Reinvigorating Turkey’s Transatlantic Enthusiasm Through TTIP

Reinvigorating Turkey’s Transatlantic Enthusiasm Through TTIP

08:45 03 April in ACTUAL
Joshua Walker, Vice President, Global Programs

Joshua Walker, Vice President, Global Programs

German Marshall Fund of the United States’ On Turkey Series | 2 April 2015

Joshua Walker & Alison O. Patch

Turkey was conspicuously absent when the world’s elites gathered at February’s Munich Security Conference. At the last minute, Turkey’s delegation pulled out after Israel was added to a joint session on the Middle East.[1] Beyond the specifics of this ongoing bilateral dispute, Turkey’s absence is a broader sign of its leadership’s displeasure with its transatlantic partners and what Ankara sees as being taken for granted as a geostrategic ally.

As they prepare for the April meetings of the World Bank and IMF in Washington next month, world leaders once again have the opportunity to choose strategic inclusivity by allowing Turkey a larger role in negotiations for the Trans-Atlantic Trade and Investment Partnership, also known as TTIP. As the only Muslim-majority NATO member that is truly a cross-regional power in its own right, Western leaders must carefully consider new ways and means for including an increasingly distant Turkey into a transatlantic framework. As Ukraine dominates the European agenda and the so-called Islamic State the Middle East, Turkey continues to hold a critical geostrategic position. At the same time, Turkey is looking eastward towards partnerships which offer new economic and security opportunities as European promises have grown stale. In order to reinvigorate Turkey’s westward-facing enthusiasm, transatlantic leaders should prioritize deeper integration of the Turkish economy with Europe and North America through TTIP.

A Declining Alliance?

After decades of European-facing foreign policy, the future of Turkish-EU relations is ambiguous. For years Turkey has pursued a multi-avenue approach to the transatlantic alliance. Not only a loyal member of NATO since 1952, Turkey is a founding member of many Western-led economic and political organizations, including the OECD, IMF, World Bank, and G-20, for which it currently holds the presidency. In the 1990’s Turkey made historic progress towards the European Union through joining the European Customs Union which helped make Turkey a vital part of Europe’s business supply chain with foreign investment throughout the country. Indeed the favorability of average Turkish citizens to transatlantic partnerships is once again on the rise. According to the German Marshall Fund’s 2014 Transatlantic Trends poll, 45% of polled individuals described their perception of the EU as favorable – up an astounding 10% since 2013. In the same poll, 53% deemed EU membership desirable – the first time such results have been achieved since 2006. Even in the seemingly unpopular security sector in which the majority of Turks are unfavorable towards international leadership by any single country, EU leadership is favored over that of any other country.[2]

Yet these results can be misleading given the Turkish population’s notorious national prickliness that can be rallied by its leadership based on international events or perceived slights. Drawn-out negotiations with the EU and the revival of populist nationalism in Turkish domestic politics have led Turkey’s leaders to seek avenues for international cooperation that sometimes directly conflict with the transatlantic alliance. Last year Turkey refused coalition aircraft launch access in the fight against ISIL demanding a broader Syrian strategy first be developed. Turkey also is currently negotiating a missile defense system contract with China, after rejecting integration of the system with NATO.[3] And as Russia’s Rosatom begins building Turkey’s first nuclear power station, cooperation between these two countries will remain pragmatic for at least the minimum guaranteed 60-year lifespan of the power station.[4]

Business deals with deep security implications are becoming the norm for a Turkey increasingly divided on the future of the country’s relationship with the West. At the Tenth Trilateral Strategy Group Meeting organized by the German Marshall Fund of the United States in partnership with the Ministry of Foreign Affairs of Sweden, Turkish Industry and Business Association and Koç Holding in Stockholm[5], Turkey’s diverging perspectives on transatlantic identity were made clear. For some, transatlantic identity is “the ultimate provider of international security, economic prosperity, and democratic values”. For others, after a year of bad press for democracy on both sides of the Atlantic – from the US Torture Report to the Gezi Park protests – common interests, not shared values, provide the framework for the future of the alliance. For important constituencies in the transatlantic debates such as the Turkish business community, these interests must continue to converge. Today Turkish business needs a signal from the West about its continuing commitment in spite of domestic and regional developments that further complicate the political landscape.

An accession plan for Turkey’s eventual inclusion in TTIP can be a tool to rally these reliable constituencies, like the business community and pro-EU populace, to influence the strategic direction of the country back towards the West. In contrast, Turkish exclusion from TTIP negotiations, despite the country’s leader’s continued expression of their economic interest in the deal, has the potential to further infuriate Turkish leaders and fortify now declining perceptions of the West among the Turkish population.

Turkey and TTIP

Turkey’s inclusion in TTIP would be a rare win-win amidst various zero-sum geopolitical realities that could catalyze the transatlantic alliance. First, Turkey’s inclusion would add to the collective economic lift being touted. TTIP advocates claim that a successful deal would increase U.S. exports to the EU by a third and add more than one hundred billion dollars annually to U.S. GDP. Even as Turkey’s economy has slumped in the last year, a young population ambitious to be the world’s tenth largest economy by its centennial in 2023 would add to the collective lift. In the US, cash-strapped consumers would benefit from cheaper Turkish products as Europe does. In Europe, a broader framework for Turkish-European cooperation would be established, especially in the volatile energy sector, which could eventually breathe new life into the EU process.

