UK-Turkey Free Trade Agreement: Beyond the Economics

Introduction

On December 29, 2020, the UK and Turkey signed a Free Trade Agreement (FTA) which will become effective January 1, 2021, after the UK leaves the EU. Turkey’s Trade Minister, Rushkar Pekcan, and the British Ambassador to Turkey, Dominick Chilcott, signed the agreement. 

The timing of the agreement was interesting, since the FTA was signed days after the UK and EU had managed to clinch a Brexit trade deal, with great difficulty, and after the US imposition of sanctions on Turkey for the purchase of S400 missiles from Russia (the decision to impose sanctions is likely to have its impact not just on Turkey-US ties, but also between Turkey and other NATO member states).

Commenting on the importance of the deal, Pekcan said:

The free trade agreement is a new and special milestone in the relationship between Turkey and United Kingdom.

President Recep Erdogan, while referring to the significance of the FTA a day before it was signed, had said that it would create a win-win situation for both Turkey and the UK. He also said that the deal is crucial, and dubbed it as Turkey’s most important economic agreement after the 1995 Customs Union.

Economic importance of the FTA 

If one were to look at the economic significance of the deal, it is dubbed to be the fifth largest trade deal for Britain. The UK-Turkey FTA is also likely to give a significant boost to the bilateral trade between both countries. The UK is Turkey’s second largest export market (for commodities including vehicles, textiles, and electrical equipment). The agreement is also important from Turkey’s point of view because without a deal well over 75% of Turkey’s exports to the UK would have been subject to tariffs. The FTA will also ensure existing preferential tariffs for 7,600 British businesses that exported goods to Turkey in 2019.

According to estimates, the potential for bilateral trade between Turkey and Britain is up to $20 billion. Britain is Turkey’s fifth largest investor (investment is estimated at $11.6 billion) and a total of 2,500 British companies are based in Turkey. 

UK Trade Secretary Elizabeth Truss, while commenting on the deal, said ‘[…it] provide[s] certainty for thousands of jobs across the UK in the manufacturing, automotive, and steel industries.’

While the key features of the deal are known (it seeks to prevent supply chains in automotive and manufacturing sectors, and also covers all agricultural and industrial goods), the FTA could also give a fillip to deeper defense cooperation between the UK and Turkey (in November 2020, Turkey and the UK held defence exercises for the first time).

Geopolitical context

The FTA also has geopolitical significance, because the UK is one of the few Western countries with which Turkey has a cordial relationship. While all eyes have been on the imposition of US sanctions, and its impact on the Washington-Istanbul relationship, Turkey’s ties with the EU have also witnessed a steady deterioration due to a multitude of factors in recent years. Turkey has also not been on the same page as the Western world on a number of geopolitical issues. This includes the Syria issue, as well as the dispute between Azerbaijan and Armenia over Nagorno-Karabakh.

Turkey’s military operation in Syria and reactions

Turkey’s military offensive against Kurdish forces in Northern Syria in 2019 received strong responses from EU member states and the US. While the EU was critical of the action, US policy makers had urged Donald Trump to freeze assets belonging to Turkish leaders and block the sale of arms to Istanbul. Trump had written to Erdogan to refrain from such an action, but the Turkish President paid no heed to the same. It would be pertinent to point out that after Turkey’s October 2019 invasion of Syria, Britain had stopped sales of arms, but said it would not be providing new export licences for weapons which may be used in military operations in Syria.

If one were to look at the Azerbaijan-Armenia issue, France has been vocal in supporting international supervision of the ceasefire and has also expressed apprehension that Turkey and Russia may exclude Western countries. 

The EU has also been uncomfortable with Turkey’s policy in the Mediteranean. Only recently, the EU imposed sanctions against Turkish companies and individuals for oil drilling. Greece had wanted sectoral sanctions but this was resisted by German Chancellor Angela Merkel and Bulgarian Prime Minister Boyko Borissov, who shares a close rapport with Erdogan.

