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Exit option: Turkey

Overview

Turkey joined the Council of Europe in 1949 and the North Atlantic Treaty Organisation (NATO) in 1952.  In 1963, the Ankara Association Agreement was signed as a step towards creating a customs union between Turkey and the European Community (EC). Turkey applied to join the EC in 1987.

In 1995 the EU established a customs union with Turkey which covers trade in manufactured goods but not agricultural goods. As a result, Turkey has to follow the EU trade rules and tariff reductions as it signs new free trade agreements. This means Turkey cannot start its own free trade deals. The process of Turkey joining the EU remains slow due to tension over Turkey’s large population, low individual wealth, diplomatic stance on Cyprus and proximity to Syria. As of 2015, only 14 of the 33 areas of negotiation have started. For the first time in two years, negotiations advanced in December 2015 on economic and monetary policy.

A minority of Leave supporters think that Britain should adopt the Turkish position of having a customs union for industrial goods after exit.

Strengths

  • The Turkish option’s main strength is that, by keeping Britain within the EU’s customs union, there would be no new barriers to goods trade for UK exporters. Some argue that even if Britain got a good free trade agreement with the EU, or joined the European Economic Area like Norway, the burdens of passing goods through customs offices and conforming with complicated paperwork called the ‘rules of origin’, would be too costly to businesses.
  • This option would probably allow Britain to limit migration, in the same way Turkish migration rights to the EU are limited to a privileged visa arrangement. Britain would be able to alter or remove social and employment regulation, and would be outside the agricultural, fisheries and regional policies. This option is a much bigger saving for the Treasury than the Swiss or Norwegian options, as Turkey pays very little for its membership.

Weaknesses

  • Britain would still need to follow most of the single market’s regulations, and would not have the same kind of arm’s-length influence that Norway has. Britain would also be unable to negotiate its own free trade agreements – which most Leavers see as a major benefit of Brexit – and would have to abide by new EU agreements like TTIP without helping to negotiate them.
  • The Turkish option would not give Britain free trade in services or the free movement of capital, which are often seen as more important than the free movement of goods. This is due to the importance of finance to the City of London, and services to the UK economy as a whole.