Second, it would help spread free-market and democratic ideals. Originally envisioned as a lever to open global markets, TTIP also carries the message of economic and political freedom. That message would be strengthened by Turkey’s inclusion. Since the wars in Iraq and Syria, a growing number of American and European companies are basing regional operations in Turkey. Inclusion in TTIP would expand the impact of investment already coming from Turkey, directly contributing to economic growth in neighboring countries. As a liberal market economy, Turkish commercial actors would become the main vehicle in disseminating rules and values associated with this system. A TTIP with Turkey would build bridges to economies that are increasingly turning to Russia and China for investment. TTIP with Turkey brings these markets closer to the West rather than pushing Turkey farther east.

Third, it would strengthen a waning transatlantic partnership that increasingly is being seen as rhetorical rather than substantive. Through increased economic ties, TTIP offers a tangible way to solidify transatlantic relations through business-business and people-people opportunities that will in turn strengthen existing government-government connections. Over the last decade, Turkey’s pursuit of EU membership and closer ties with the West enjoyed strong support from its population, support that has waned as talks have stalled. As reflected in Ankara’s harsh anti-Western rhetoric on occasion, the desire of the Turkish population to pursue further relations with the West may not survive another prolonged negotiation. Signaling that Turkey is being considered for TTIP underlines shared understanding of Turkish concerns about being left out of this historic transatlantic deal. Bringing Turkey on board earlier rather than later creates and preserves avenues for future dialogue that will be blocked if TTIP continues without a clear plan for Turkey’s eventual inclusion.

Fourth, Turkish exclusion from TTIP would negatively impact the Turkish economy and potentially unbalance the existing economic relationship between Turkey and the EU.[6] Due to the nature of Turkey’s Customs Union with the EU, the TTIP agreement would provide the U.S. with tariff-free access to the Turkish market, but leave Turkey with continued restrictions in the U.S. market. Such a situation would create further asymmetry in U.S.-Turkey trade and create an additional burden on Turkey’s trade deficit. Without a clear access rout to TTIP membership, in the short term Turkey may seek out adverse ways to correct the situation, putting the customs union between Turkey and the EU under pressure. On the other hand, providing an easy passage for inclusion would incentivize the Turkish leadership to make the various market reforms the U.S. has been pushing for all along.

Losing Turkey’s European Champions

The West is in danger of losing the most important constituency for its continued commitment to transatlantic relations as champions of EU membership, the Turkish business community. Unless the West shows that it is prepared to honor its commitments and include Turkey in its strategic future, we risk the continued deterioration of relations and loss of cooperation. Turkish business needs a signal from the West about its continuing commitment in spite of domestic and regional developments that further complicate the political landscape.

Opponents of including Turkey in TTIP do so out of fears of complicating an already complex negotiating process. They claim a separate free-trade agreement with Turkey is a better approach. However, these concerns fail to address the existing situation within Turkey. As it is already a member of the European Customs Union, Turkey could be easily integrated into a TTIP agreement, using the Customs Union as a template. Turkey has already made great strides improving both infrastructure and the ease of doing business to meet European standards. However, aware of the current complex political climate in the EU and US, Turkey’s leaders are skeptical that a separate agreement could be reached if the TTIP train leaves the station without them. In the meantime, they see Western leaders unconcerned about the negative effects the deal promises to bring to their economy. Such a TTIP risks increasing the already considerable political backlash against the United States, that remains Turkey’s strongest anchor in the transatlantic alliance.

Turkey’s future remains with the West. Its transatlantic value has never been more apparent as it remains a relative island of calm in a tumultuous neighborhood. Turkey’s inclusion in a TTIP deal now is precisely the olive branch that is needed to restore this critical strategic relationship. At its core, TTIP is a geostrategic tool meant to shore up old alliances and revive the global economy. The winners of Turkey’s inclusion will not just be weekend shoppers in Paris or Peoria, but the future of the transatlantic alliance and the opportunity to spread the free-market and democratic values that it represents throughout the world. The upcoming April finance meetings in Washington offer the opportune moment to recommit Turkey as a valuable transatlantic ally, both in security and trade, in advance of its national elections in June and hosting its first G-20 Summit in November that will go a long way towards setting the tone of debates on Turkey in Ankara, Brussels, DC, and beyond.

Joshua W. Walker, PhD is a Transatlantic Fellow at the German Marshall Fund of the United States and Vice-President of Global Programs at APCO Worldwide where Alison O. Patch is an Energy Fellow and Master’s student studying Security Policy at George Washington University’s Elliott School of International Affairs.

[1] https://www.reuters.com/article/2015/02/06/us-turkey-israel-idUSKBN0LA1HG20150206

[2] https://trends.gmfus.org/files/2012/09/Trends_2014_complete.pdf

[3] https://www.bloomberg.com/news/articles/2015-02-19/turkey-to-keep-missile-system-outside-nato-as-china-deal-looms

[4] https://www.hurriyetdailynews.com/russia-gives-139-bln-for-turkeys-first-nuclear-plant-.aspx?pageID=238&nID=64867&NewsCatID=348

[5] https://www.gmfus.org/forum/trilateral-strategy-group

[6] https://www.worldbank.org/content/dam/Worldbank/document/eca/turkey/tr-eu-customs-union-eng.pdf