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Has European Customs Union Agrement Really Affected Turkey's Trade?

  • Bilin Neyapti
  • Fatma Taskin
  • Murat Ungor

The numerous discussions regarding the advantages and disadvantages of Turkey's becoming a member of the Customs Union has been inconclusive. The empirical analysis that mostly focus on the changes in the volume of trade without much regard to the conjectural changes have also been insufficient. This study attempts to shed light on this issue in a formal analysis of Turkey's international trade by empirically accounting for the changes before and after the Customs Union Agreement (CUA). In doing so, we explicitly account for the concurrent changes in the macroeconomic environment that may have affected Turkey's trade with the rest of the world. Our empirical findings indicate that CUA has not only positively impacted on Turkey's trade, but also led to changes in the behaviour of both exports and imports with regards to their responsiveness to underlying variables.

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Paper provided by Bilkent University, Department of Economics in its series Departmental Working Papers with number 0404.

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Date of creation: 2004
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Handle: RePEc:bil:bilpap:0404
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  1. Peter Kennedy, 2003. "A Guide to Econometrics, 5th Edition," MIT Press Books, The MIT Press, edition 5, volume 1, number 026261183x, June.
  2. Marian E. Bond, 1987. "An Econometric Study of Primary Commodity Exports from Developing Country Regions to the World," IMF Staff Papers, Palgrave Macmillan, vol. 34(2), pages 191-227, June.
  3. Boozer, Michael A., 1997. "Econometric Analysis of Panel Data Badi H. Baltagi Wiley, 1995," Econometric Theory, Cambridge University Press, vol. 13(05), pages 747-754, October.
  4. Murray, Tracy & Ginman, Peter J, 1976. "An Empirical Examination of the Traditional Aggregate Import Demand Model," The Review of Economics and Statistics, MIT Press, vol. 58(1), pages 75-80, February.
  5. J. A. Hausman, 1976. "Specification Tests in Econometrics," Working papers 185, Massachusetts Institute of Technology (MIT), Department of Economics.
  6. Morris Goldstein & Mohsin S. Khan, 1976. "Large versus Small Price Changes and the Demand for Imports (Demande d'importation et modification forte ou faible des prix) (Grandes y pequeñas variaciones de precios y la demanda de importación)," IMF Staff Papers, Palgrave Macmillan, vol. 23(1), pages 200-225, March.
  7. Selahattin Bekmez, 2002. "Sectoral Impacts of Turkish Accession to the European Union: A General Equilibrium Analysis," Eastern European Economics, M.E. Sharpe, Inc., vol. 40(2), pages 57-84, March.
  8. Josef Brada & Ali Kutan & Su Zhou, 1997. "The exchange rate and the balance of trade: The Turkish experience," Journal of Development Studies, Taylor & Francis Journals, vol. 33(5), pages 675-692.
  9. J. Mercenier & Erinç Yeldan, 1996. "On Turkey's Trade Policy : Is A Customs Union with Europe Enough?," Departmental Working Papers 964, Bilkent University, Department of Economics.
  10. Harrison, Glenn W. & Rutherford, Thomas F. & Tarr, David G., 1997. "Economic implications for Turkey of a Customs Union with the European Union," European Economic Review, Elsevier, vol. 41(3-5), pages 861-870, April.
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