At a time when Europe faces overlapping geopolitical, economic, and societal challenges, revitalizing the relationship between the European Union and Türkiye is not a matter of wishful thinking but of necessity. Despite years of political stagnation and an accession process effectively frozen since 2018 due to democratic backsliding, the economic and social interdependence between the two sides remains strong. If approached with pragmatism and guided by shared interests and values, this foundation holds the key to a renewed and mutually beneficial partnership.

Today, the EU and Türkiye stand at a crossroads. A full return to the accession path seems unlikely in the short term, yet complete disengagement would be both unrealistic and costly. Instead, both sides can focus on practical “low-hanging fruits”, i.e., tangible initiatives that can deliver mutual gains, rebuild confidence, and create positive spillovers in political and societal spheres. Pragmatic cooperation in the economic domain can gradually foster convergence with the EU’s normative framework, reinforcing the rule of law, transparency, and predictability through engagement rather than conditionality.

As highlighted in the Joint Communication by the High Representative and the European Commission on the state of play of EU–Türkiye relations from November 2023 (the so-called Borrell Report), “the full positive potential of the EU–Türkiye relationship has not yet materialized.” Türkiye has been a candidate country since 1999, with accession negotiations launched in 2005. Only one chapter has been provisionally closed, and the last was opened in 2016. Continued backsliding on core EU principles, including the rule of law, human rights, and judicial independence, has brought the process to an effective standstill, as reiterated by the Council conclusions of June 2018.

Yet, in the absence of active accession talks, regular high-level dialogues have emerged as alternative platforms to sustain engagement, address shared challenges, and identify new areas of convergence. Continuous efforts are required to maintain a conducive environment for renewed dialogue, reflecting the enduring pragmatism and mutual benefits of cooperation. Türkiye, both a candidate country and a Customs Union partner, remains one of the EU’s major trading partners. Bilateral trade reached €210 billion in 2024, with the EU as Türkiye’s largest trading partner and Türkiye ranking sixth for the EU. The inaugural High-Level Dialogue on Trade, held in July 2024, launched a constructive, forward-looking agenda. The High-Level Economic Dialogue in April 2025, the first since 2019, provided a platform to take stock of and deepen economic and financial ties.

The EU’s strength lies not only in its market power, but also in its capacity to translate economic integration into a community of shared values. Economic cooperation with Türkiye should therefore not be viewed as purely transactional. When anchored in democratic principles and good governance, it can enhance competitiveness, predictability, and societal resilience, rebuilding trust and anchoring Türkiye closer to the European model. 

To explore the multifaceted dimensions of this political-economic relationship, IstanPol has brought together five distinguished experts. Together, their analyses illustrate how a realistic, yet forward-looking EU-Türkiye agenda can take shape in today’s complex global landscape, demonstrating that deepening economic ties is not a substitute for political progress, but a pragmatic pathway toward rebuilding trust, generating shared prosperity, and re-anchoring the partnership in a rules-based, value-driven framework.

Why is modernizing the EU-Türkiye Customs Union important for Europe in today’s geopolitical context?

The modernization of the customs union between the EU and Türkiye is both an economic necessity and a strategic imperative. Europe now operates in an era of accelerated geopolitics, characterized by four key pillars: global finance, advanced technology, security, and societal transformation. A framework created in 1995 cannot meet the demands of digital supply chains, AI-driven competitiveness, and the fusion of technology and security. Modernization would strengthen Europe’s resilience amid US–China rivalry and rising protectionism. A renewed customs union -covering services, agriculture, the digital single market, social policies, and the green transition- would secure Türkiye’s place in Europe’s value chain, while reinforcing the EU’s economic and geopolitical presence from the Mediterranean to the Black Sea and Central Asia. Closer alignment would deepen transatlantic relations and NATO cooperation, while opening new synergies with the European defense sector, where Türkiye’s industrial base complements the EU’s pursuit of strategic autonomy and technological sovereignty.

