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Turkey country profile

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Turchia Scheda Paese - Country Profile

Turkey country profile

GENERAL INFORMATION

Official name: Turkey
Surface: 783.562 km2
Population: 79.6 million (2012) Labour force 26.7 million
GDP: 751.3 billion $ (2012)
GDP per capita: 9.562 $ (2012)
Expected GDP growth: 5% (currently 16th world economy)
Capital: Ankara
Other important cities: Istanbul (13.9 million), Izmir (4 million), Bursa (2.7 million), Adana (2.1 million)
Government: Unitary parliamentary constitutional democracy
Religions: Muslim, Christian and Jewish minorities
Language: Turkish, other minorities
Currency: Turkish lira

POLICY FRAMEWORK

POSITIVE CHANGES

- Government stability
- Economic and political reforms
- Start of EU accession negotiations in 2005
- Redrafting soldiers role in politics
- Strategic depth and “zero problems with neighbours”
- Regional assertiveness
- Soft power/ mediator
- Intensification and diversification of foreign relations

ISSUES

- Democracy “in progress”
- Freedom of expression
- Kurdish question
- Weak opposition
- Gezi Park protests
- EU access negotiations deadlock
- Cyprus problem
- Deterioration of relations with Israel

MACROECONOMIC CONTEXT AND OUTLOOK

With more than 75 million people (more than a half between 25 and 35 years old) and a growing GDP, Turkey is an interesting country for foreign investments. Indeed, after the term BRICS, famous economists have created a new term to indicate new emerging economies MINT (Malaysia, Indonesia, Nigeria, Turkey).
Turkey has a fast-growing economy in a balanced political and economic context , a liberalised market and a reliable investments field with excellent infrastructures. Moreover there are advanced transport and telecommunication networks and new incentives to support a growing domestic market. Turkey has a highly qualified competitive and low cost labour market. Furthermore it is near to important markets and it has strong relations with Caucasus region, Central Asia, Middle East and Africa.

Other important aspects:

- The comparison between foreign trade volume and GDP was 49.5% in 2012; Turkey is perfectly integrated in the international trade system.
- Liberal model:Turkey has approached to a liberal economy which supports foreign investments, through targeted structural reforms and new liberal policies.
- A strong bank system: Foreign banks in main Turkish banks capital (Yapi Kredi – Unicredit, Teb-BNP Paribas, Oyak – ING);
- Incentives for foreign investors: Erdogan package, Free zones, International organisations, etc…;
- Economic dependence: Turkey has a negative balance of trade, especially in energy sector (recently it has been started a process in order to reduce economic dependence).

STRENGTHS

- Economic stability and attractiveness;
- Structural reforms;
- Strong economic fundamentals;
- Geographical position;
- Diversification and possibility to access in different markets ( 1.5 billion people);
- Young population and growing domestic market;
- Energy corridor through Europe;
- Sixth travel destination (35.7 million visitors), Turkish Airlines: 241 destinations in 104 countries.

WEAKNESSES 4

- Dependence on foreign capital flows and investors confidence;
- Dependence on foreign energy supply;
- Current account deficit.

WORLD PRODUCTION RANKING

- 2nd (after China) in terms of best construction companies (31 Turkish companies out of 225 best construction companies of the world);
- 2nd largest flat glass producer;
- 3rd largest mega yacht builder;
- 4th largest producer of ceramics and natural stones;
- 5th largest jewellery producer;
- 5th largest dried fruit producer;
- 5th largest ships builder;
- 6th largest cement producer;
- 10th largest producer of steel and iron;
- 16th largest car producer.

In Europe:

- Largest textile producer;
- Largest producer of fertilizers, televisions and buses
- 2nd largest steel and iron producer
- 4th largest communications market
- 4th largest producer of cars and accessories

GROWING SECTORS

CAR SECTOR (16th in the world)

- Because of its proximity to Europe and Asia, Turkey is one of the most important car producer;
- Turkey is the largest commercial vehicles producer and exporter in Europe;
- 17 main national and foreign companies, 4.000 secondary companies, 300.000 qualified employers;
- Lower labour costs compared to Europe, qualified labour force;
- Three families out of four do not own a car, therefore there are great market growth opportunities;
- The forecasted increase of the GDP per capita will boost the consumers purchasing power;
- Increasing opportunities in car parts industry.

TRANSPORTS AND INFRASTRUCTURES

REAL PROPERTY AND CONSTRUCTIONS

FINANCIAL SECTOR

ENERGY

- Turkey is one of the fastest-growing energy markets in the world;
- It has been forecasted an annual 6% increase in electricity demand from 2009 to 2023;
- The total investments amount forecasted until 2023 is 130 billion dollar;
- Renewable energies will increase by 30%;
- Well structured and organised legal framework in the energy field;
- The authority for energy market regulation (EPDK) works as an independent market regulator;
- “Feed-in tariff” to incentive investments in renewable energies.

HEALTHCARE SECTOR

- The biggest and fast-growing medical equipments sector, in the region;
- Healthcare transformation plan in order to improve the healthcare system quality and efficiency;
- Pharmaceutical market income was around 9.2 billion dollars in 2010;
- There are significant growth possibilities, because of the increasing population and a low consumption rate;
- Recently it has been created a new R&D law, in order to boost investments;
- Healthcare sector reforms such as centralised healthcare insurance, will increase and improve the access to healthcare services.

