The request of the European Commission to modernise the existing EU-Turkey Customs Union is motivated by the necessity to adapt the contemporary EU-Turkey trade relations, raising substantially the beneficial for both parties.
With the evolution of the economic environment and the significant growth of EU-Turkey trade, the Customs Union that entered into force in 1996 is becoming less and less equipped to deal with the modern-day challenges of trade integration. The first EU-Turkey High Level Economic Dialogue last April underlined the potential of its modernisation. The modernisation and extension of the Customs Union could unlock further opportunities for EU companies in the agri-food and services sectors and the public procurement market. Respect of democracy and fundamental rights will be an essential element of the agreement.
Turkey is the EU’s 5th largest partner in trade in goods. The value of bilateral trade in goods has increased more than fourfold since 1996 and currently amounts to €140 billion annually. The EU has a positive balance of €17 billion. For Turkey the EU is the most important trading partner, representing 41% of Turkey’s global trade. Moreover, two thirds of foreign direct investment (FDI) in Turkey currently originates in the EU.
The upgrade of the EU-Turkey trade relation forms an essential part of the efforts made by the EU and Turkey to deepen their relations in key areas of joint interest identified at the EU-Turkey Summit of 29 November 2015 and in the EU-Turkey statement of 18 March 2016. By making this proposal, the Commission continues to deliver on the commitments it has made. (Source: European Commission)
On December 2016, the Council prolonged the economic sanctions targeting specific sectors of Russian economy until 31 July 2017 – sectoral restrictive measures, initially imposed on 31 July 2014 as a response on Russian position in Ukrainian conflict. They are targeting financial, energy and defense industries sectors plus dual-use goods.
Later, on March 2015 the European Council decided to establish a connection on sanctions to complete implementation of the Minsk agreements, aimed at conflict resolution in Ukraine. Unfortunately Minsk agreements were not implemented by the end of 2015 as expected. Subsequently to its decision to couple the sanctions to Minsk agreement implementation the sanctions, imposed on Russia have been prolonged already several times.
The latest assessment of the implementation of the Minsk agreements by the European Council meeting on 15 December, the heads of states and governments agreed to continue the policy of sanctions against Russian Federation. The decision was proceeded by written as it was a unanimous decision without any further changes of the text.
As previously the restrictive measures are concerning the limitation of access to the EU primary and secondary capital markets for five biggest Russian state-owned financial institutions and their majority-owned subsidiaries established outside the EU; three leading energy and defence companies; export and import ban on trade in arms; ban on dual-use goods for military use or military users in Russia; curtail Russian access to a number of sensitive technologies and services enhancing oil exploration and production.
The sectoral sanctions are combined with targeting of individuals, considered by EU as responsible for continuation of the Ukrainian conflict: visa ban and asset freeze in case applicable. At present there is a 152 strong list of individuals and 37 entities until March 15 2017, and the initial restrictive measures in response to ‘illegal annexation of Crimea and Sevastopol” until 23 June 2017.
Source: EU Council, EEAS