Introduction
The European Union (EU) integration has been a long process coming and so far, it has incorporated a lot of countries. EU integration is centered on political, legal and economic integration but some countries are seen to integrate even on a social and cultural front. European integration has majorly been forged on geographical regions such as the Baltic region, Low Countries region, black sea region, British Aisles, central Europe, and the Nordic region (Euractv 2011).
Recently, Turkey has tried to join the EU but there seems to be significant concerns about its ability to smoothly integrate into the union. This process started in the late 80s because Turkey has historically been an associate member of the European Union, Council of Europe, Organization for Economic Cooperation and Development, Western European Union and other similar unions across Europe (Euractv 2011).
Turkey’s integration with the UE can be traced back to its signing of a Customs Union agreement with the EU, in 1995, which has been followed by negotiations between the Union and the country years later. However, the process of integration is estimated to last a decade because of the logistics and other underlying concerns between the two parties (Euractv 2011). Nonetheless, once the process is completed, Turkey is expected to be the biggest beneficiary.
This study seeks to analyze Turkey’s integration capability with the EU through the second best theory that analyzes optimal conditions to be met between two parties before economic satisfaction can be attained (Lipsey 1956, p. 11).
This theory will be useful in analyzing Turkey’s integration into the EU because over the past few years, there have been increased concerns by some EU members of the country’s ability to smoothly integrate with the other EU members but more concern has also been voiced regarding the country’s impact on EU’s expansion (Euractv 2011).
Theory of Second Best
The theory of Second best was developed by Richard Lipsey and it establishes the variables to be considered before economic optimality is attained (Suranovic 2009, p. 1). At the basic core of this theory is the assumption that if one variable does not meet economic optimality, then other variables (not considered to affect optimality) may have to be changed to create a general, optimal economic environment (Lipsey 1956, p. 11).
This assumption creates a number of problems in the economy because if one variable of the economy is corrected by another variable from another economic sector, the chances that economic efficiency will be attained are low. Though not practically evidenced, two imperfect variables in the economy should be left to cancel each other.
This observation has often led many governments to undertake fiscal and monetary policies which are out of the ordinary and in research circles, more caution has been directed at economists to analyze the theory-based conclusion that when one sector of the economy is improved, the likelihood of the entire economy improving is high (Lipsey 1956, p. 11).
The theory of second best has been applied to international integration from the premise that international economic integration is in itself a second best solution (Lipsey 1956, p. 11). This fact is true because the theory of second best solution narrates the different stages of integration (for instance through an abolishment of economic tariffs, non-tariff barriers and the likes) (Bohm 1987, p. 280).
The second best theory is normally compared to the first best solution (free trade) which is normally evidenced when economic integration ultimately results in political integration (this is the situation evidenced to have led to the European Union integration in 1999) (Lipsey 1956, p. 11). However, the first best solution does not exist in any country because no single economic integration has led to political integration yet. For instance, though the EU exists, all the member countries still hold on to their nationalistic identities.
The second best theory specifically applies to Turkey’s integration process because there have been a number of concerns regarding Turkey’s population, Economy, relations with other EU members, and its effects on the EU. These concerns are voiced as some of the major factors bound to lead to the lack of economic efficiency upon integration.
When analyzed according to the second best theory, the above factors are likely to shift the economic equilibrium expected to be derived from the Turkey-EU integration. These factors can be easily summarized as the trade barriers between Turkey and the EU.
Trade Barriers between Turkey and the EU
Trade barriers between Turkey and the EU are summed up as the variable elements leading to economic inefficiency. The first major barrier between Turkey’s integration with the EU is that Turkey’s population will give it a majority number of members in the European parliament.
It is estimated that since the country has more than 70 million people, the country’s number of members of the European parliament will be the second highest (World Bank 2006). In fact, it is said that Turkey’s number of members of European parliament will surpass Germany’s (The Economist 2007). Concern is also registered regarding the country’s impact on the future expansion of the EU because it will significantly limit the number of nations that can join the EU.
More concern has also been voiced on the number of inhabitants Turkey’s integration into the EU is going to bring because the country has a very large population which is more than 5% of EU’s population and therefore, the current state of affairs in the EU is going to be changed (The Economist 2007).
Moreover, there is more concern over the shift in balance of trade that EU’s integration will bring to Turkey, considering some of its major export and import partners are already members of the EU (People’s Daily 2008).
In addition, Turkey does not share a cordial relation with some EU member states such as Cyprus and Greece because of historical conflicts and therefore, objection is likely to be registered by these countries (Daily Telegraph 2010).
