WASHINGTON (Reuters) - Turkey is pushing for involvement in a proposed free trade pact between the United States and Europe which it fears could leave it sidelined and hamper its ambitions to become a top 10 economy over the next decade.
Trade was high on the agenda in a meeting on Thursday between U.S. President Barack Obama and Turkish Prime Minister Tayyip Erdogan. The Turkish leader is worried a deal could hurt his nation’s commerce with Europe and the United States.
Erdogan wrote to Obama earlier this year raising concern about the impact of such a deal on Turkey, most of whose trade is with Europe, and urged Washington to work in parallel on a similar deal with Ankara, Turkish officials said.
“As the United States pursues a new trade and investment partnership with the EU, I want to make sure that we also keep deepening our economic ties with Turkey,” Obama told a joint news conference with Erdogan at the White House.
He stopped short of saying any sort of free trade agreement was under discussion with Turkey, but said Washington and Ankara had created a “new high-level committee” aimed at increasing mutual trade and investment.
Washington and Brussels are expected to begin talks on the proposed trade pact in July and hope to finish in one to two years. If successful, the final agreement would cover half the world’s economic output and about a third of global trade.
Turkey has a customs agreement with the European Union under which a third country signing a trade deal with the EU gets automatic access to Turkish markets, but Turkey does not get the same reciprocal benefit for its exports.
“We’re already suffering because every free trade agreement the EU signs with third countries ... we are asked to give the exact same kind of facilities. Then we’re in an uphill battle,” said a Turkish government official.
“That’s why we’re appealing both to the United States and to the European Union: if you’re going to create a trans-Atlantic economic space, then Turkey should definitely be part of it.”
Several options were under discussion, the official said, including a separate bilateral agreement with the United States or giving Turkey a seat at the table in the EU negotiations, although one diplomat said that looked unlikely.
“I understand the Turkish concerns. We have a customs union with Turkey where our economies are considerably integrated. An agreement like this will have consequences for Turkey,” an EU diplomat said.
“I know that Turkey wants to discuss with the American side how to move forward on their bilateral relationship and I think that’s only normal,” the diplomat said.
Carol Guthrie, a spokeswoman for the U.S. Trade Representative’s office, said the new Turkish-U.S. committee would assess the impact of Washington’s discussions with the EU on its trade relationship with Turkey but did not comment on whether a separate deal with Ankara might be explored.
Erdogan said trade with the United States had more than doubled to $20 billion from $8 billion when he first took office a decade ago but said it still needed to be boosted further.
“There’s huge potential in many areas,” a source close to the Turkish government said.
“The U.S. doesn’t have quotas for many sectors and products that even the EU, with which we have a customs union, applies.”
Additional reporting by Doug Palmer in Washington and Ayla Jean Yackley in Istanbul; Writing by Nick Tattersall; Editing by Paul Simao