Common Economic Dynamics of EU Enlargement Circles

The EU-Turkey negotiation process is clearly inextricable from the enlargement dynamics of the European Union overall. Three primary steps are now under watch by all affected parties:

1. Preparation for the full membership period
2. Accession period
3. Post-accession period

Turkey is set to complete this complicated process within 10 years. CPS, the leading Turkey-EU public affairs company, offers services which are more critical now than ever.

Preparation for full membership period

As soon as the preparation period for full membership (negotiations) commenced, the liberalization of trade under the Customs Union agreement started to be structurally reinforced by legal and administrative reforms in a full membership perspective.  This is greatly felt by the government, the public opinion and the private sector.

Subsequently, trade flows have started to spread and rise; foreign investors have begun entering the market with the aim of penetratimg it the earliest. Throughout the preparation period, national and foreign investment, having different, potentially conflicting interests, are engaged in a risky transformation situation, known as 'destructive creation.' This risky transformation needs to be monitored and managed.

With its sound knowledge of both the EU's and the Turkish economic, legal and political arena, CPS is the leading consultancy company able to assist all local or foreign companies in their business assessment and market strategy with regard to Turkey.

Accession Period

When accession negotiations are concluded, the candidate country is placed in a different frame in terms of legal, administrative and economic arenas due to the  harmonization with EU rules and regulations.  Initially, however, the transition periods and derogations may prevent a sound system to be set immediatly. It is essential to effectively monitor all opportunities and risks in the mean time.

At this stage competition is on the rise, profits are shrinking and producers tend to favor the ever-liberated niche markets.

Post Accession Period

The real effects of full membership on the new Member State and the actual potential of the market are revealed by the completion of transition periods and the end of the derogations. From this time on, threats and opportunities in the specific new Member State within the EU Internal Market can be identified.

• After this stage, foreign companies start to face more national and foreign competitors due to an increasing level of prosperity among consumers.
• National industrial and economic operators absorb the rules of the EU Internal Market and start to have a say in the international markets after a period of inexperience.
• During these evolutions, companies which were accustomed to operating in a protective economic environment and did not take any measure can hardly comply with new business world developments and begin to fade out.

Impact Assessment

Throughout Turkey's steady advancement towards EU membership, it has adopted a huge body of legislation in the process of harmonization with the EC Acquis. Without doubt, changes in the Turkish legal framework directly affect business since they will entail immense transformation in the dynamics of the economy. An impact assessment must be prepared, taking into consideration this external factor, as well as internal developments and features unique to Turkey which differentiate Turkey's accession to the EU from the earlier round of enlargement. As the negotiations continue and further legislation is adopted into the Turkish legal system, changes in the economic environment become more apparent, stressing the need for an impact assessment.

Our initial focus in establishing an impact assessment is to analyze the 35 negotiations chapters in order to determine which chapters are relevant to the business community and to match up business sectors with relevant chapters. This exercise provides a framework that allows CPS to determine the most suitable method to study the impact assessment for each chapter-sector match, since each match would require the impact to be assessed employing different approaches. After picking the proper method of study, the impact assessment itself is executed on sectoral basis, which includes an evaluation of the state of affairs and the anticipated impact, possible measures to prevent any harm, while seizing potential opportunities. Finally, the outcome of this study is delivered to the beneficiary in an easy to understand format.