ICT

- New initiatives and R&D law to increase investments;
- Turkish ICT sector in 2011 has passed 30 billion dollars;
- Increasing demand for high-tech telecommunication services;
- There is an enormous growth potential, taking into into consideration the young population compared with west countries;
- Increasing budget allocated by the government for ICT public investments;
- High education for young qualified computer engineers and software developers;

MACHINERY

- 20% growth from 1990
- Small and medium enterprises are competitive and versatile;
- Machinery imports volume (21.3 billion dollars in 2010) is bigger than exports (9.4 billion dollars), this underlines an increasing machinery demand.

FOOD AND BEVERAGES

- Turkish families had a high consumption rate, 27% in 2010;
- Constant growth during last years. Turkish consumers are guided by large retail sector;
- Food and beverages consumption is increasing because of the young and numerous population;
- Turkey food industry has important export opportunities thanks to different agricultural products available in the country;
- Turkey is becoming one of the largest baking products market;
- In the last 10 years this sector has attracted over 4 billion dollars;
- There are many opportunities for new emerging products in Turkey.

FORECAST

2023 GOAL:

- GDP: 2.000 billion $
- GDP per capita: 25.000 $
- Export: 500 billion $
- 10th world economy

FOREIGN DIRECT INVESTMENT

DOING BUSINESS, EASY BUSINESS

- To start a new business in Turkey you need 6 days, and one day to create a society;
- We will help you starting a new equality-based business with local investors, according to the new Turkish Commercial Code;
- Every type of business entity is allowed;
- There are many costs and time advantages compared with other countries of this region.

GOVERNMENT GOALS

Boost foreign direct investments, safeguard foreign investors, create an investment “registration” instead of the earlier “approval”;
- Fundamental principals of the law 4875;
- Fair treatment;
- No pre-accession and pre-founding monitoring;
- No obligation imposed on action property;
- No obligation imposed on types of business entity;

TYPES OF BUSINESS ENTITY

There are different kinds of direct investments, for example a Joint Venture association or commercial Joint Venture. They are individual entities with variable legal independence (low for a representation office, high for legal persons i.e. limited companies). Most common societies for foreign direct investments in Turkey are: representative office, branch, limited liability companies, joint-stock companies.

REPRESENTATION OFFICE

It is the cheapest legal form investors, indeed it is not legally independent form its parent company. It represents a legal entity in Turkey, its role is to “explore the market”.

FOREIGN DIRECT INVESTMENT REGIME JOINT-STOCK COMPANY (Anonim Sirketi)

Characteristics:
- At least one associate (natural persons, juridical persons);
- Minimum share profit 50.000 TL;
- (¼ to immediately deposit and the remains in 24 months);
- Signatory administrators are responsible for company tax debts, except for the prior enforcement duty of share profit;
- Important: the working authorisation requires a 100.000 TL share profit and 1:5 ratio (foreign: local).

SOCIETA’ A RESPONSABILITA’ LIMITATA (Limited Sirketi)

- At least one associate (natural persons, juridical persons);
- Minimum share profit 10.000 TL (¼ to immediately deposit and the remains in 24 months);
- Every associate have representation powers. Associates can elect one or more administrators (associate or third party) but at least one associate must have the representation power;
- Associates are responsible for company debts, according to their participation quotas, there is the obligation of prior enforcement duty of share profit;
- Important: the working authorisation requires a 100.000 TL share profit and 1:5 ratio (foreign: local).

FREE TRADE ZONE (FTZ)

Turkey has four different special zones for investments:

- Technological development zones (TDZ)
- Organised industrial zones
- Industrial zones
- Free trade zones

FINANCIAL ASPECTS

- 20% corporate tax;
- In case of profits distribution, the law provides that 15% is withhold;
- Natural persons income tax of 15-35%
- VAT 18%
- Transfer piercing
- “Transfer piercing” regulation is mentioned in the society tax legislation and implementing regulation of 2007 and 2008. It follows the international OECD principals and in particular the “arm’s length”.

LEGAL SYSTEM CHARATERISTICS AND LEGAL ASPECTS

Civil Law: the legal system is similar to the Swiss Code and the Italian criminal Code. Regarding types of business entity, there are:

a) Limited partnership (Komandit Sirketi Kom. Sti)
b) General partnership (Kollektif Sirketi Koll. Sti)
c) Limited reliability company (Limited Sirketi)
d)Limited company (Anonime Sirketi)

Limited companies are the most common type of business in Turkey, which require 3-4 days to be established.

SUBSIDIES strong>

- The main subsidies promoted by the Government are:

- No custom taxes: total exemption from the payment of custom taxes on machineries coming from non-european countries;

- No VAT: total exemption from the payment of vat on machineries imported or bought and used for investments, provided by the “investment incentive certificate”;

- Reduction of corporate tax: reduction from 50% to 90% according to the investment value and the geographical area that covers;

- Reduction of employers social security contributions: subsidies for employers that have to pay social security contributions to their employees. These subsidies can be provided for 2 to 10 years;

- Public concession: The Ministry of Finance can allow the use of a land, for 49 years;

- Subsidies to help paying interests on loans: The government can pay interests on loans used for investments, only when are subsidies are expected.

