Business Applications Under the Turkish EU Association Agreement: Opportunities and Challenges

The Turkish-EU Association Agreement was signed in 1963 with the aim of establishing closer economic relations and ultimately Turkey`s accession to the European Union. The agreement set the framework for the development of a customs union between Turkey and the EU, which went into effect in 1996. Since then, the Turkish economy has undergone significant changes, characterized by a growing export-oriented manufacturing sector and a burgeoning service industry. This article explores the business applications of the Turkish-EU Association Agreement and the opportunities and challenges it presents to Turkish businesses.

Opportunities

The customs union established under the Turkish-EU Association Agreement opened up the European market to Turkish goods, effectively removing trade barriers between the two entities. As a result, Turkish businesses gained access to a market of over 500 million consumers. This opened up new opportunities for Turkish exporters, particularly in the manufacturing sector, to sell their products in the EU.

Furthermore, the customs union has facilitated foreign direct investment (FDI) in Turkey. European companies have invested heavily in Turkey, recognizing the country`s strategic location at the intersection of Europe, Asia, and the Middle East. This investment has contributed to the development of the Turkish economy and has created new business opportunities for Turkish companies.

Challenges

Despite the opportunities presented by the Turkish-EU Association Agreement, Turkish businesses have faced some challenges in accessing the EU market. One of the major issues is compliance with EU regulations and standards. EU regulations are strict and can be difficult for Turkish firms to meet, leading to increased costs and delays in accessing the EU market.

Another challenge faced by Turkish businesses is competition from EU companies. European companies have taken advantage of Turkey`s low labor costs to set up manufacturing facilities in Turkey, effectively competing with local Turkish companies. This has put pressure on Turkish companies to innovate and improve their competitiveness.

Conclusion

The Turkish-EU Association Agreement has opened up new opportunities for Turkish businesses to access the European market and attract foreign investment. However, it also presents challenges, particularly in terms of compliance with EU regulations and competition from EU companies. Turkish businesses must be proactive and adaptable in order to take advantage of the opportunities presented by the agreement, while also addressing the challenges it poses. Overall, the Turkish-EU Association Agreement remains an important framework for the development of economic relations between Turkey and the EU.