TÜRKİYE’S EMERGING ROLE AS GLOBAL TRADE DYNAMICS TRANSFORM

In this new era, as global trade evolves toward BANI and RUPT dynamics, Türkiye is poised to
secure a critical position in global value chains thanks to its deepening regulatory alignment
with the EU, its strategic location, and its sustainability-focused transformation.

CHALLENGING GLOBAL DYNAMICS

Recent years have arguably marked one of the most volatile and transformative periods in the history of international trade. The frequency, diversity, and depth of structural shifts have intensified, while predictability has weakened amid rapidly changing sanctions regimes and regulatory frameworks—often revised, postponed, or reinterpreted with limited lead time.

At the same time, China’s increasingly assertive—at times described as aggressive— trade expansion strategies are fundamentally reshaping competitive landscapes across multiple sectors. No longer confined to renewable energy, telecommunications, and logistics infrastructure, China is now expanding its market share in automotive, white goods, and broader consumer electronics, leveraging exports and outbound investments to absorb excess capacity. This trend is particularly visible within the EU–Türkiye–US trade triangle.

In an environment of rising geopolitical tensions, the global business ecosystem is shifting beyond the traditional VUCA (Volatility, Uncertainty, Complexity, Ambiguity) paradigm toward more acute frameworks such as BANI (Brittle, Anxious, Nonlinear, Incomprehensible) and RUPT (Rapid, Unpredictable, Paradoxical, Tangled), reflecting a deeper level of systemic disruption. Europe’s response to this evolving landscape differs from that of the United States. While the US tends toward more exclusionary and protectionist measures, the European Union—despite sharing similar strategic concerns—leans toward managed competition, gradual localization, and adherence to pre-defined policy roadmaps. This approach is largely shaped by the EU’s ambitious green transition targets, the structural challenges faced by its domestic industry, the scale of required investments, and the tangible benefits of cost-efficient technologies—particularly those originating from China—for consumers and industrial continuity.

It is also important to note that, despite overarching EU-level strategies, inconsistencies may arise among Member States at the national level. Nevertheless, much like a transatlantic ocean liner maintaining its course, the EU continues to prioritize predictability, making calibrated adjustments rather than abrupt shifts.

THE EU’S SUSTAINABILITY-LED COMPETITIVE RESET

In this context, the EU’s sustainability-oriented regulatory architecture plays a decisive role. The European Green Deal and the Carbon Border Adjustment Mechanism (CBAM), launched with significant momentum at the end of 2019, have rapidly evolved through the European Clean Industrial Deal announced in 2025 and the Industrial Acceleration Act communication in 2026.

Another emerging and strategically significant initiative is the “Made in Europe” (or “Made in EU”) concept, which is shaping a new layer of competitive positioning. Early signals suggesting that Türkiye could be included within this framework are encouraging, though they should be interpreted as the beginning of a negotiation process rather than a finalized outcome.

This development has also strengthened Türkiye’s motivation to modernize the EU–Türkiye Customs Union, reinforcing its appetite for deeper integration with an EU that continues to expand its commercial reach through new-generation free trade agreements. To complete the regulatory landscape, it is essential to highlight the interaction with key legislative pillars such as the Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD / CS3D). Despite recent adjustments introduced through Omnibus packages—affecting scope and timelines—the strategic objectives of these frameworks remain firmly intact.

These are complemented by an integrated set of regulations, including:
the EU Taxonomy Regulation,
the Sustainable Finance Disclosure Regulation (SFDR),
the EU Deforestation Regulation (EUDR), and
the European Sustainability Reporting Standards (ESRS).
Together, these instruments reinforce the EU’s twin transition objectives —green and digital— positioned at the core of its New Industrial Strategy for Europe. The EU remains committed to this  trajectory as a primary lever to restore and enhance its global competitiveness.

TÜRKİYE’S STRATEGIC ADVANTAGE

Türkiye, for its part, is closely tracking these developments and undertaking a comprehensive transformation of its own regulatory framework, aiming to remain fully aligned with Europe while safeguarding and enhancing its national competitiveness. On the climate front, Türkiye has taken a decisive step by adopting its Climate Law, paving the way for the establishment of a national Emissions Trading System (ETS). Secondary legislation is currently under development, while technical alignment efforts continue in areas such as accreditation, verification services, and carbon accounting methodologies.

Simultaneously, Türkiye is engaged in ongoing negotiations with the EU to ensure coherence between the EU ETS, CBAM, and the forthcoming Türkiye ETS frameworks. In this context, the European Commission’s early consideration of Türkiye within the “Made in Europe” initiative is particularly significant, as it creates a strategic foundation for deeper integration. A natural next step would be the gradual alignment of public procurement frameworks between the two sides.

Türkiye’s rapid regulatory convergence is not confined to the EU dimension alone. At the global level, Türkiye stands out as one of the first countries worldwide to mandate the implementation of the International Sustainability Standards Board (ISSB) standards issued by the IFRS Foundation. By integrating IFRS S1 and IFRS S2 into national regulation as TSRS 1 and TSRS 2, effective as of 1 January 2024, Türkiye has enabled companies operating within its jurisdiction to adapt more seamlessly to evolving financial and commercial expectations across global markets, including the United States.

In other words, just as it can be argued that China has accurately interpreted Europe’s green transition and cost pressures in recent years, Türkiye has demonstrated a clear strategic awareness of the EU’s transformation agenda and remains a close and proactive observer. The fundamental distinction lies in Türkiye’s status as an EU candidate country and its active Customs Union relationship with the Union—complemented by favorable demographics, geopolitical advantages, and a strategic geographic location.

As Türkiye continues to advance regulatory alignment and deepen trade agreements with the EU, it will further enhance its attractiveness for both domestic and international investors. More importantly, industrial companies established in Türkiye will gain stronger competitive positioning on the global stage, reinforcing Türkiye’s emerging role as a critical bridge in the evolving architecture of international trade. While global trade enters a phase defined by strategic recalibration rather than simple transformation, the ability to align competitiveness with sustainability and regulatory foresight becomes a decisive advantage. In this evolving landscape, Türkiye’s close regulatory alignment with the European Union, combined with its strategic location, industrial depth, and global standards adoption, creates a unique platform for business continuity and growth. For the business community, this moment calls not only for resilience, but for deliberate partnership-building, long-term investment perspectives, and proactive engagement with transformation agendas shaping global value chains.