- VAT refund: It is used only for investments on a prearranged area.

- Bilateral investment treaties with 85 countries;
- Double taxation agreements with 76 countries;
- Customs union with EU;
- Free trade agreements with 19 countries;
- Investments promotion and protection (L. 27 October 2003, n. 294)
- Agreement to avoid double taxation (L. 7 June 1993, n. 195)

FREE TRADE ZONE COUNTRIES

1. EFTA (Norway, Switzerland, Iceland, Liechtenstein)
2. Israel
3. Macedonia
4. Bosnia-Herzegovina
5. Palestine
6. Tunisia
7. Morocco
8. Syria
9. Egypt
10. Albania
11. Georgia
12. Montenegro
13. Serbia
14. Chile
15. Jordan
16. South Korea
17. Lebanon
18. Mauritius*
19. Kosovo*
(*) These agreements have to be approved

INSURANCE ASPECTS

SACE insurance conditions, without sovereign risk, bank risk, private risk and possibility to transfer the insurance registration SACE for export or foreign direct investment in the country.

TURKEY : AN EMERGING ECONOMY IN THE CENTRE OF THE MIDDLE EAST WARS

Turkey - un paese emergente nel mezzo della guerra

TURKEY : AN EMERGING ECONOMY IN THE CENTRE OF THE MIDDLE EAST WARS

Author: Diego Caballero Vélez
March, 2015

Currently, when we talk about Turkey the first image that appears in our minds is whose of rich cities, good economy, a great educational system that promotes EU spirit giving to Turkish students the possibilities to go to the EU for studying, etc. In general lines, our vision of this country are that is a Muslim one but with an occidental vision.

The importance of this country lies in the economic growth that starts in 2002 and still continues. From this year till now, the Turkish economy has maintained an average annual growth rate of 5%, that is an incredible figure taking in account the economic crisis in which we are and the external conflicts of his neighboring countries.

Turkey lacks of oil and gas reserves but the competitiveness of his services, most of all in the tourism sector, and his industry, compensates it. This competitiveness has done that many countries turn their gaze to Turkey for investment in export products. The sector of renewal energies has become one of the most important of the countries and the countries that want to invest, they do in this sector. They mainly proportionate the necessary materials that the country needs to keep up with the development of this sector.

But how has it succeeded such a thing like that considering that 30 years ago had a poor economy? The answer lies in two main points: social stability and rebuilding of all the system. The first element has been fundamental for the success of the Turkish economy, being that the country in the last decade has adopted a moderate stance away from extremism. The rebuilding of the system means that has been a rebuilding of the bank system and control of budget and investments in infrastructures, education, health and technology.

From 2002, there has been a fall in unemployment, low debt and budget deficit (1’9 GDP), although the economic rising in the last years has slowed. I should also emphasize the important rise of the middle class. But not everything seems to be good for the Turkish future. Erdogan, president of Turkey, whose Muslim nationalism is provoking that Turkey was not as laic as everybody used to think. This produces instability in the society, being that his neighbors are convulsive regions with extremism.

So, the economic future of Turkey lies in the developments of the neighboring wars as Syria´s, the advance of ISIS, etc., and his neutrality; the social stability and betting on the laic system that has done of Turkey a stability supporting the economic rise; and finally, keeping up investing in tourism and renewal energies always with a close economic cooperation with the EU.

LINK Turkey Gov.

SOURCES

- http://economia.elpais.com/economia/2013/06/07/actualidad/1370605232_985185.html
- http://www.cnbc.com/id/100390252
- http://www.foreignaffairs.com/articles/140338/daniel-dombey/six-markets-to-watch-turkey
- http://www.nytimes.com/2014/12/23/opinion/akyol-how-turkey-sabotaged-its-future.html?_r=0

Are Turkey and the European Union close to divorce?

Are Turkey and the European Union close to divorce ?

turchia-unione-europea-ad-un-passo-dal-divorzio
ARE TURKEY AND THE EUROPEAN UNION CLOSE TO DIVORCE ?

Author: Elisa Mariani
Translated by: Lorenzo Giusepponi
October 2016

In 1963 Turkey and the European Economic Community came to an agreement to encourage trade and bilateral economic relations.

After more than 50 years, despite the improvements achieved, the relation risks breaking up. Indeed, it has been since 1987 that Turkey has shown willingness to enter the European Union, but today this process seems long and difficult.

After the country candidacy in 1999 and the start of negotiations in 2005, different aspects have been discussed and concluded with positive results, indicating that Turkey is meeting the requirements demanded by the EU. Despite the plan implemented by the European Commission in 2012 to accelerate Turkey’s access to the EU, there are still some unresolved matters, which are not only slowing down, but also impeding the process and threatening the delicate and unstable balance achieved.

In May 4, 2016, the European Commission press release stated that the European Union is in favor of adopting measures regarding the request of Turkey about exempting its citizens from the need of a visa. However, this will be possible only if Turkey respects the conditions expressed by the Union in matter of corruption, anti-terrorism, collaboration with the judiciary institutions of the member states, partnership with the Europol and data protection.