Russia-Turkey relationship

While it is believed that the main reason for the rift between Turkey and the West is the former’s growing proximity to Russia, Istanbul and Moscow too have divergences over geopolitical issues (be it Syria, Libya, or Azerbaijan). Only recently, the presence of the Turkish President at Azerbaijan’s military parade on December 10, 2020, to mark Azerbaijan’s victory over Russian ally Armenia with Turkish assistance, would not have gone down well with Moscow. Yet in public, Russia has refrained from criticizing Turkey. In an interaction with the media in December 2018, Russian President Vladimir Putin stated that sometimes Russian and Turkish interests do not ‘coincide,’ yet he also praised Turkey for pursuing an ‘independent foreign policy’ in spite of being a member of NATO and honoring its commitments. 

He has also stated that Moscow needs to be ‘patient’ and adopt a more compromising stance vis-à-vis Turkey. 

Erdogan does realize that he cannot afford a sudden deterioration of ties with the US, and his reconciliatory statements vis-à-vis Israel, and the Turkish decision to appoint an envoy after more than two and a half years, is being viewed as a step towards mending ties with the incoming Biden Administration.

Conclusion 

The Britain-Turkey FTA is important not just for economics but also for geopolitical reasons. While Britain will deal with the realities of a post-Brexit world, and such FTA’s will be important in navigating the same, for Turkey the deal is important in the context of the geopolitics of the Middle East and beyond.

Nightcap

  1. Mormonism and the culture war McKay Coppins, Atlantic
  2. Europe outspends Russia on defense Barry Posen, Survival
  3. The onion bomb and Hindu nationalism Rohit Inani, Newlines
  4. The revolt of the baristas Jacques Delacroix, NOL

Nightcap

  1. A sovereignty full of holes Daniel Treisman, LARB
  2. NATO’s new role in the Pacific Shannon Tiezzi, Diplomat
  3. In memory of Ruth Klüger Jonathon Catlin, JHIBlog
  4. Rules for honest conversation Andrew J Cohen, RCL

Nightcap

  1. On cancel culture Irfan Khawaja, Policy of Truth
  2. Why I lean libertarian Arnold Kling, askblog
  3. Colonialism and economic development Lipton Matthews, Mises Wire
  4. Speculation about Greece and Turkey Koert Debeuf, EUObserver

Nightcap

  1. Trump and the liberal international order (pdf) Doug Stokes, IA
  2. Goodbye — sort of — to Germany? Victor Davis Hanson, National Review
  3. The failure of global liberal hegemony David Gordon, The Austrian
  4. Liberty displaced Daniel McCarthy, Modern Age

Nightcap

  1. A great primer on Derrida’s “deconstruction” David Gunkel, MIT Press Review
  2. Is feudalism going to make a comeback? Adam Wakeling, Quillette
  3. Yet another reason why libertarians should embrace federation as a foreign policy War on the Rocks
  4. Hunter-gatherers in outer space Nick Nielsen, The View from Oregon

Nightcap

  1. Collecting the dreams of imperial subjects Erik Linstrum, Aeon
  2. On NATO’s open door policy Emma Ashford, War on the Rocks
  3. Stalin’s Danish mystery Caroline Kennedy-Pipe, History Today
  4. Taleb’s distinction between “complicated” and “complex” Mark Cancellieri, askblog (comments)

Nightcap

  1. Giving the Devil his due (in praise of Trump) Irfan Khawaja, Policy of Truth
  2. Turkey (a NATO ally) launches Syrian offensive Amberin Zaman, Al-Monitor
  3. The case for Amy Klobuchar in 2020 David Leonhardt, New York Times
  4. The only gaijin in the village Kris Kosaka, Japan Times

Nightcap

  1. In defense of Democratic war socialism Irfan Khawaja, Policy of Truth
  2. China brought NATO closer together Ringsmose & Rynning, WOTR
  3. In praise of trade frictions Chris Dillow, Stumbling & Mumbling
  4. “We are in Soviet times again” Tara Burton, City Journal

