By Barçın Yinanç
In contrast to President Recep Tayyip Erdoğan’s declaration that the EU is not a priority for Turkey, new trade and industry measures that are taking shape within the 27-member bloc remain an urgent matter for large sections of the economy.
The draft text of the Industrial Accelerator Act (IAA) sent by the Commission to the European Parliament and the European Council has deepened the concerns voiced for more than a year by representatives of the business community. If adopted in its current form, it stands to strike a serious blow to Turkey-EU trade, according to experts.
Vice President Cevdet Yılmaz and Trade Minister Ömer Bolat are scheduled to go to Brussels to attend the Turkey-EU business summit scheduled for Oct. 13. They will be accompanied by a large delegation from the business community.
The IAA aims to favor European-made goods in public support schemes and public procurement. It introduces “Made in EU” requirements in addition to decarbonization criteria in energy-intensive and clean technology sectors.
Previous lobbying by Ankara yielded limited results, as the group of countries led by France, which endorses a strict “Made in Europe” approach against Chinese competition, appears to outweigh those countries which favor a more inclusionary approach with the “Made with Europe” motto.
Although Germany led the countries that seek narrower “Made in Europe” rules, the news that Paris is getting Berlin on its side raises alarm bells in Ankara.
The Turkish automotive sector stands to receive the biggest blow, unless changes are made to the draft.
Turkey’s total automotive exports were $41.5 billion in 2025. Of this, $30.11 billion went to the EU, representing 72.5% of automotive exports. With a total volume of €217 billion, trade between Turkey and the EU represents one of the country’s most balanced and mutually beneficial trading relationships.
The IAA draft envisages that components sourced from countries that are customs union partners of the EU could be considered within the scope of “Made in EU,” said Çiğdem Nas, a prominent expert on the EU: “However, access to public procurement would reportedly be subject to additional conditions, including equal treatment by the country concerned towards EU suppliers and participation in the World Trade Organisation (WTO) Government Procurement Agreement (GPA).”
For the automotive sector, the draft also envisages a requirement that final assembly of electric and hybrid vehicles takes place within the EU in order for such vehicles to qualify under the relevant provisions, according to Nas, who is the secretary general of the Economic Development Foundation.
This would create obstacles for Turkey, particularly in commercial vehicles, where it is a net exporter to the EU, Nas told me.
NEED FOR RECIPROCITY ON PUBLIC TENDERS
Turkey has recently made amendments to the public procurement law and work continues for a bilateral agreement on public procurement between EU and Turkey. So far, Ankara has not moved to sign the WTO’s GPA.
The public procurement law endorsed by the parliament in 2002 has been changed at least 200 times. Public procurement has been one of the government’s most important sources of economic patronage, providing a mechanism through which companies close to the government receive significant financial support.
It remains to be seen whether the changes made to the law will meet the reciprocity criteria on public procurement. If not and if the draft is endorsed in its current form, the automotive industry risks failing qualifying for EU public procurement tenders. The requirement for final assembly to take place in the EU will also be a major obstacle.
Failing to solve these challenges will force Turkey to retaliate, which would have a further detrimental effect on already deteriorating ties with the EU.
EU DOESN’T CARE ABOUT TURKISH LOSSES
Cevdet Yılmaz and Ömer Polat will be accompanied by Nail Olpak of the Foreign Economic Relations Board (DEİK) and Mehmet Ali Yalçındağ, coordinating chairman of the Türkiye–Europe Business Councils.
DEİK published an open letter in the Financial Times last January calling for the revival of the accession process, an updated customs union and deeper economic relations.
EU capitals are not in the mood to listen to Turkey’s potential losses as they are solely focused on their own interests in view of the ongoing global trade wars. Ankara’s campaign has to switch to underlining the potential harms inflicted on the EU by excluding Turkey and the consequences of pushing the Turkish economy more towards Russia and China.