Current Turkish reluctance to review the anti-terrorism law has created tensions that are hindering the relation between Turkey and the EU and frustrating their initially good purposes.
Moreover, such a stall has further worsened due to the recent events that occurred in Turkey after the attempt of coup d’état in July. The repressions ordered by Turkish authorities to impede the coup saw forced detentions and the possible breach of the European Convention on Human Rights, along with the threat of reintroducing death penalty. This has worried the EU, and led it to harshly condemn the measures adopted, because considered a violation of the rule of law.

In August the Austrian Chancellor Christian Kern said to be in favor of interrupting the negotiations for the Turkish membership to the EU. However, the stakes are high because of the immigration issue.

In fact, Turkey is involved in the reception of Syrian refugees in its territory and it’s discussing an agreement to contain the wave of illegal immigrants coming from Turkey who are stuck in Greek islands, which allowed the country to get a fund of six billion euros from the EU.

In an interview the Commissioner for Home Affairs Dimitris Avramopoulos has reminded the importance of the agreement, which has already achieved excellent results in terms of decreasing the migration flow to Europe. This is the reason why the EU wanted to confirm its willingness to maintain and enhance the relations between the two, and it did it with a visit in Turkey by the High Representative of the EU for Foreign Affairs and Security Policy Federica Mogherini, on September 9. Also the President of the European Commission Jean-Claude Junker has called the possible interruption of the relations with Turkey as a “serious foreign policy mistake”.

So, the difficult cooperation between Turkey and the European Union is still on thin ice.

Sources:

- www.europarl.eu
- it.euronews.com
- www.lapresse.it
- www.repubblica.it

Globalisation

Europe and Globalisation

Globalizzazione ed Europa

Author : Matteo Aristei

May 2019

Globalisation is the phenomenon caused by the intensification of international trades and investments on a global scale. In the last years this phenomenon has ever more increased and led to an ever more higher interdependence of national economies as well as social, cultural, political and technological interdependence. Negative and positive effects of Globalisation have a world relevance in terms of trade, cultures, traditions, thoughts and cultural heritage.

Since it is a group of phenomena which represent very different aspects, the economical Globalisation is: an intensification of trades together with the removal of trade barriers; an exponential growth of financial flows within the markets that are ever more connected; an increase of the number and influence of transnational economical groups; a spread of new technologies, in particular in the information field, with a new economical model (new economy); new collective problems such as world poverty, the underdevelopment, environmental risks and the situation of sustainable development.

Globalisation can bring wealth and jobs, but it has negative aspects as well. The EU has always tried to reduce its negative aspects through rules and cooperation with other countries.

The European Union has the most important role in terms of global market and uses its influence not only to impose standards to imports but also to foster European ideals abroad. Members of European Parliament promote measures to fight unfair competition from abroad, like for example when they requested a European strategy after an increase in the provision of rail imports at low price. In order to protect this, the EU Parliament is strongly working in favour of agreements in short time about the modernisation of trade defence instruments. They need to find the right balance, like in the case of China.

Members of European Parliament are also aware of how much the Globalisation affects jobs: for example they support initiatives to enforce workers rights. The Parliament is working on the people protection in new forms of employment created by the digital economy. Moreover, the Parliament supports the European Globalisation Adjustment Fund which helps fired workers to find new jobs.

In order to prevent the fact that the trade of minerals finances wars or human rights violation, Members of European Parliament have adopted a draft regulation which impose a control of providers in almost every European imports of tin, tungsten, tantalum and gold. Furthermore, big producers will have to demonstrate how they want to verify that they providers respect the rules.

The European Commission will release five discussion papers in order to start a debate on the European integration. Every paper has a specific issue: the social dimension of Europe, globalisation, the economical and monetary union, defence and finance. These papers contain ideas and scenarios on how Europe could be in 2050. The initiative will end in September with the annual speech on the Union’s status by the President Jean-Claude Juncker.

The relationship between globalisation and integration is not unidirectional, In fact, the Union has means to influence world processes in favour of the affirmation of that rules system. Therefore, the Union is able to protect concepts such as economical ,social and environmental responsibilities on a global scale: they are the main concepts of its ‘Social Model’.

Globalizzazione in EU

ARTICLE SOURCES

https://en.wikipedia.org/wiki/Globalization

http://www.europarl.europa.eu/news/en/headlines/priorities/globalisation/20170505STO73507/globalisation-how-the-european-parliament-is-making-it-work

https://www.italianieuropei.it/en/la-rivista/item/551-l-unione-europea-come-risposta-alla-globalizzazione/551-l-unione-europea-come-risposta-alla-globalizzazione.html

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Belt and Road Initiative

BELT AND ROAD INITIATIVE

Author : Matteo Aristei

Translated by : Matteo Aristei

January 2019

In these months, the “ Belt and Road Initiative ” ( in Italy is also called “ Nuova Via della Seta ) is now being very discussed . The Italian name comes from the golden age of the trades between Asia and Europe. It is a project created by China, in order to expand, improve and develop connection and cooperation in Eurasia . The Belt and Road Initiative is an inclusive project because it wants to help the poor countries in Chinese and European territories, with the development made by investment on export . The countries in this initiative are quite a lot, from China until Spain by land from Southern Asia until the Mediterranean by sea, going through the Suez Canal .
Of course Italy has a very important vantage point because it offers the last Mediterranean port that permits the transit of goods toward Northern Europe . For this initiative, several billions yuan have been allocated by the Chinese government .