Nightcap

  1. Qassem Soleimani and deterrence Michael Koplow, Ottomans & Zionists
  2. A grim history of civilian planes shot down Ron DePasquale, NYT
  3. NATO expansion into the Middle East? Caitlin Oprysko, Politico
  4. Imperialism in medieval Java (sea power?) WJ Sastrawan, New Mandala

Entangling alliances, Donald Trump, and a new libertarian alternative

Some say that Donald Trump’s transactionalism in the realm of geopolitics has gotten out of hand. Tridivesh has actually been saying this for awhile now. Jacques is not pleased with the president’s decision to withdraw American troops from Syria. Of the other Notewriters, only Andre has spoken up for Trump’s withdrawal from Syria.

There are libertarians and leftists who have applauded Trump’s move, but for the most part people are dissatisfied with the way the president of the United States conducts foreign policy. There’s no logic. There’s no strategy. And the incentives don’t quite line up, either: is Trump out for the republic or himself?

This is unfair. Trump’s transactionalism comes with more press, but Obama and the guy before him were transactionalist presidents, too. Just think about Syria to begin with. Getting involved in the butchery there had no logic to it and actually went against the strategy of Obama’s “Pivot to Asia.” Still, Obama mired the republic in another brutal regional scuffle. GWB did the same thing in Iraq, too. Osama bin Laden was hiding out in Afghanistan, so Bush invaded Iraq, a country that had nothing to do with 9/11. Makes sense, right?

Maybe we’re looking at this all wrong. Maybe we should be looking at the incentives and trade-offs available to the executive branch of the American government instead of single individuals.

My contribution to reassessing American foreign policy is to look at the role that formal alliances play in chaining down the executive branch in the American system. Libertarians loathe both alliances and the executive branch, but what if one is useful for off-setting the other? Which one would you rather have? (Trade-offs are more realistic than utopias, my fellow libertarians.)

There are two general types of alliances in the world: formal and informal. Alliances have been with us since the dawn of time, too. Think of the alliances our Stone Age ancestors made, one individual at a time. Elected politicians make alliances and call them political parties. Dictators make alliances and call them bargains. You get the picture. The United States has traditionally made use of informal alliances, so Trump’s abandonment of the Kurds in Syria is really a continuation of American foreign policy and not an aberration as some hawks claim.

In fact, prior to World War II, the United States had signed just one official alliance with another polity: the Treaty of Alliance with France that lasted from 1778-80. So from the start of the Revolutionary War (which was really a secession from the British Empire rather than an actual revolution) in 1776 to America’s entrance into World War II in late 1941, the United States had joined only one alliance, and it was a short-lived alliance that would make or break the existence of the republic. (During World War I, the United States was an “affiliated partner” rather than an official ally.)

This doesn’t mean that the United States was isolationist, or non-interventionist, during this time frame. In fact, it highlights well the fact that the United States has a long history of entering into alliances of convenience, and a short history of building and then leading stable coalitions of military partners around the world. Alliances have shaped the destiny of the republic since its founding. And, more importantly, these alliances of convenience have their intellectual roots in George Washington’s foreign policy. Washington’s foreign policy even has its own name: the Washington Doctrine of Unstable Alliances. According to Washington and other elites of the founding era, the United States should freely enter into, and exit, alliances as necessary (Jefferson was a big fan of this Doctrine, too). This stands in stark contrast to the idea that the United States only soiled its virginal unilateralism once, when it was in dire peril and needed a helping hand from France to fend off an evil empire.

Washingtonian alliances throughout American history

Aside from fighting alongside the Oneida and Tuscarora during its secession from the British Empire, the United States forged alliances with Sweden, in 1801 to fight the Barbary states, and with the Choctaw, Cherokee, and some of the Creek during the ill-fated War of 1812. In fact, one of the reasons the United States got pummeled in the War of 1812 was the lack of Native allies relative to the British, who had secured alliances with at least 10 Native American polities.

The American push westward saw a plethora of shifting alliances with Native peoples, all of which tilted in eventual favor of the United States (and to the detriment of their allies).