Turkey’s geographic location has also been voiced as one of the disadvantages or limitation to its integration with the EU because it has been compared to Morocco that has been denied membership to the EU on geographical grounds (The Economist 2007). Turkey’s geographical intrusion into the EU is estimated at only 3% of the European Union’s geography and it is feared that if the country is allowed into the EU, it will provide grounds for other countries (out of EU’s geography) to apply for membership.
Turkey’s customs barriers have also hindered its integration, or ability to trade with other countries, not only in EU but also in the rest of the world. Conventionally, Turkey’s custom laws have hindered the resale or return of goods to third parties or exporters. Moreover, the custom laws of the country bear strict penalties of noncompliance that scares aware traders, most of the time (China.org 2011, p. 1).
More importantly, Chinese exporters have had a problem with such laws because they have incurred several financial losses as a result and they have equally spent countless months in the courts solving trade disputes arising from the customs regulations (China.org 2011, p. 1).
According to the second best theory, the custom laws of the country fail to realize the optimal economic condition of the country’s import and export trade because the financial loss and legal costs associated with solving disputes arising from such custom laws beats the economic advantage of trading with Turkey in the first place.
According to the second best theory, the substitution of one economic advantage with another is likely to result in economic problems that are bound to affect the overall economic efficiency of a nation in the long run. To affirm this relationship, Turkey’s population, production capacity, fertile land, and demand have increasingly been cited by proponents of its integration with the EU that it will substitute the disadvantages the country poses to the EU (Öymen 1999).
For instance, these proponents have often cited Turkey’s military power as one of the advantages Turkey brings to the EU because it will position the EU as a global geostrategic player in the world, considering it has the second largest military force in NATO (Öymen 1999).
Also, the extent to which Turkey produces its goods and services is deemed one of the highest in the world because of the fact that it has the 15th largest economy in terms of gross domestic product (GDP) (and a very high economic growth rate as well) (The World Bank 2010).
The economic growth rate has been further spurred by the fact that the country is slowly divesting its economy from its traditional agricultural backbone that until 2009 constituted approximately 9% of the total country’s GDP (CIA World Fact book 2009). The following graphs best portray Turkey’s economic competitiveness
These positive economic facts about Turkey have been advanced by proponents of its integration as beneficial to the EU. These economic pluses have made Turkey stand out as a very competitive economy.
However, the positive attributes of the country over its barriers to trade still leaves a lot of concern in the eyes of proponents of the second best theory (based on the false assumption that a substitution of one sector of the economy over another is likely to create an economic balance).
However, when focusing on the country’s supply and demand, it should be understood that Turkeys’ supply and demand significantly affects its exports and imports and in the same manner, it affects its ability to trade with existing EU members because it already has a solid relationship with some of its members (with regards to demand and supply or export and imports) (People’s Daily 2008).
The above factors are summed up in the second best option theory as the elements leading to economic inefficiency when Turkey integrates with the EU. In a more comprehensive manner, the above elements are likely to cause an economic equilibrium in the EU.
Non-Economic Issues
Turkey’s women rights have been cited as one of the impediments to its integration with the EU because it has had a history of suppressing human rights (European Parliament 2007). For instance, Turkey has been cited to have only given women the right to vote in 1930 and even though women rights have been expanded, the country has yet to cover ground on the implementation of the reforms (European Parliament 2007).
The country’s religious makeup has also been frowned upon by most EU nations because there is fear that Turkey’s large Muslim population is going to lead to an increased immigration of Muslim inhabitants into the EU and this is likely to cause serious security threats (Bureau of Democracy, Human Rights, and Labor. U.S. State Dept 2006).
Lastly, the country’s article 301 that governs censorship laws in Turkey has often been cited by EU members that it is repugnant to the spirit of the EU. Article 301 states that: “a person who publicly insults the Turkish nation, the State of the Republic of Turkey, or the Grand National Assembly of Turkey, shall be punishable by imprisonment of between six months and two years…..expressions of thought intended to criticize shall not constitute a crime” (BBC 2005, p. 1).
These non-economic factors have been identified to cause a lot of jitters to some EU members, thereby making them oppose Turkey’s integration into the EU. According to the second best theory, these factors still constitute reasons likely to lead to economic equilibrium in the EU.
Conclusion
This study analyses Turkey’s integration with the EU in the context of the second best theory and it establishes that though Turkey poses significant challenges and advantages to the EU, the advantages it poses to the EU cannot be substituted with its disadvantages to create economic equilibrium.
Moreover, from a general assessment of the impediments to Turkey’s integration with the EU, we can see that Turkey poses more disadvantages to its integration than its advantages. Comprehensively, Turkey provides a good analysis of the second best theory, considering its economic challenges and consequent fears regarding the economic equilibrium shift it is likely to bring if it joins the EU.
References
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