Nuova via della seta - Belt and road initiative

This project aims to create infrastructures that will link all the countries in question, allowing in this way a trade increase and a economic expansion . The initiative was announced in 2013 and it has gradually been taken into account, not only by the Chinese government but also by other countries .

In 2017, in Beijing, an assembly has been held : the “ Belt and Road Forum ”, with the greater international leaders . The Chinese government wants to reconnect over 70 countries with the aim of creating a global economic cooperation focused on peace . China wants more cooperation with more countries, since the purposes are very high and for this it needs enormous investment . Mainly, China is not able to carry all the costs of an infrastructural network of a global size by itself, therefore invites the rest of the world to contribute to the creation of this ambitious plan .

The Chinese government is creating maps for routes which will be done by means of goods transport and there is a clear distinction between the design of the above – ground section and the maritime one . As to “ above – ground section ” we refer to all the road and highway connection, rail and bridges that will be trade routes and meeting – tracts between countries ; talking about the transport by sea, China highlights the importance that some ports will have for this project .

China is about to play once again a very important role for the global economy and with this initiative, it aims to develop and strengthen the welfare of its own population, contributing with the increase the GDP and the other countries’ economy as well . Unfortunately there are obstacles and also disadvantages for other countries, though : the Chinese plan wants to change international balance and for this, the United States will not benefit the advantages of the project . Therefore, America has already started to create a policy against the China ’s plan, and also India is on its side because it fears the hegemonic purposes of Beijing . The European Union focuses on legal issues : EU countries fear that China could dominate infrastructural procurement , stopping the free concurrence, asking Beijing for more transparency .

In the west, the Belt and Road Initiative has been defined in various ways : a new Marshall Plan, a geopolitical strategy with a peace and shared – prosperity purpose but this project is also seen as a colonialist strategy created by China . Moreover, China is designing ‘ Made in China 2025 ’: another plan of renewal that is close to the Belt and Road Initiative . The aim is to transform the Chinese production system into a world factory for cheap products and into a production centre and a high value – added goods sorting .

For Italy, the Belt and Road Initiative could bring enormous advantages . The maritime gates in the project are Trieste – Venice in the Adriatic and Genoa – Savona in the Tyrrhenian Sea . In order to realise the project, there is still a long way to go ; Trieste needs to go on with the enlargement of the container gate and to double it, while Venice is looking for a space for another project created by the Chinese – Italian consortium, but the government did not approved yet . In Genoa, whose port identity has been unified with the Savona one, it will be necessary to create a new dam away from the current one. When all these plans and these works for the infrastructures’ construction will end , the international traffic impact on the Italian economy should make a qualitative leap and the Chinese initiative could bring several job and it could increase the Italian GDP .

ARTICLE SOURCES :

http://www.occhidellaguerra.it/che-cose-la-nuova-via-della-seta/
https://www.panorama.it/economia/nuova-via-della-seta-ecco-cosa-sta-ottenendo-la-cina/
https://www.panorama.it/economia/la-nuova-via-della-seta-e-lincognita-dei-porti-italiani/
Xinhua

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Schengen

SCHENGEN AGREEMENT : WHAT’S NEW

Author : Matteo Aristei
Translated by : Matteo Aristei

Recently, the Schengen information system has been strengthened and there has been talked about an enlargement of the zone without frontiers .

The Schengen Agreement ( 14 July 1985 ) is an agreement signed by Belgium, France, Germany, Luxembourg and Netherlands with the aim of removing controls in the internal frontiers and introducing the freedom of movement for the citizens of the signatory countries, other EU countries and some other countries . Now, the Schengen space has 22 of 28 European countries . These countries are Belgium, Czech Republic, Denmark, Germany, Estonia, Greece, Spain, France, Italy, Latvia, Lithuania, Luxembourg, Hungary, Malta, Netherlands, Austria, Poland, Portugal, Slovene, Slovakia, Finland and Sweden plus other countries which are not part of EU : Island, Liechtenstein, Norway and Switzerland. Bulgaria, Cyprus, Croatia and Romany the agreement is not in force yet and Ireland and UK have not joined the convention, exercising the exclusion clause ( out-put ).

Schengen zone’s rules are : countries have to be responsible for controlling external frontiers of EU ; have to apply the Schengen’s common rules, like the control on the airspace, land and maritime and release visa according to a consistent scheme ; in order to ensure a high level of security in the Schenge area there has to be cooperation between police and frontiers of the various country through the system of Schengen ’s information exchange system .

Schengen

The Schengen space, is one of the most concrete progress of EU, it is a free movement zone where frontiers controls have been abolished for all the travellers, except special circumstances. Every year, 1.25 billions trips are made inside the Schengen area . Moreover, the Schengen membership implies a cooperation with all the members in order to fight organised crime and terrorism .

Wednesday 24th October 2018, new rules have been approved . These rules improve the management of the external borders and they protect the international security of 30 European countries .
The Schengen information system was strengthened in order to give more security to European citizens .
The SIS was established in 1990 after the abolition of frontiers controls in the Schengen space . The current form ( known as “SIS II”) has been adopted in 2006 and it has become operational in 2013 . There will be stronger rules for the data protection, and the supervision of the Data Commissioner .

