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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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Author Info

  • Felicitas Nowak-Lehmann Danzinger
  • Dierk Herzer
  • Inmaculada Martinez-Zarzoso
  • Sebastian Vollmer

Abstract

This paper investigates Turkey's sectoral trade flows to the EU based on panel data from the period 1988 to 2002. Turkey's sixteen 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.

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File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.43213.de/dp483.pdf
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Bibliographic Info

Paper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 483.

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Length: 31 p.
Date of creation: 2005
Date of revision:
Handle: RePEc:diw:diwwpp:dp483

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Keywords: Gravity model; Panel data; Sectoral trade flows; Price competition; Transport;

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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. Soloaga, Isidro & Winters, L. Alan, 1999. "Regionalism in the Nineties: What Effect on Trade?," CEPR Discussion Papers, C.E.P.R. Discussion Papers 2183, C.E.P.R. Discussion Papers.
  3. 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.
  4. Laszlo Matyas, 1997. "Proper Econometric Specification of the Gravity Model," The World Economy, Wiley Blackwell, Wiley Blackwell, vol. 20(3), pages 363-368, 05.
  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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Citations

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Cited by:
  1. 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.
  2. 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).
  3. Kristjánsdóttir, Helga, 2008. "Exports under the Flicker of the Northern Lights," Economics Discussion Papers, Kiel Institute for the World Economy 2008-17, Kiel Institute for the World Economy.
  4. 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.
  5. Berument, M. Hakan & Dincer, N. Nergiz & Mustafaoglu, Zafer, 2014. "External income shocks and Turkish exports: A sectoral analysis," Economic Modelling, Elsevier, Elsevier, vol. 37(C), pages 476-484.
  6. Ahmet Faruk Aysan & Yavuz Selim Hacihasanoglu, 2007. "Investigation on the Determinants of Turkish Export-Boom in 2000s," Working Papers, Bogazici University, Department of Economics 2007/19, Bogazici University, Department of Economics.
  7. 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).
  8. Kemal Türkcan, 2014. "Investigating the Role of Extensive Margin, Intensive Margin, Price and Quantity Components on Turkey’s Export Growth during 1998-2011," Working Papers, Turkish Economic Association 2014/2, Turkish Economic Association.
  9. Kamil Yılmaz & Şule Özler & Erol Taymaz, 2007. "History Matters for the Export Decision: Plant Level Evidence from Turkish Manufacturing Industry," Koç University-TUSIAD Economic Research Forum Working Papers, Koc University-TUSIAD Economic Research Forum 0706, Koc University-TUSIAD Economic Research Forum.
  10. 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, Ibero-America Institute for Economic Research 224, Ibero-America Institute for Economic Research.
  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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