A Modernization So Close Yet So Far? A Strategic Perspective on the Customs Union 2.0 Discussion Between the EU and Turkey

This paper is centered around the strategic and economic perspective concerning the value of a modernized Customs Union for both parties. The research is aimed to assess the benefits of a Customs Union 2.0 from a strategic perspective for the European Union and Turkey by applying the concept of strategic management. This allows to identify the strategic needs and options and provide strategic recommendations for action. By surveying firms operating under the treaty, in-depth insights regarding the state of business activities and desired areas of improvement were obtained. The mutual need for modernization was concluded to sustain and facilitate economic growth, competitive advantage, and prosperity under the treaty. When promoting the modernization process and deepening of bilateral ties, both parties’ focus must be centered on the CU’s economic and geopolitical benefits. The survey was conducted among firms with German equity participation located in Turkey. The CU’s crucial role and its position as a solid base for bilateral economic relations were emphasized by the results. Administrative burdens and customs procedures, non-tariff barriers to trade, and the certificate of origin represented the main struggles. E-commerce was identified as the most favorable sector of expansion among the results. The overall results reaffirm the importance of modernizing the CU from an economic and strategic perspective.