Turkey: Free Trade Agreement

Lord Hannan of Kingsclere Excerpts

Tuesday 27th April 2021 Grand Committee

[Lord Hannan of Kingsclere (Con)]

My Lords, I congratulate the noble Lord, Lord Purvis of Tweed, on bringing this important Motion before us. His argument that Turkey was the demandeur because we run a trade deficit with it strikes me as one that was answered by his countryman Adam Smith 245 years ago in that little phrase,

“Consumption is the sole end and purpose of all production”.


What is the benefit of having a trade surplus? It is not as though you can keep silos filled with extra stuff. Cheaper imports are a terrific way of raising living standards for all of us, especially for people on low incomes. Exports are the stuff you want to get rid of to pay for those cheaper imports. Understanding that point, now 245 years old, seems to me the way to get to a world where we are lifting restrictions and allowing people to prosper.

Equally, trade is a remarkably poor instrument of foreign policy. Let us all accept that there are at least questions to answer when it comes to human rights in Turkey. Any kind of generalised sanctions—and I would call refusing to have an FTA the weakest form of trade sanction—are almost always counterproductive. They create a siege mentality. They hurt the wrong people—ordinary folk in the other country and in your own—while driving support to the regime of which you disapprove. There are sanctions that you can take, but generalised trade sanctions almost always fail for the same reason that they kept Castro in power in Cuba: they create a sense of people needing to rally to the authorities.

Let me make a final point on Turkey’s relationship with the customs union, which, as noble Lords have said, came to an end with this FTA. It is important to understand quite how disadvantageous Turkey’s position within the customs union was. Turkey was obliged to follow all EU concessions in talks with third countries. When the EU did a trade deal with Japan or South Korea, Turkey was required to match all the concessions, but there was no reciprocal obligation on Japan or South Korea or whoever to make the concessions vis-à-vis Turkey that they were making vis- à-vis the EU.

That position was negotiated transitionally. It was supposed to be a step to full membership. It was acceptable—indeed, it made very good sense—in those terms. However, it makes very little sense as a permanent situation for Turkey. We have huge opportunities to do what both Trade Ministers—our own and her Turkish counterpart—said when this deal was negotiated at the beginning of this year remains our ambition: to have a much deeper, more ambitious and more comprehensive commercial relationship with Turkey.

It seems pretty clear that Turkey’s EU ambitions are over; that is clear whether you talk to people in Brussels or in Ankara. I suspect that Turkey will therefore look to change the terms of its trade relationships with the European Union because, once they cease to be transitional, they become deeply unattractive. Britain should have no qualms about seeking the closest trading relationship possible with a country that for a long time guarded NATO’s flank against the horror of Bolshevism and to which we may one day look to guard our flank against religious extremism.