By Barçın Yinanç
Concerned by the risk of being excluded from trade with Europe, the AKP government is planning to amend the public procurement law.
Trade Minister Ömer Bolat conducted several rounds of discussions with representatives of the private sector to ask about allowing foreign companies to participate on fair and equal conditions in public procurement tenders. The Foreign Ministry has also been in touch with the private sector to push for a change for better alignment with the EU regulations.
Local companies have not raised any objections, as the losses from exclusion from European markets appear to be greater than the risks they are facing when competing with foreign companies in Turkey, according to a Turkish official.
The automotive industry is especially concerned about the new Made in Europe initiative. It stands to be the biggest sector to suffer, as the changes made to the new regulation, following lobbying by Ankara, failed to alleviate the industry's concerns.
TRADE MINISTER MET WITH EU ENVOYS
Bolat met EU ambassadors on April 13 to convey the concerns of the automotive sector.
At the initial stages of the Made in the EU initiative, the main debate revolved around which non-EU countries would meet the EU-made criteria.
After intense lobbying by Ankara, countries with a customs union with the EU were included in the definition of “Europe.”
'We are pleased that the intensive and constructive diplomatic engagements we have conducted in recent times with the European Union, based on mutual understanding in economic and trade matters, have yielded positive results,' said the trade minister in a post on X last month.
CHALLENGES FOR TURKEY
Yet it soon became clear that it was too early to rejoice. The inclusion of too many countries like the ones that have a free trade agreement (FTA) with the EU, or those that have signed the World Trade Organization’s (WTO) Agreement on Government Procurement, remains a challenge for Turkey.
There are more than 40 countries that have an FTA with the EU, while just three countries have a customs union: Turkey, Andorra, and San Marino.
“When you read the draft, it doesn’t seem like we’ve received any particularly special treatment,” said managing partner at Ussal Consultancy, Ussal Şahbaz.
“If the scope of “Made in Europe” becomes this broad, it wouldn’t be wrong to say that — by the natural principle of action and reaction — this scope will later be narrowed through subsequent interventions. Now, everyone will lobby for their own interests and try to exclude sectors or countries that don’t suit them from the ‘Made in Europe’ category. And this will be done through technical criteria,” according to Şahbaz.
“For example, when it comes to certain bolts used in cars, we might suddenly find that Turkish products are not considered ‘Made in Europe,’ while Indian products are,” he wrote.
“As Mercosur countries and India can now export goods to the EU with zero (or low)
customs duties, this will negatively affect Türkiye’s competitiveness in the EU market, which is Türkiye’s primary export market,” wrote Ali Baydarol in his analysis for the Istanbul Policy Center-Mercator.
QUESTIONS ON IAA
At this stage, problems are lurking in the ambiguous wording in the draft of what is called the Industrial Accelerator Act (IAA) on concepts such as “assembly in the Union” or the requirement for reciprocity to qualify, according to an official from TÜSİAD, Turkey’s top business organization.
Turkey is trying to understand what kind of amendments to the law would fulfill the reciprocity criteria, in other words, how alignment with the EU should be interpreted.
The public procurement law is sensitive for the government, since the law has been amended more than 200 times since 2002. The government is under criticism for making these changes in order to favor pro-government companies, which means the law even fails to provide equal competition conditions for Turkish companies.
It therefore comes as no surprise that Turkey is not a signatory to the relevant WTO agreement.
The IAA targets industries, including steel, cement, aluminum, but the automotive industry is set to be the biggest at risk, which explains why Bolat specifically raised this sector with the EU ambassadors.
Automotive exports rank first in Turkey’s total exports. In 2025, Turkish exports in the automotive sector reached $40.8 billion, with more than 60% of all exports in this sector destined for the EU.
