Why Turkey wants a closer customs union with the EU

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Good morning. I’m back, for what is set to be a brutal stretch until the end of the year, with crucial outcomes — including the future of the EU’s budget, financial support for Ukraine and the make-up of the Polish and Dutch governments — in flux.

Today, European Council President Charles Michel is in Budapest to try to find a deal with Viktor Orbán on the first two of those issues, with the Hungarian prime minister in a bombastic, uncompromising mood.

Here, our trade correspondent outlines Turkey’s demands for the EU customs union, while our man in Warsaw explains why prime minister-expectant Donald Tusk is still waiting for his shot to form a government.

Special treatment

Closer ties with Turkey can be an uncomfortable topic in Brussels. Now, Ankara is pushing for a more comprehensive customs union, writes Andy Bounds.

Context: Brussels opened membership talks with Turkey in 2005 but they have languished, though President Recep Tayyip Erdoğan has recently called for progress. Both formed a customs union in 1995, which allows industrial and processed agricultural goods to flow freely — at least in theory.

Mehmet Fatih Kacir, Turkey’s industry minister, told the FT that the deal needed modernising to remove bottlenecks, and should include a broader set of goods and services.

One big complaint is the long queue of lorries at the Turkish-Bulgarian border due to border checks.

“Turkish products are freely able to be sent into the customs union. But the trucks which are carrying Turkish products are not able to travel everywhere in Europe. And also the drivers are not able to travel,” Kacir said. “That kind of thing should be solved.”

He also said ecommerce and services should be included in its customs union, as well as farm produce: “We should also have a talk on the agricultural side together.”

The European Commission said visa and vehicle access were up to member states. “Road transport within the EU is strongly regulated and not fully liberalised,” a spokesperson said.

“It is for the member states to give to the European commission the mandate to negotiate EU road transport agreements with third countries,” the spokesperson added. To date, only Switzerland has such an arrangement, alongside temporary deals with Ukraine and Moldova because of the Russian attack on the former.

Kacir’s other plea could also fall on deaf ears. He said that Turkey should be exempted from the EU’s carbon border tax, which starts in 2026.

The levy will ensure that producers of imported steel, concrete and other materials do not undercut EU manufacturers who have to pay for their carbon emissions.

“Clearly we think that the border of the customs union should be the border of the carbon trade,” Kacir said.

Chart du jour: Tax the ships

Major European shipping countries, including Spain and Italy, have called for a pause on the EU’s plans to charge vessels entering their waters for carbon emissions as part of the bloc’s emissions trading scheme (ETS).

Delay tactics

Since leading a coalition to a landmark election victory, former Polish premier Donald Tusk has been made to wait for his return to office, writes Raphael Minder.

Context: Tusk’s Civic Platform and its coalition partners won a majority of parliament seats on October 15, defeating the ruling Law and Justice (PiS) party.

Today, Tusk will nonetheless watch current Prime Minister Mateusz Morawiecki present his own new government team, even though he has no path to get approved by a parliamentary majority.

The figure behind the PiS stalling tactics is President Andrzej Duda. He has added further uncertainty over Tusk’s appointment timetable with plans to travel in December, when he ought to be present to sign Tusk into office.

One of Duda’s senior advisers, Andrzej Dera, said last week that the president wanted to be in Geneva for the UN celebration of the 75th anniversary of the Universal Declaration of Human Rights, on December 11-12.

Dera said this meant December 13 was the earliest “realistic” date for Duda to be available for Tusk in Warsaw.

That date marks a poignant anniversary in Polish history, commemorating the day when the former communist regime imposed martial law in 1981.

But it is also the eve of the EU leaders’ summit that Tusk is desperate to attend to reaffirm Poland’s role in the EU following years of discord with Brussels, as well as his own credentials as former president of the European Council.

Could Duda still pull another surprise and travel from Geneva to Brussels to represent Poland at the EU table instead?

“It would mean a declaration of war on democracy on the part of the president,” warned Szymon Hołownia, a Tusk coalition partner who is the newly-appointed speaker of parliament.

What to watch today

1. European Council President Charles Michel visits Prime Minister Viktor Orbán in Budapest.

2. EU trade ministers meet in Brussels.

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