The American foray into imperialism in the late 19th century saw alliances with several factions in Cuba and the Philippines that were more interested in extirpating Spain than thinking through an alliance with an expansion-minded United States.

In 1832 the United States entered into a Washingtonian alliance with the Dutch in order to crush some Barbary-esque states along the Sumatran coast. The alliance led to the eventual, brutal conquest of Aceh by the Dutch and a long-lasting mutual friendship between the Americans and the Dutch.

From 1886-94 the United States and its ally in the South Pacific, the Mata’afa clan of Samoa, fought Germany and its Samoan allies for control over the Samoan islands. The Boxer Rebellion in China saw the United States ally with six European states (including Austria-Hungary) and Japan, and affiliate with three more European states and several Qing dynasty governors who refused to follow their emperor’s orders.

NATO’s continued importance

Clearly, the United States has followed its first president’s foreign policy doctrine for centuries. Washington warned that his doctrine was not to be an eternal guideline, though. Indeed, the most-cited case study of the Washington Doctrine of Unstable Alliances is not the American experience in the 19th century, but the Nazi-Soviet one of the 20th, when the Germans turned on the Soviets as soon as it became expedient to do so.

The establishment of NATO has forced the United States to become reciprocal in its alliances with other countries. The republic can no longer take, take, and take some more without giving something in return. This situation of mutually beneficial exchange has tempered not only the United States but everybody else in the world, too (especially in the industrialized part of the world; the part with the deadliest weapons). Free riding will most likely continue to be a problem within NATO. The United States will continue to pay more than its share to keep the alliance afloat. And that’s perfectly okay considering most of the alternatives: imperialism (far more expensive than free riding allies), ethnic cleansing, or oscillating blocs of states looking out for their own interests in a power vacuum, like the situation Europe found itself in during the bloody 20th century.

The forgotten alternative

Unstable alliances lead to an unstable world. The rise of NATO has been a boon to the world, despite its costs. If libertarians want to be taken seriously in the realm of foreign affairs, they would do well to shake off the Rothbardian shackles of isolationism/non-interventionism and embrace Madisonian federalism with a Christensenian twist. The 13 North American colonies that broke away from the British Empire were sovereign states when they banded together. The 29 members of NATO are sovereign states, too, and there’s no reason to believe that Madison’s federal blueprint can’t band them together as well.

If libertarians are comfortable embracing non-interventionism as a foreign policy doctrine, even though it has never been tried and even though it’s based on a shoddy interpretation of history, there’s no reason why they can’t instead embrace federation as their go-to alternative. Federation at least has history on its side, and it’s also got the obscure appeal that libertarians so love to ooze at public gatherings. Will 2020 be the year that libertarians shift from non-interventionism to federation?

Nightcap

  1. Fear and loathing at the NATO summit? Curt Mills, American Conservative
  2. The Russians are in Libya now, too Frederic Wherey, Foreign Policy
  3. Is the 21st century really about US-China? Will Staton, Areo
  4. The opioids have been nothing but good to us Steven Landsburg, Big Questions

Nightcap

  1. If the United States leaves NATO: a thought experiment Economist
  2. The cries of populism have always been hollow Bryan Caplan, EconLog
  3. A new two-party system in the democratic West John Quiggin, Crooked Timber
  4. The student takeover at Cornell, 50 years on Tony Fels, Quillette

Nightcap

  1. An anticipatory elegy Walter A. McDougall, Law & Liberty
  2. Colonial lives of legality Alvina Hoffmann, Disorder of Things
  3. The limits of interdisciplinarity Nick Nielsen, Grand Strategy Annex
  4. Should we federalize the social sciences? Michelangelo Landgrave, NOL

Nightcap

  1. The year the singularity was cancelled Scott Alexander, Slate Star Codex
  2. The nature of sex Andrew Sullivan, Interesting Times
  3. We should firmly shut the open door William Ruger, Law & Liberty
  4. What’s different about the Sri Lanka attacks? Krishnadev Calamur, Atlantic