdles citizens and the business community are facing in securing Schengen visas, as well as the quotas on land transportation.

Lengthy processing times and a growing number of EU visa rejections in recent years turned into a row that has been straining already sensitive relations.

“The absurdity is this: goods are free, but there are quotas for the trucks that will carry them, and we also face visa problems for the owners of the goods,” Olpak said.

“If we are genuinely committed to deepening our trade and investment relations, we must ensure free circulation of good, people and service and avoid protectionist attempts,” he noted.

Bolat said the current visa practices and the transport transit quotas “continue to create significant bottlenecks.”

“These restrictions not only complicate the implementation of the customs union but also limit the free flow of goods, services, and investment between Türkiye and the EU.”

EU’s recent introduction of a phased visa facilitation mechanism (visa cascade) has offered some relief, according to Bolat, who still said “this action is not able to meet the need.”

“When we consider the depth of economic and commercial integration between Türkiye and the European Union, it becomes clear that additional measures are necessary,” he noted.

“For our business community and technical professionals, the issuance of long-term, multi-entry visas has become an essential requirement.”