A modernized customs union would also embody differentiated integration (Europe’s pragmatic model for flexible partnerships beyond full membership), showing that the EU can remain open, adaptable, and globally relevant in a multipolar world. Importantly, political difficulties should not be treated as preconditions for modernization. Their resolution will be a natural consequence of a mutually beneficial process that embeds rule-of-law, transparency, and public procurement standards at its core. European business fully supports this vision. BusinessEurope and its members view modernization as a way to enhance European economic competitiveness in a rapidly changing international environment. In today’s world, economic robustness is a strategic strength. Modernizing the EU–Türkiye customs union is Europe’s investment in its own future

Dr. Bahadır Kaleağası, President of the Bosphorus Institute, Paris-Istanbul

What challenges and opportunities do the EU’s twin transitions present for Türkiye, and what steps can Ankara take to align with these evolving EU standards?

The EU market has been undergoing a profound transition, denoted by the term “twin transitions,” which encompasses both green and digital spheres. For Türkiye, adapting and keeping up with the changes brought about by the transitions is a key challenge as well as an opportunity. 

Firstly, the green transition is evident in the European Green Deal, which mainstreams environmental sustainability-related regulations and production standards, promotes an increasing focus on the circular economy, and seeks to prevent carbon leakage through mechanisms such as the Carbon Border Adjustment Mechanism. The EGD requires partners of the EU, such as Turkey, to align with the changing standards and adopt a vigorous decarbonization agenda. Although simplification of rules and regulations to ease the burden on companies is currently occupying the EU’s agenda, the EGD is on the move, creating opportunities for Turkey to harmonize with new norms and rules, thereby creating initiatives in renewable energy, the circular economy, and clean technologies. 

The digitalization of the EU economy also presents a challenge in the form of adapting to new governance modalities in digital trade, personal data protection, the use of AI, and cybersecurity issues, as well as stepping up digital capabilities to connect with the changing standards in the EU market. Turkey can adapt to the changing rules, norms, and methods of the EU market by aligning with EU legislation, accelerate its own green and digital transition, and take the required measures to upgrade the Turkey-EU customs union and overall trade and economic partnership.

Assoc. Prof. Çiğdem Nas, Secretary General, Economic Development Foundation (IKV)

How can the EU and Türkiye strengthen global economic resilience, diversification, and sustainability amid rising economic security concerns and geopolitical disruptions?

The global economy is experiencing profound disruption. While economic interdependence has reached unprecedented levels, it has also increased vulnerability, particularly under the rising emphasis on “economic security.” Shocks such as the COVID-19 pandemic, the Russia–Ukraine war, and the Israel–Hamas conflict, along with the climate crisis and the shift toward decarbonization, are reshaping production and trade. The weakening of multilateralism and free trade norms further underscores a new era focused on economic resilience. Strengthening the resilience, diversification, and sustainability of global value chains (GVCs) has become a strategic priority. The European Union (EU) and Türkiye, closely linked through the 1995 Customs Union, are well-positioned to address these challenges. Türkiye’s geographic location, industrial base, and logistics infrastructure make it a natural partner for developing shorter, more reliable, and regionally anchored supply chains.

Enhanced EU–Türkiye cooperation can diversify production networks, reduce dependence on single suppliers, and expand market access, particularly through Türkiye’s growing ties with the Middle East, Africa, and Central Asia. Sustainability is central: aligning the EU’s Green Deal with Türkiye’s climate commitments can foster low-carbon production and green innovation. Challenges remain, including a trust deficit and lingering suspicion on both sides. Overcoming these requires sustained dialogue, confidence-building, and concrete joint initiatives. By embedding resilience, diversification, and sustainability into their partnership, the EU and Türkiye can strengthen strategic autonomy and contribute to a more stable, competitive, and sustainable global economy.

Dr. Kadri Taştan, Non-Resident Senior Fellow, German Marshall Fund of the United States, Brussels Office

How do Turkish women entrepreneurs contribute to EU-Türkiye relations, and what role could modernizing the Customs Union play in enhancing their impact?

