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Effects Of European Union-Turkey Customs Union On Turkish Foreign Trade

Author

Listed:
  • BAYAR Yılmaz

    (Karabuk University, Turkey)

  • OZEKICIOGLU Halil

    (Cumhuriyet University, Turkey)

Abstract

Financial liberalization together with the globalization led countries to constitute economic integration in form of preferential trading area, free trade area and customs union especially since 1980s. European Union, which has been at the stage of Economic and Monetary Union, is one of the biggest and most advanced economic integration models in the world. This study examines the effects of European Union-Turkey Customs Union on Turkish foreign trade between 1995-2011 by using static analysis and Balassa index. We found that there was trade creation effect and no trade diversion effect of the Customs Union. Moreover Turkey increased its comparative advantage on 50 product classes and lost its comparative advantage on 17 product classes, while Turkey sustained its comparative advantage on 188 product classes relative to European Union after establishment of the Customs Union.

Suggested Citation

  • BAYAR Yılmaz & OZEKICIOGLU Halil, 2014. "Effects Of European Union-Turkey Customs Union On Turkish Foreign Trade," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 9(2), pages 16-26, August.
  • Handle: RePEc:blg:journl:v:9:y:2014:i:2:p:16-26
    as

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    File URL: http://eccsf.ulbsibiu.ro/RePEc/blg/journl/922bayar&ozekicioglu.pdf
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    References listed on IDEAS

    as
    1. Corden, W M, 1972. "Economies of Scale and Customs Union Theory," Journal of Political Economy, University of Chicago Press, vol. 80(3), pages 465-475, May-June.
    2. Ayten Aysen Kaya, 2006. "Imalat Sanayi Ihracatinda Uzmanlasma: Türkiye - Avrupa Birligi Analizi," Working Papers 0605, Ege University, Department of Economics.
    3. Kemp, Murray C. & Wan, Henry Jr., 1976. "An elementary proposition concerning the formation of customs unions," Journal of International Economics, Elsevier, vol. 6(1), pages 95-97, February.
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