International Business Customs & Unions

Richard GreenwoodO’Neil WilliamsLekan Adekoya

Turkey, holding the CROWN to the EU’s throne on World Trade & Energy

What you may know about the EU…• A supranational and intergovernmental union of

27 states.• Aspiration as the most governing force in all

aspects throughout the world; especially in the light of trading.

• The US economy accounts for 25% of the world economy, the EU, 32%.

• The largest economic and political entity in the world, with 494 million people and a combined nominal GDP of €11.6 (US$14.5) trillion in 2006.

(US figure now lower with drop in US$)

Structure of the EU

C O M M O N F O R E IG N A N DS E C U R ITY P O L IC Y

(C F S P )

E U R O P E A N C O M M U N ITIE S(E C S C , E C , E U R A TO M )

JU S TIC E A N D H O M E A F F A IR S(JH A )

E U R O P E A N U N IO N

Current Objectives•Deepening of the EU: development of institutions and closer economic and political integration (possibly also military co-operation)

•Widening of the EU: enlargement to incorporate the emerging market countries of central and eastern Europe (first wave on May 1,2004)

The Soviet’s Oil… !?• The rapid increase in the world’s energy demand had brought in

Russia as one of the dominant oil producers. • Russia had once been one of the largest oil producing countries in

the world prior to the collapse of the USSR.• The EU as we know it today has a strong dependence on Russian

Oil.• "Whether one likes it or not, in the next 15 to 30 years, the

percentage of EU demand covered by supplies from Russia will grow."

• Russia is also resisting EU pressure to ratify the Energy Charter Treaty, which would give the EU access to oil and gas from Turkmenistan and Kazakhstan via the Russian pipeline network.

EU’s Current Oil & Gas dependence• Russia is the EU's number one energy supplier on 25 percent of oil

and gas, with Middle East and African countries, globally accounting for 31 percent of oil and 14 percent of gas.

• Russia third largest trading partner of EU25.• The Druzhba pipeline supplies 1.8 mil barrels per day to Poland

and Germany through Belarus. Some 30% of the EU oil imports or 25% of consumption comes from Russia, and over 50% of these cross Belarus.

• EU25 deficit in trade with Russia increased from 17.6 bill in 1999 to 50.3 bill in 2005.

• An increased deficit was due to imports of energy, which rose from 17.6 bill in 1999 to 70.6 bill in 2005.

The Turkish Dispute.. unresolved…• Finished goods in European markets came through the

land by routes of the Silk Road.• The silk road consisted of a few over-land trading

routes between Central Asia and the West (Europe). • The Silk Road and naval routes of the Indian Ocean

were controlled by China and Islamic powers, most notably the Ottoman Empire (Present day Turkey).

• Islamic leaders extracted taxes and controlled the passage of people and goods.

• Being that it became too costly, present day EU countries then had to now find another route to achieve their goal.

The rivalry continues…• The first European powers to undertake the risky

expansion endeavor from the mid 1400's - 600's were Portugal and Spain, followed by the Netherlands, France and England, to explore and expand direct sea-based trading relations, to avoid any encounter with the Ottoman Empire.

• The most desired natural resource of modern day industrialism isn’t gold, ivory, or slavery, it is oil (also considered the BLACK GOLD)

• The bulk of Oil is in the Middle East, Africa, and Asia. For the European Union to gain full access to this “Black Gold”, they must ultimately gain access through the Ottoman Empire (Turkey), their nemesis for centuries.

OIL in the WORLD

• Oil and gas make up 65 to 70 percent of all the energy consumed by the three largest economies in the world- the U.S., Japan, and the European Union.

• Oil is the world's most important commodity. Without oil, today's industrial society would simply be impossible.

• Oil was instrumental in the victory of the Allies in the First World War and the conclusion of the Second World War seen in the capture of the world’s oil resource by the United States from the British.

(No wonder Exxon and the Bush Admin. are contemplating the assassination of Chavez)

"If you want to rule the world you need to control the oil. All the oil. Anywhere."Michel Collon (Monopoly).

We should’ve invested in a REAL military!.. Now there’s a ‘poor’ big head Muslim terrorizing our door…• Applicant since 1987 where they became a

potential member and later in 2004 to becoming a candidate member.

• Turkey based on geography is more than twice the size of Germany and could possibly become the largest European Nation.

• Issue of having one of the highest growth rates and actually the lowest per capita gross domestic product in the EU, based on the CIA’s World Fact Book.

• Many Europeans strongly oppose Turkey’s entry into the EU. “There is the sense that Turkey is too big, too poor and too Muslim.”

• Turkey is considered a Muslim Extremist country that borders the Middle East, where 5 percent of Turkey is in Europe and the other 95 percent is in Asia.

• Turkey’s accession to the EU for the greater good of the Union, given that Turkey fulfills the necessary criteria for entry.

TURKEY’S GEOGRAPHICAL POSITIONING

EU Candidate Countries

The Greater Good of the Turks..• In 2006 Turkey’s share of the total EU imports represented 2.8

percent, and exports represented 3.95 percent• On the other hand the EU was Turkey’s largest trading partner in

both imports at 45.74 percent and exports at 53.30 percent.• The region neighboring Turkey is comprised of territories such as

Iraq, Iran, Kuwait, and Saudi Arabia, • All factually known for having more proven oil reserves under

their soil than the rest of the world combined. • All these territories are linked to the EU through Turkey.• Europe has had major economic interests in this particular region,

both as a consumer of Middle Eastern petroleum and gas, and as a producer of industrial goods, weapons, and related military technology for which the Middle East constitutes a lucrative market.

• It would serve as the EU’s major link between the oil resources in the Middle East.These are the main reasons

that make Turkey an economically potential crown jewel for membership; especially if the EU wants to gain ultimate access to their source of energy.

EUROPEAN MAP

The Future of European Energy• By 2030, on the basis of present trends, the EU

will be 90% dependent on imports for its requirements of oil and 80% dependent regarding gas. Making a real effort to at first cap EU energy demand at present levels and subsequently reduce it, would represent an important contribution in developing a coherent and balanced policy to promote the security of energy supplies for the European Union.

• "In the next 20 to 30 years around 70% of the Union's energy requirements, compared to 50% today, will be met by imported products – some from regions threatened by insecurity," says the paper extrapolating current trends.

Forecasted Energy Statistics

EU Energy Consumption• Russia supplies over 25 percent of the EU's

gas and oil, and the idea of a more coordinated common external energy policy is predominantly focused on this huge country.

• By comparison, use of renewable energy is expected to more than double between 2000 and 2030. It accounted for 5.8 percent of total energy use in 2000 and by 2030 is expected to account for 12.2 percent – thus overtaking nuclear energy's share.