One of the advantage of European Union is the freedom of movement that means to live, to study, to work and to retire everywhere in the Eu . Recently there has been talked about an enlargement of the Schengen zone : the European Parliament asked many times for the admission of Romany and Bulgaria ; the process of entering of Croatia is going on .

Unfortunately, from 2015 after the migratory crisis and the intensification of terroristic threads, some countries have decided to re – introduce frontiers controls . In some cases, controls have been extended to 30 th April 2018 in France, to 12 th May in Austria, Denmark, Germany, Sweden and Norway . These measures are temporary and special, but after 2 years a normal functioning of the system has not been restored . Frontiers controls obstacle the free movement of people, goods and services in the whole Europe . Controls have a negative impact on the goods transport sector, on tourism and on workers : in fact 1.7 billions European workers cross the frontier to go to work . The maintenance of controls entails administrative costs also related to infrastructures for the public sector . If the Schengen Agreement collapses, the economy will be badly affected .

The Schengen Agreement is an actual advantage for millions European people, and its collapse, could bring not only damages to economy but also to citizens and they will not feel part of the EU and this will lead to a malaise .

ARTICLE SOURCES

http://www.europarl.europa.eu/news/en/headlines/security/20181011STO15882/security-improving-the-schengen-information-system

https://www.internazionale.it/notizie/2015/09/15/come-funziona-lo-spazio-schengen-mappa

https://eur-lex.europa.eu/summary/glossary/schengen_agreement.html?locale=en

http://www.europarl.europa.eu/factsheets/it/sheet/152/politica-d-immigrazione

EU Singapore

EU SINGAPORE

GREEN LIGHT TO TRADE AGREEMENTS BETWEEN EUROPEAN UNION AND SINGAPORE

Author : Matteo Aristei
Translated by : Matteo Aristei

EU Singapore

Almost every custom duty will be abolished and workers rights will be protected . There will be also a better environmental protection . The approval was aimed to a greater economic development . There was talk about such agreement for 10 years .

Singapore is one of the City – State in the centre of the most dynamic and developing areas in the world and is one of the main destination for European investments in Asia ; it is also the third greater Asian investor in Europe ( after China and Japan ). Over 10 thousand European companies have a quarters in Singapore because they use it as a support base to enter the Indian, Chinese and Japanese markets . Singapore is the fourteenth trade partner of Europe and is the most important in the region : it is between the first 20 trade partners of Europe in exchange of goods, between the first 5 in exchange of services and between the first 10 in direct investments . The bilateral trade between EU and Singapore is already over 52 millions Euros ( of which 2.1 millions are from Italian export ), while exchanges of services are almost 50 billions .

EU Singapore agreement

EU and Singapore began their trade and investment negotiations in 2010 and in 13 th February 2019 in Strasbourg, the majority of the European Parliament approved the agreements of free trade and investments protection between Singapore and European Union . These new agreements are an other example of cooperation between Europe and Asia . Such agreements will abolish all the custom tariffs within 5 years and there will be free trade of services in many sectors . The agreements includes also the enforcement of workers rights and environmental protection, which is a very important issue for the Parliament . Moreover, Singapore will accept European quality standards on food products, electronic devices and safety of cars . Finally, members of the Parliament supported a partnership and cooperation agreement, in order to extend the cooperation over the trade, for example in terms of fighting terrorism or climate change . The partnership and cooperation agreement was approved with 537 positive votes, 85 negative and 50 neutral .

Furthermore, this agreement will protect 190 European geographical indications , 25 % of which are Italian . Between the labels protected in the food sector there are : Balsamic Vinegar of Modena, Buffalo Mozzarella of Campania, tomato of Pachino, Red Orange of Sicily, Grana Padano, Mortadella of Bologna, Pecorino Romano, Gorgonzola, Lentils of Castelluccio di Norcia and Prosciutto di Parma and Prosciutto di San Daniele . In the sector of drinks there are Grappa, Montepulciano d’ Abruzzo, Prosecco and Chianti, only to name just a few .

Because it is the first bilateral trade agreement between EU and a Member State of the ASEAN, this agreement is a springboard for further free trade agreements between this two regions . Once it is concluded, this trade agreement can enter into force the first day of the second month after the conclusion . As to the agreement on the investments protection and the one on the partnership and cooperation, Member States have to ratify them for the entry into force .

The Speaker of free trade and investments protection agreements, David Martin ( S&D, UK ) said “ The Parliament has demonstrated its own commitment in favour of a regulated trade system . The European Union keeps alive a free and fair trade .”

EU agreement with Singapore

ARTICLE SOURCES

https://www.europarl.europa.eu/news/en/press-room/20190207IPR25207/ep-gives-green-light-to-eu-singapore-trade-and-investment-protection-deals
http://www.europeanaffairs.it/eng/
https://agensir.it/quotidiano/2019/2/13/parlamento-ue-via-libera-ad-accordi-commerciali-con-singapore-martin-sviluppo-economico-e-protezione-di-lavoratori-e-ambiente/
https://www.ilpost.it/2019/02/13/approvato-accordo-unione-europea-singapore/

EU JAPAN

EU JAPAN – Economic partnership agreement

EU JAPAN economic partnership agreement

Author : Lorenzo Giusepponi

Translated by : Matteo Aristei

January 2018

Japan and Europe will be closer and there will be greater opportunities for the companies of both countries about their respective export markets . On the 7th December, the president of EU Commission Jean -Claude Juncker and the Japanese premier Shinzo Abe have announced the negotiation ‘ s finalisation for a free trade agreement that has begun in 2013, and it will cover the 30 % of the world GDP and a block of 600 million people, underlining the common willingness to send to the entire world a strong message in favour of free trade and against protectionism . Now a complex procedure for the official signature will be opened, it is expected for the next summer and it concerns the debate of the remaining technical questions until the achieving of a final text . Then, the agreement has to be approved by both European Parliament and parliaments of each Member States . Both parts foresee that the agreement will enter into force at the beginning of 2019 .

