April 14, 2015
In March, Turkey and the EU agreed to take another look at the terms of Turkey's customs union agreement that has been in place for the last two decades. This agreement is key to the free flow of goods between the EU and Turkey and is integral to the continued economic growth of the region. Updating this agreement will help Turkey to more fully integrate into the EU economy. It is also a real opportunity for Turkey's agriculture industry to expand significantly.
As it stands, most goods are easily traded between Turkey and EU countries under the current customs union agreement. Agriculture is the exception. Despite the potential for growth in this industry, differences between Turkey and the EU on food safety standards and agricultural policy prevented agriculture from being included in the previous customs union. After 20 years of positive trade, it is time for these remaining issues to be resolved.
Traditionally, Turkey has been a world leader in the production of fruit and vegetables such as dried figs, hazelnuts and dried apricots. More recently, Turkey has diversified its agricultural exports to include sunflower oil, tree nuts, raisins, poultry, pasta and flour. Turkey became the world's largest exporter of flour in 2013, reaching $1 billion in trade. When you include Turkey's market for baked goods and bread, agriculture and the food trade amounted to nearly $5 billion in recorded trade surplus.
In addition, U.S.-Turkish agriculture trade is booming and it is a great sign of the industry's overall potential. Turkey's agricultural exports to the U.S. totaled $740 million in 2013. These products included processed fruit and vegetables at $158 million and vegetable oils at $101 million.
Still, there is more room for Turkey's agriculture industry to grow. As part of the country's vision for 2023, Turkey has set a goal to become one of the top five countries in the world in terms of agricultural production. Turkey is investing in agriculture with a plan to reach $150 billion in gross agricultural domestic product and $40 billion in agricultural exports in the next decade. In addition, the country continues to expand the amount of arable land from 5.4 million hectares to 8.5 million hectares.
Compared to this potential for growth, the differences between the EU and Turkey on agricultural issues are easily resolved. EU agriculture safety standards and agriculture policy requirements, which have been hurdles in the past, are no longer as problematic for Turkey's producers. The food safety standards required by the EU are increasingly common in Turkey, a country that is now accustomed to meeting these standards for its trade with other countries like the U.S. The food market inside Turkey is also more sophisticated and largely meets EU safety requirements.
The EU's Common Agriculture Policy is the second area where the two parties need to agree. This policy would require the Turkish government to equalize its support for specific agriculture sectors with some of the EU's support for its own agriculture sectors. Already, the EU and Turkey have similar levels of support, and negotiators simply need to agree on the specific sectors that are impacted. This is a manageable step that both countries can take together.
There are still many steps to be taken towards an updated customs union that will help expand Turkey's agriculture industry as well as overall trade. However, when taken one at a time, each step is achievable and will have a significant, positive impact on Turkey's agriculture sector. Now is the time for Turkey to actively leverage international trade agreements to create the pathway for future expansion of its agriculture sector. It is also time for the EU and the U.S. to welcome this growth, as it is important to regional stability and continued strong economic ties between these allies.
President, Turkish Heritage Organization