Globalisation, enlargement and the debate on Turkey’s place in the EU

Bosphorus Conference, Istanbul, Turkey, 15 September 2006

Peter Mandelson / EU Trade Commissioner

In this speech given to a conference organised by the Centre for European Reform in Istanbul on 15 September 2006, EU Trade Commissioner Peter Mandelson warns that the political repercussions of Europe’s response to the economic challenges of globalisation will impact on the ongoing debate on Turkish membership of the EU. Mandelson argues that Turkey risks becoming “the projected image of everything Europe fears about a changing world”. Mandelson argues that making the economic and political case for globalisation in Europe will be crucial in ensuring a “rational” debate on Turkey’s place in the EU.

Mandelson says: “The economic costs of the failure to make the case for enlargement and globalisation will be felt first in Europe, in relative economic decline and a shrinking fiscal base for our welfare states. But the political repercussions will also be felt here in Turkey: in the rising argument against Turkey’s place in the EU. Europe’s responsibility is to ensure that does not happen.”

He says: “In the EU many of the dissenting voices on Turkish membership are the same voices raised against globalisation. They reflect wider questions in European society: unemployment, migration, social tensions. Genuine anxieties that need to be addressed. It is hard to have a rational debate on Turkey and the EU while Turkey is the projected image of everything we fear about a changing world. So Europe has a side of the bargain to keep”

Mandelson insists that Turkey also has “the power to shape the perceptions and defy the prejudices”. He calls on Turkey to press on with economic and legal reforms and to ratify and implement the Ankara protocol, arguing that the current refusal to do so “plays into the hands of those who have reservations about Turkish accession and creates a justification for pushing the whole membership process into a siding.”

Mandelson says that Turkey needs to “convince European companies that Turkey is a reliable and profitable place to do business, a hub for the Mediterranean and a logical gateway to the single market for key goods like textiles.”

Arguing that Turkey’s “place should in due course be in the European Union” Mandelson concludes: “the strongest argument Turkey can offer in the face of those who seek to slow down and even stall its accession process is an unwavering commitment to the responsibilities of membership: not as an obligation but as a choice and a European vocation.”

Let me start by thanking our hosts – the British Council, the Centre for European Reform and the Turkish Economic and Social Studies Foundation.

This is my first trip to Turkey as European Commissioner for trade, and it is in many ways overdue. I won’t keep you from your dinner long, but I wanted to make a few remarks about Turkey and enlargement, and the challenges that Turkey and Europe share in the face of globalisation. And the way in which enlargement is a response to that challenge.

This is an audience of experts. Every geostrategic, economic, and legal aspect and nuance of Turkey’s relationship with the EU is probably covered by the collective experience in this room. I am a trade negotiator, but I am also a politician. So this is a politician’s perspective.

Globalisation

Trade negotiation puts me on the globalisation frontline. In my work I see the way global trade is reshaping our markets. Changing what we buy, and where we buy it from. Changing what we produce and where we sell it. Lifting people out of poverty. Changing old jobs, and old economic certainties. Confronting many people with dramatic change.

Anxiety about change is probably the defining feature of modern European politics. Somewhere in the background of every debate about economic nationalism, Chinese imports, immigration, national identity or sovereignty or security is the fear that the old certainties are being replaced by rapid change. The fears are understandable but we should not let them lead us to misunderstand reality and make the wrong response.

While some European companies are certainly at the sharp edge of the global export market, Europe is hardly struggling to compete in the global economy. European growth is good and our manufacturing industry has maintained its share of world GDP in the face of global competition. Europe remains the world’s biggest exporter and its comparative advantage in innovation and design and the knowledge industries remains strong. For all the anxiety, the competitive spur of integration in the global economy has created more jobs in Europe than it has destroyed.

So on balance globalisation is raising our boats in Europe not sinking them. Yes, we need to keep diversifying; keep specialising, keep innovating. We need to reach out to those who are affected by rapid economic change and help with adjustment, before they reach out for the simplistic, anti-foreigner solutions of protectionism.

Enlargement

And – on reflection, on balance, on the evidence – we need to keep on enlarging. Enlargement is central to Europe’s response to globalisation and it is often described as our most successful policy. This is a bold claim, but one that I believe is justified.

In expanding from six to twenty five Member States, we have created the world’s largest economy. The world’s biggest market for EU producers. A bigger magnet for inward investment. Since the completion of the single market in 1992 foreign direct investment in the European Union has multiplied 15 times, intra-European trade in goods has increased by a third, added 1.8% to EU GDP and created around 2.5 million jobs. Enlarging and uniting has made us stronger.