General framework

The EU companies export already to japan goods for over 58 billions euros and services for 28 billions . Furthermore, Japan is the fourth biggest market for the agricultural exportation of EU, and they are worth 20 times higher than the Japanese exportation in the Union . However, European companies are facing obstacles in trade when they export in Japan .
With the EU JAPAN Economic Partnership Agreement, farming communities and producers of food and drink will access easier to the Japanese market, with higher possibilities to sell their products to 127 millions Japanese consumer .

Food sector

Japanese consumer appreciate high quality european products such as wine, cheese, chocolate, pigmeat and pasta, but Japan requires high customs duties on these products and other european food and drink : 30 – 40 % on cheese, 38,5 % on pigmeat, 15 % on wine, until the 24 % on pasta and 30 % on chocolate . Thanks to this agreement, Japan will remove customs duties more than the 90 % of agricultural exportation of EU from the first day and will acknowledge 205 geographical indications that are chosen by Member States for their real and potential exportation value in the Japanese market . As a result, only products with such status can be sold in Japan . This will make illegal to sell imitation products and will ensure to japanese consumers that they are buying a real european product .

Food security

Japanese rules on food security, as well as the european ones, are between the most demanding in the world . For example, Japan doesn’t allow the use of growth hormone in the production of bovine meat, and the legislation that regulates GMO is very important for japan consumers . Like for other Union ’ s economic agreements, the EU JAPAN agreement won’t certainly prejudice the european level of protection in matter such as food security . All the imports of products of animal origin in the EU from Japan will continue , in addition to they must be accompanied by a veterinary certificate, as is the case today .

Exportation

Japan is the fourth leading economy in the world and is the second biggest trade partner of EU in Asian after China . However for Europe, Japan is only the seventh exportation market. Experts foresee that the facilities of exportation in Japan will lead to benefits for EU companies which produce and trade agri – food products as well as electrical machinery, pharmaceutical products, medical devices, means of transport, textile products and clothing . In fact, european exportation of transformed food in Japan could increase of 180 %, that is equal to an increasing of sales until 10 billions of euro . In addition, since Japan has accepted to adapt rules related to car to the international rules used by EU, for car manufacturers in EU will be easier sell their vehicles in Japan . Furthermore, since that every billion euro of exportation from Eu to japan corresponds to 14.000 job in Europe, the more Europe exports, the more it will be possible create and protect employments .

Contracts

It is estimated that a developed economy like the EU one or the Japan one, the purchase of goods and services from the State represent over the 15 % of the total economy . It is a big market, full of trade opportunities . Thanks to the EU JAPAN agreement, EU will obtain a better access to japanese calls of tender in terms of central,regional and local administration . One of the EU’s priority in negotiations was to ensure a higher access to the japanese market of rail infrastructure . Japan has partly accepted and has decided to open contracts to EU tenderers for hospitals, academic institutions and energy distribution as well as grant to EU suppliers a not discriminatory access to the contracts market of 48 cities of about 300.000 people which represent the 15% of the country’s population . For its part, EU has partially accepted to open its market of rail plants for public transport in the city and has granted to Japan a better access to contracts which are organised by municipality .

Environmental protection

EU undertakes to ensure that its trade policy favours sustainable development .
The EU JAPAN economic partnership agreement is no exception . Moreover, EU and Japan undertake to : protect and handle natural resources in a sustainable way, address biodiversity problems ( also fighting illegal logging ) and practice a sustainable fishing .

Article sources for EU JAPAN :

- ec.europa.eu
- www.ilsole24ore.com
- video

Antidumping

Antidumping EU

Antidumping European Union EU

Antidumping : how the European Union faces this situation

Author : Matteo Aristei
May 2019

What is dumping ?

Dumping is a practice used by big companies . They put in the European market very low – priced products compared to the market ’s price. Dumping is an unfair competition because products are sold with a price that doesn’t reflect correctly the production costs . For European companies is very tough to remain competitive with these conditions and it would be worst if they have to fire their workers or even close their business .

For this reason Europe has developed different trade defence instruments and the community legislation has :

Antidumping measures in terms of imports made in the community market from companies of third countries which sell with low prices compared to the original price ( dumping imports ); anti – subsidy measures in terms of imports which use state helps and subsidy given by governments to its companies ; Safeguards, will be activated in case of serious damage to community companies from market ’s distortions, such as those caused by abnormal surges in imports .

The EU believes in free trade which brings jobs and wealth . The unfair behaviour of some countries can affect free trade ’s systems through overproduction or the introduction of subsidy products sold at low prices compared to the market ’s ones . The EU has to adopt measures to fight subsidies or antidumping . The EU could impose sanctions to non – EU countries if they are responsible of unfair trade practice in the European market and the sanction works as duties or tariffs for dumping products .

