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Turkey and the Ankara Treaty of 1963: What can Trade Integration Do for Turkish Exports

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Author Info

  • Nowak-Lehmann D., Felicitas
  • Herzer, Dierk
  • Martínez-Zarzoso, Inmaculada
  • Vollmer, Sebastian

Abstract

This paper investigates the trade effects of Turkey?s trade integration into the EU. To this end sectoral trade flows to the EU based on panel data from the period 1988 to 2002 are examined concentrating on Turkey?s sixteen most important export sectors. 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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Bibliographic Info

Paper provided by University of Goettingen, Department of Economics in its series Center for European, Governance and Economic Development Research Discussion Papers with number 43.

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Date of creation: 2005
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Handle: RePEc:zbw:cegedp:43

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Related research

Keywords: Trade integration; gravity model; sectoral trade flows; price competition; transport costs;

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References

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  1. James E. Anderson & Eric van Wincoop, 2000. "Gravity with Gravitas: A Solution to the Border Puzzle," Boston College Working Papers in Economics 485, Boston College Department of Economics.
  2. Helpman, Elhanan, 1987. "Imperfect competition and international trade: Evidence from fourteen industrial countries," Journal of the Japanese and International Economies, Elsevier, vol. 1(1), pages 62-81, March.
  3. Inmaculada Martínez-Zarzoso & Felicitas Nowak-Lehmann D., 2003. "Augmented gravity model: An empirical application to Mercosur- European trade flows," International Trade 0309019, EconWPA.
  4. Inmaculada Martínez-Zarzoso & Felicitas Nowak-Lehmann D., 2004. "Economic and Geographical Distance: Explaining Mercosur Sectoral Exports to the EU," Open Economies Review, Springer, vol. 15(3), pages 291-314, 07.
  5. Inmaculada Martínez-Zarzoso & Felicitas Nowak-Lehmann, 2003. "Augmented Gravity Model: An Empirical Application to Mercosur-European Union Trade Flows," Journal of Applied Economics, Universidad del CEMA, vol. 0, pages 291-316, November.
  6. Peter Egger, . "A Note on the Proper Econometric Specification of the Gravity Equation," WIFO Working Papers 108, WIFO.
  7. 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.
  8. Busse, Matthias, 2003. "Tariffs, Transport Costs and the WTO Doha Round: The Case of Developing Countries," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 4(1).
  9. Bergstrand, Jeffrey H, 1989. "The Generalized Gravity Equation, Monopolistic Competition, and the Factor-Proportions Theory in International Trade," The Review of Economics and Statistics, MIT Press, vol. 71(1), pages 143-53, February.
  10. Arie Arnon & Avia Spivak & J. Weinblatt, 1996. "The Potential For Trade Between Israel, The Palestinians and Jordan," The World Economy, Wiley Blackwell, vol. 19(1), pages 113-134, 01.
  11. Fritz Breuss & Peter Egger, 1999. "How Reliable Are Estimations of East-West Trade Potentials Based on Cross-Section Gravity Analyses?," Empirica, Springer, vol. 26(2), pages 81-94, June.
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