Of course enlargement has brought challenges. But the fears that preceded 1 May 2004 proved to be greatly exaggerated. None of the predicted catastrophes materialised. The European Union’s institutions continued to work, even if we now sense the need for important institutional reform. The economies of the ‘old’ Member States have not been destroyed or undermined by the fast growing economies of the newcomers. The economies of the new Member States remain stable and strong alongside their more consolidated neighbours. We have benefited from the skills that workers from the new member states have brought, though we have had to manage social and economic consequences.

Enlargement’s failure – to the extent that there is one – is not economic or institutional but political. We have failed to sell it. We have failed to balance the argument by insisting on the value of worker mobility and labour migration. We have failed to sell the value to our economy of the single market and the end of closed national markets in energy, or telecoms or air travel. We have failed to sell the fact that one day a European will be able to drive from Brussels almost all the way to the Bosphorus without taking out their passport. We have not celebrated our own success enough. We do not value sufficiently the historic achievement of a stable, peaceful, democratic continent, united after two wars: the Second World War and the Cold War.

Like globalisation, enlargement shows that national identities can survive the end of national borders. That cultures are porous and durable and the exchange of ideas and people and technology enriches us, rather than impoverishing us with sameness.

My job is trade. And I simply do not believe that you can trade in goods and services without trading in ideas and values. Both make us richer. But perhaps that idea unnerves as much as it inspires.

It’s easy to forget that our current borders are modern borders, and that until the eighteenth century the notion of a ‘nation’ didn’t describe lines on a map. No one would argue that the iron curtain represented an essential divide between the people it kept apart. It came down precisely because it did not. Europe’s languages, cultures and religions have always been a moving picture. Enlargement has kept pace with that picture. But we have still failed to convince too many Europeans that enlargement is a good thing.

Turkey

This clearly poses a problem for Turkey. I happen to believe that Turkey’s place should in due course be in the European Union. We are committed to the ongoing accession process. I believe the economic and societal benefits of Turkey’s membership of the EU would flow both ways. Turkey has a huge internal market, a young working population and a dynamic business environment. Turkey is key for the overall stability of the Middle East, the dialogue with the Muslim world. Europe needs Turkey as much as Turkey needs the EU.

But there are very significant issues we need to address: the size and large population of Turkey; the disparity of economic prosperity; the questions of cultural and religious identity.

So I do not agree with those who oppose Turkish accession, but I recognise their concerns. These are people not just in the EU but also in Turkey. The problem, as with globalisation and Europe’s response to enlargement, is in distinguishing between unfounded fears and legitimate concerns – and reaching the right policy conclusions.

Here in Turkey people fear that Europe is asking too much, that we want to force Turkey to conform to European norms, not just economic and legislative but cultural and religious. Turkey is being asked to choose European norms on human rights and political and cultural freedom because that pluralism is the essence of a European vocation. Turkey has made progress in these questions, but there is more to do. And without that internal impulse – and it has to be an internal impulse – nothing else matters.

In the EU many of the dissenting voices on Turkish enlargement are the same voices raised against globalisation and earlier enlargements. They reflect wider tensions in European society: unemployment, migration, social tensions. Genuine anxieties that need to be addressed. It is hard to have a rational debate on Turkey and the EU while Turkey is the projected image of everything we fear about a changing world. So Europe has a side of the bargain to keep

But Turkey does have the power to shape the perceptions and defy the prejudices.

The failure of Turkey to ratify and implement the Ankara protocol poses a serious risk for our negotiations. Your refusal to open your ports to vessels under EU flags plays into the hands of those who have reservations about Turkish accession as justification for pushing the whole membership process into a siding.

Economically I hope Turkey will press on with its reform effort with vigour. Recent economic progress in Turkey is a result of steady economic reform and the stimulus of the EU-Turkey Customs Union.

Progress towards EU membership will lock in reform and bring further opportunities. You need to convince European companies that Turkey is a reliable and profitable place to do business, a hub for the Mediterranean and a logical gateway to the single market for key goods like textiles. I have absolutely no doubt that can be done.

Conclusion

I’ve tried in a few minutes to draw together some large and complex political pictures in a way that suggests that they share a common theme. The economic costs of the failure to make the case for enlargement and globalisation will be felt first in Europe, in relative economic decline and a shrinking fiscal base for our welfare states. But I have tried to suggest tonight that the political repercussions will be felt here: in the rising argument against Turkey’s place in the EU.

Europe’s responsibility is to ensure that does not happen. The strongest argument Turkey can offer in the face of those who seek to slow down and even stall its accession process is an unwavering commitment to the responsibilities of membership: not as an obligation but as a choice and a European vocation.

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