The European Union has to work according to the rules of the World Trade Organization . The WTO is an international organization made by 164 members which regulates trade at global level and defines the reference framework for the negotiation of trade agreements and it has its own rules for the solving of controversy . Members of WTO have decided to follow their procedures in order to simplify problems . These rules include also a procedure which indicates how to do when other countries introduce in their own market , dumping products with very low prices .

China is the main objective of antidumping duties in Europe . In October 2016 duties were imposed in more than 50 Chinese products, products like aluminium, bicycles, cement , chemical substances, glass, solar panels, pottery, paper, steel . In the European Union this practice is not very famous, but Europe has protection and precaution measures .

In November 2017 of European Union deputies have opted for stricter rules in order to fight the unfair competition, including social and environment dumping and monitor ths situation in other countries . This last task will be made by the European Commission which will create relationships for European companies in case they want to appeal .

In May 2018 members of European Parliament have approved additional rules in order to allow EU to impose higher tariffs on dumping or subsidy imports .

These rules will allow to reduce times of antidumping investigations, to institute a desk for little or mid companies in order to handle investigations and procedures involving syndicates . These new rules include the fact that all the products which arrive in the EU market must be strictly controlled and recorded when an investigation starts . These rules will be expanded to exclusive economic areas, i.e. maritime areas on which a state exerts its right to use, mainly used for the energy production .

Both proposals will enter into force after the approval of the Council and the publication in EU official Journal .

Antidumping EU

ARTICLE SOURCES :

http://www.europarl.europa.eu/news/en/headlines/priorities/globalisation/20180621STO06336/dumping-explained-definition-and-effects

https://www.mise.gov.it/index.php/it/component/content/article?id=2019751:misure-di-difesa-commerciale

https://europa.eu/euprotects/our-society/european-mosaic-how-eu-trade-investigators-protected-jobs-against-unfair-competition_it

Paris agreement

Paris agreement

Accordo di Parigi sui cambiamenti climatici

“ Paris agreement : the fate of climate change ”

Author : Giulia Turchetti
Translated by : Matteo Aristei
December 2017

In the twenty-first Paris climate conference ( COP21 ) on December 2015, as many as 195 countries have ratified the first worldwide agreement and it is binding in legal terms of “ Paris agreement ” climate .

“ Paris agreement ” means a global agreement on climate changes, with the aim of creating an action plan in order to limit global warming below 2 ° C . The conclusion of this agreement comes from the need to find a remedy for climate change : an important global issue with possible repercussions for everyone . Due to the small participation on the Kyoto Protocol and due to the lack of an agreement in Copenhagen in 2009, European Union contributed with the realization of a large coalition of developed and developing Countries in order to achieve prestigious purposes . This determined clearly the positive outcome of the Paris conference .

The governments of the signatory countries have therefore decided to meet every five years in order to determine more ambitious purposes on the basis of scientific knowledge, to inform the other Member States and the public opinion about what they are doing in order to achieve their fixed purposes, and to report the progress made through a system based on transparency and responsibility .

In Germany, Bonn as well, was held on last November the United Nations World Conference on Climate, or simpler known as Cop 23 : this is the summit of commitments given at the Cop21 in Paris and they have to keep them as civic commitment in the future . This is a commitment that is urgently needed : scientist, in fact, talk about how World is in its warmest period in the history of human civilization and that the main cause of this phenomenon is the man itself .

Unfortunately, the time remaining is little and it is essential to take the steps of a fast and ambitious climatic revolution, realizing the vision of Paris, making it real .

The main purpose of the Paris Agreement is to hold global warming effects, limiting harmful consequences that come from climatic change created by the man, as from 2020 . In this respect, industrialized countries will contribute to the allocation of an annual fund “ Green Climate Fund ” of 100 billion for the transfer of clean technologies in the Countries that need a support in order to start their own green economy .

Despite United States are the main promoter of this important aim, because they are classifiable between the major polluters and they are responsible of the climatic change, today they could fleeing the scene . With a new administration, led by Donald Trump, United States withdraw in their isolationism because the president itself has repeatedly said that the Paris agreement would be an unbalanced agreement, which undermines American’s interest and it constitutes an obstacle to the realization of making “ America great again ”. Together with this withdrawal, there is also the disappearance of an entire section on the climate change from the site of the White House, and it was replaced by an another section on an energetic plan for America . The intention of Trump is to eliminate policies like the “ Climate Action Plan ”, because in Trump’s opinion they are harmful and useless . The “ Climate Action Plan ” is the plan for the emission reduction and it was signed by his predecessor Obama .

However, it’s not possible to exit in a unilateral and linear way from the Paris agreement . In fact, it contains room of three years, four in all. When this period will be spent, the end of the Trump’s mandate will come . The position of United States about climatic change could therefore be negotiated another time and it won’t be definitive, also because the hypothetical destruction of the Paris agreement means the destruction of the world itself .

SOURCES ” PARIS AGREEMENT “:

Europa.eu
Nazioni Unite
Wikipedia

PARIS AGREEMENT ORIGINAL :

Accordo di Parigi English Version

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