Operation of the CU
The CU means that for industrial goods, Turkey and the EU form a single customs space. Turkey imposes the EU’s Common External Tariff, the same external tariff applied by all states within the CU to goods imported from outside these territories. This eliminates the need for ‘rules of origin’ – complex rules to identify the economic ‘nationality’ of a product and its components in order to determine the correct tariff – which are normally found in free trade agreements (FTAs). Proving the proper origin of a product to customs authorities at the point of entry to a country can be time-consuming and costly. The existing agreement therefore ensures the free circulation of industrial goods between the EU and Turkey.
As part of the CU, Turkey has aligned its domestic legislation with the EU’s internal market rules on product standards.2 In addition, to guarantee a level playing field, Turkey is required to implement EU rules on intellectual property rights and on merger control, and enforce EU rules on collusive and monopolistic practices and behaviour. Turkey was also obliged to create a State Aid Monitoring and Supervision Board to align the control of state aid with the EU framework (though at present the law is only partially enforced).3 State aid refers to any advantage granted by the EU and/or Turkish public authorities through state resources on a selective basis that could distort competition and trade between the EU and Turkey.
2 ‘Internal market’ and ‘single market’ are used interchangeably to denote the legal framework enabling the free movement of goods, services, capital and people across the EU, through harmonization of rules and the elimination of technical, legal and regulatory barriers to trade, also known as ‘non-tariff barriers’.
3 European Commission (2018), Turkey 2018 Report, SWD(2018) 153 final, Commission Staff Working Document, Strasbourg: European Commission, pp. 70–71, https://ec.europa.eu/neighbourhood-enlargement/sites/near/files/20180417-turkey-report.pdf (accessed 24 Apr. 2018).