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Turkish EU Membership: A Simulation Study on Economic Effects

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  • Pekka Sulamaa
  • Mika Widgrén

Abstract

This paper evaluates the economic effects of Turkish EU membership. The evaluation is based on the widely utilized computable general equilibrium called model GTAP (Global Trade Analysis Project). Imperfect competition is modelled by existence of scale economies on non agricultural sectors. The latest GTAP database version (base year 2001) is aggregated into seven regions: Turkey, Germany-Austria, North EU, South EU, Balkan countries, NAFTA, ASIA and Rest of World. We analyse economic effects of abolishing trade barriers between the EU25 and Turkey and applying common external tax on Turkey. Turkish EU membership is clearly beneficial for Turkey and it does not seem to have significant negative impact for the rest of the world. If we take scale economies into account the aggregate effects are larger than in perfect competition case.

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Bibliographic Info

Paper provided by Government Institute for Economic Research Finland (VATT) in its series Discussion Papers with number 410.

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Date of creation: 12 Jan 2007
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Handle: RePEc:fer:dpaper:410

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Keywords: Turkey; EU; CGE; international trade;

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References

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  1. Francois, Joseph, 1998. "Scale Economies and Imperfect Competition in the GTAP Model," GTAP Technical Papers 317, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
  2. Harrison, Glenn W. & Rutherford, Thomas F. & Tarr, David G., 1996. "Economic implications for Turkey of a customs union with the European Union," Policy Research Working Paper Series 1599, The World Bank.
  3. Bernard M. Hoekman & Togan Sübidey, 2005. "Turkey : Economic Reform and Accession to the European Union," World Bank Publications, The World Bank, number 7494, January.
  4. Hanoch, Giora, 1975. "Production and Demand Models with Direct or Indirect Implicit Additivity," Econometrica, Econometric Society, vol. 43(3), pages 395-419, May.
  5. Howe, Howard & Pollak, Robert A & Wales, Terence J, 1979. "Theory and Time Series Estimation of the Quadratic Expenditure System," Econometrica, Econometric Society, vol. 47(5), pages 1231-47, September.
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Cited by:
  1. Karaca, Orhan & Philippidis, George, 2008. "Turkey’S Accession To The European Union: Implications For Agricultural Sectors," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6398, European Association of Agricultural Economists.
  2. Dudu, Hasan & Cakmak, Erol H., 2013. "Trade Liberalization and Productivity Growth: A Recursive Dynamic CGE Analysis for Turkey," Proceedings Issues, 2013: Productivity and Its Impacts on Global Trade, June 2-4, 2013. Seville, Spain 152357, International Agricultural Trade Research Consortium.

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