Made in EU bargaining puts Türkiye's customs union to the test

Two gaps between the headline and the text

According to a Hürriyet Daily News report on 27 October, the Franco-German position brings the United Kingdom into the automotive framework and leaves Türkiye outside it. The headline concludes that Europe is shutting Türkiye out, but the text tells a different story on 2 points. First, according to a 13 March assessment by Hergüner Bilgen Üçer, the Commission's proposal treats content from customs union or free trade partners as EU origin under Articles 8 and 9. That answers, at the level of the proposal text, the question we left as unverified in our report of 12 October.

Second, the Franco-German text is a position paper. As OSD chairman Cengiz Eroldu pointed out, it represents only 2 of 27 member states. Hürriyet reported on 21 October that the European Parliament vote is expected in December and that interinstitutional negotiations could conclude in April 2027. The risk therefore lies not in the current rule, but in a new exemption being written that separates automotive from the general equivalence rule.

The constraint: a partner that applies the rule but does not write it

Türkiye's weakness in the bargaining shows up in two dated documents. According to the text cited by Alomaliye, the Ministry of Industry and Technology transposed the EU's Machinery Regulation 2023/1230 into domestic law through Official Gazette no. 33402 on 16 October 2026. The Ministry of Trade announced on 27 October that the alignment declaration had been signed. Türkiye thus applied an EU rule that treats software as a safety component and sets extra requirements for artificial intelligence. It did so in two steps over 11 days, without having voted on the text.

The payoff from the customs union is visible in Hürriyet's 27 October report. Machinery accounts for 10% of exports to the EU, and sales above 10 billion dollars a year can now be certified at home. The same partnership does not extend to public procurement. According to the Commission statement cited by Hergüner, Turkish firms cannot bid directly in EU public tenders. That procurement and subsidy channel is exactly where the Made in EU rule will bite.

The scale: 22.9 billion dollars and the parts industry

OİB data cited by Forbes Türkiye show automotive exports of 31.145 billion dollars in January–September, with 22.948 billion dollars going to the EU. The parts industry carries 39% of the total at 12.135 billion dollars, and it is the most exposed item in the Made in EU debate. If Turkish parts do not count as EU content even in a vehicle assembled in the EU, assemblers in the EU will be pushed to change suppliers.

The asymmetry of the bargaining shows in the September breakdown. Germany at 629 million dollars, France at 506 million, the United Kingdom at 453 million and Italy at 349 million were the top 4 markets. The United Kingdom, covered by the Franco-German position, is Türkiye's third-largest market, while Türkiye is left out of the same text. In our reading, Italy's place in the top 4 explains Ankara's decision on 21 October to step up contacts with Italy and Spain.

The ally is not Ankara but European manufacturers

Türkiye's strongest card is not its own diplomacy but the European companies that built 37,500 heavy commercial vehicles in Türkiye in 2025. ACEA's Maria Linkova-Nijs said on 27 October that manufacturers who invested in good faith should not be penalised, and highlighted heavy commercial vehicle investments. According to a CarScoops report on 24 February, Ford Europe chairman Jim Baumbick had also asked for the rules to stay open to trusted partners such as the United Kingdom and Türkiye.

The weakness of this alliance lies in ACEA's 27 October request: the association wants an exemption for existing investments, not new ones. A narrow, time-limited exemption would protect current output of 29,000 trucks. But it would put Türkiye on unequal footing with rival sites inside the EU in model and plant decisions after 2027. What is at stake is less the 22.9 billion dollars of EU exports in the first 9 months of 2026 than Türkiye's place in the queue for investment in later model cycles.

Talay's reading and the falsifier

The most likely path (50%) is a targeted exemption for existing investments and heavy commercial vehicles written into the text, with new investments subject to a narrower definition of origin. We put a 35% probability on Articles 8 and 9 of the Commission proposal also holding for automotive, and 15% on Türkiye being treated as fully non-EU in subsidised public procurement. What would falsify our reading: the Council's negotiating position tying the automotive origin criterion to a definition that covers the United Kingdom but not Türkiye, or the close-partner clause being dropped in Parliament's December vote.