In 2014 the World Bank published two important reports on the Turkish economy. The first report published in the Spring assessed the customs union (CU) between Turkey and the European Union, concluding that both sides had benefitted but the CU was in need of modernization. A second World Bank report focused on Turkey’s emergence over the last two decades as a dynamic, growth-oriented economy and manufacturing and export powerhouse. However, this report also warned that without further reforms, Turkey risks becoming stuck in a “middle income trap”. At a time when concerns are growing about Turkey’s geopolitical orientation, its commitment to the West and its allegiance to liberal democratic values, could Turkey’s ongoing economic transition become a means to re-anchor Turkey to the transatlantic community?
On February 18, the Center on the United States and Europe (CUSE) at Brookings hosted a panel discussion to explore the economic challenges and opportunities ahead for Turkey. In particular, the panel considered how modernizing the customs union and expanding U.S.-Turkey economic relations—through either a bilateral free trade agreement or the possible inclusion of Turkey in the Transatlantic Trade and Investment Partnership (TTIP)—could play a key role in Turkey’s overcoming the “middle income trap.”
Brookings TÜSİAD Senior Fellow and Turkey Project Director Kemal Kirişci moderated the conversation. Panelists included Martin Raiser, the director of the World Bank Office in Turkey; Sebnem Kalemli-Ozcan, professor of economics at the University of Maryland; and Stuart Eizenstat, former U.S. ambassador to the EU, former deputy secretary of the Treasury and current partner at Covington & Burling LLP.