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The Impact of a Customs Union between Turkey and the EU on Turkey's Exports to the EU

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  • FELICITAS NOWAK-LEHMANN
  • DIERK HERZER
  • INMACULADA MARTINEZ-ZARZOSO
  • SEBASTIAN VOLLMER

Abstract

This article investigates Turkey's sectoral trade flows to the EU based on panel data from the period 1988 to 2002. Turkey's 16 most important export sectors are analysed. Emphasis is placed on the role of price competition, EU protection and transport costs in the export trade between Turkey and the EU. The empirical model used is an extended version of the gravity model. This study is also a contribution to the current discussion of whether Turkey should be granted full EU membership or a privileged partnership with the EU, which for Turkey would mean improved access to the EU market for its products, among other benefits. Our investigation focuses on the latter policy outcome: the impact of deepening the customs union between Turkey and the EU and applying the common agricultural policy (CAP) to Turkish agricultural exports. To this end, the impact of the 1996 customs union covering most industrial goods and processed agricultural goods, is evaluated on a sectoral level. We also perform simulations to quantify the impact of the potential inclusion of agricultural goods, as well as iron and steel and products thereof, into the full customs union between Turkey and the EU which is still to come. Copyright (c) 2007 The Author(s); Journal compilation (c) 2007 Blackwell Publishing Ltd.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal JCMS: Journal of Common Market Studies.

Volume (Year): 45 (2007)
Issue (Month): (09)
Pages: 719-743

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Handle: RePEc:bla:jcmkts:v:45:y:2007:i::p:719-743

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References

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  1. Inmaculada Martínez-Zarzoso & Felicitas Nowak-Lehmann D., 2003. "Augmented gravity model: An empirical application to Mercosur- European trade flows," International Trade, EconWPA 0309019, EconWPA.
  2. Laszlo Matyas, 1997. "Proper Econometric Specification of the Gravity Model," The World Economy, Wiley Blackwell, vol. 20(3), pages 363-368, 05.
  3. Soloaga, Isidro & Alan Wintersb, L., 2001. "Regionalism in the nineties: what effect on trade?," The North American Journal of Economics and Finance, Elsevier, vol. 12(1), pages 1-29, March.
  4. Shang-Jin Wei, 1996. "Intra-National versus International Trade: How Stubborn are Nations in Global Integration?," NBER Working Papers 5531, National Bureau of Economic Research, Inc.
  5. Inmaculada Martínez-Zarzoso & Felicitas Nowak-Lehmann D., 2004. "Economic and Geographical Distance: Explaining Mercosur Sectoral Exports to the EU," Open Economies Review, Springer, Springer, vol. 15(3), pages 291-314, 07.
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Cited by:
  1. Kristjánsdóttir, Helga, 2008. "Exports under the Flicker of the Northern Lights," Economics Discussion Papers 2008-17, Kiel Institute for the World Economy.
  2. Türkcan, Kemal, 2014. "Investigating the Role of Extensive Margin, Intensive Margin, Price and Quantity Components on Turkey’s Export Growth during 1998-2011," MPRA Paper 53292, University Library of Munich, Germany.
  3. Sule Ozler & Erol Taymaz & Kamil Yilmaz, 2007. "History Matters for the Export Decision Plant Level Evidence from Turkish Manufacturing Industry," ERC Working Papers 0704, ERC - Economic Research Center, Middle East Technical University, revised Mar 2007.
  4. Aysan, Ahmet Faruk & Hacihasanoglu, Yavuz Selim, 2007. "Investigation on the Determinants of Turkish Export-Boom in 2000s," MPRA Paper 5493, University Library of Munich, Germany.
  5. Luis Marcelo Florensa & Laura Márquez-Ramos & María Luisa Recalde & María Victoria Barone, 2014. "Does economic integration increase trade margins? Empirical evidence from LAIAs countries," Working Papers, Economics Department, Universitat Jaume I, Castellón (Spain) 2014/05, Economics Department, Universitat Jaume I, Castellón (Spain).
  6. Kavallari, Aikaterini & Maas, Sarah & Schmitz, P. Michael, 2010. "Evidence on Euromediterranean Trade Integration: The Case of German Olive Oil Imports," Journal of International Agricultural Trade and Development, Journal of International Agricultural Trade and Development, Journal of International Agricultural Trade and Development, vol. 59(1).
  7. Berument, M. Hakan & Dincer, N. Nergiz & Mustafaoglu, Zafer, 2014. "External income shocks and Turkish exports: A sectoral analysis," Economic Modelling, Elsevier, vol. 37(C), pages 476-484.
  8. Shanping Yang & Inmaculada Martínez-Zarzoso, 2013. "A Panel Data Analysis of Trade Creation and Trade Diversion Effects: The case of ASEAN-China Free Trade Area (ACFTA)," Ibero America Institute for Econ. Research (IAI) Discussion Papers 224, Ibero-America Institute for Economic Research.
  9. Ketenci, Natalya, 2014. "The Effect of the European Union Customs Union on the Balance of Trade in Turkey," MPRA Paper 54662, University Library of Munich, Germany.
  10. Kavallari, Aikaterini & Maas, Sarah & Schmitz, P. Michael, 2008. "Explaining German imports of olive oil: evidence from a gravity model," 2008 International Congress, August 26-29, 2008, Ghent, Belgium, European Association of Agricultural Economists 44217, European Association of Agricultural Economists.
  11. Tomasz Brodzicki & Stanislaw Uminski, 2013. "International trade relations of enterprises established in Poland's regions: gravity model panel estimation," Working Papers, Instytut Rozwoju, Institute for Development 1301, Instytut Rozwoju, Institute for Development.

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