Turkish women entrepreneurs represent a pivotal force in shaping EU-Türkiye relations, demonstrating leadership in innovation, sustainability, and inclusive economic growth. Their enterprises are not only drivers of business success but also catalysts for broader societal transformation, advancing digital, green, and social transitions that strengthen interregional cooperation. Beyond economic metrics, their impact reflects courage, agency, and commitment to gender equality, aligning with core EU principles.

EU frameworks such as the Digital Agenda for Europe, the European Green Deal, and the Gender Equality Strategy provide essential inspiration and support for women-led businesses in Türkiye, enhancing access to education, networks, and financial instruments, and enabling meaningful participation in regional integration. Nonetheless, challenges persist; women-led businesses in Türkiye account for only 18.2% of total enterprises, below the European average of approximately 30%. Modernizing the Customs Union is particularly crucial, as the current agreement largely excludes sectors where women are most active - services, agriculture, and public procurement. Reforming this framework would promote inclusion and equality, while creating new market opportunities and enhancing competitiveness for both Türkiye and the EU.

KAGIDER’s 500+ members, representing 10% of the Turkish economy, exemplify this transformative potential. Over 23 years, the association has reached more than 170,000 women through 80 projects with 162 partners. Its global engagement - including founding membership in the W20, consultative status at UN ECOSOC, participation in the EBRD NGO Steering Committee, its Brussels focal point since 2008, longstanding involvement in the Joint Consultative Committee, and recent selection as an enlargement candidate member of the EESC - underscores its commitment to advancing a positive agenda for EU-Türkiye cooperation.

Yeşim Müftüler Seviğ, Secretary General, Women Entrepreneurs Association of Türkiye (KAGIDER)

How can Türkiye contribute to Europe’s defense and strategic autonomy, and what political steps are needed to realize this potential partnership? 

Russia’s invasion of Ukraine and its ongoing hybrid warfare against the EU have sent shockwaves across the continent, prompting a fundamental rethink of Europe’s defense strategy. The EU now seeks to reduce its deep dependency on the US, an increasingly unpredictable ally, and to build its own defense capabilities. Under the ReArm Europe / Readiness 2030 Plan, the EU aims to mobilize up to €800 billion for defense and provide €150 billion in defense loans through the SAFE program.

This moment presents a historic opportunity for Türkiye, home to NATO’s second-largest army and a rapidly expanding defense industry. While this is politically and strategically important in positioning the country as a leading actor in Europe’s future, it also offers significant economic prospects. Turkish defense companies are well-positioned to help strengthen Europe’s defense capabilities, develop new technologies, and establish deep strategic partnerships with firms across EU member states. Some are already active in EU markets, while others are exploring new opportunities and forming strategic partnerships. This transformation could turn the defense industry into one of Türkiye’s largest sectors and a key driver of its future economic growth.

For the partnership between the EU and Türkiye to reach its full potential, the country’s inclusion in strategic planning as well as in the SAFE program and other defense initiatives is essential. However, significant obstacles remain, as EU–Türkiye relations are currently at a historic low point. To unlock this opportunity, four key steps are required: (1) Strengthening democratic standards in Türkiye; (2) rebuilding mutual trust; (3) creating greater predictability in Türkiye’s foreign policy; (4) a visionary approach from the EU toward its relations with Türkiye

These are significant challenges, but addressing them is essential to seize this moment and build a stronger, more secure, and strategically autonomous democratic Europe, grounded not only in shared strategic interests but also in common values.

Dr. Demir Murat Seyrek, Adjunct Professor, Brussels School of Governance (VUB) and Academic Fellow, European Policy Centre (EPC)

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This issue review was authored by Ayşe Yürekli, non-resident fellow at IstanPol, with research and editorial assistance provided by Rona Şenol, research assistant at IstanPol.

IstanPol thanks Friedrich-Ebert-Stiftung Türkiye Office for their contribution to this project. The views stated in this paper belong to the authors and need not agree, partly or entirely, with the institutional views of IstanPol or Friedrich-Ebert-Stiftung.