Static Effects of the EU-Turkey Customs Union

Journal of International Trade and Diplomacy, Turkey Undersecretariat of the Prime Ministry for Foreign Trade, Autumn 2006, Volume 1, pp. 117-138

Eighth Meeting of the European Trade Study Group, September 7- 9, 2006, Vienna, Austria

17 Pages Posted: 16 Feb 2013

See all articles by Fatma Karaman

Fatma Karaman

Yasar University

Lerzan Ozkale

Istanbul Technical University

Date Written: September 1, 2006

Abstract

Studies on the economic effects of Turkey- EU Customs Union increased considerably in the last years, as a result of the deepening of the relations between the two parties. This is mainly due to the opening of the accession negotiations between Turkey and the European Union in October 1995. The first part of this study focuses on the evaluation of Turkey’s trade figures. This study aims to investigate Turkey’s import demand function using an econometric panel data application.

First the analysis was made for Turkey’s general import demand function. A good reason for that is the removal of European Community’s tariffs on its imports from Turkey in 1971 while Turkey waited the entering into force of the Customs Union in 1996 for abolishing the trade barriers to the EU. Our findings show that Turkey’s import demand is income elastic and price inelastic. The analysis was repeated for the main import sectors and empirical findings indicate that Customs Union Agreement has trade creation effects among some sectors and trade diversion effects among some others, while no effects at all could be calculated for the remaining.

Keywords: Customs Union, Static Effects, Panel Data Modelling

JEL Classification: F14, F15

Suggested Citation

Karaman, Fatma and Ozkale, Lerzan, Static Effects of the EU-Turkey Customs Union (September 1, 2006). Journal of International Trade and Diplomacy, Turkey Undersecretariat of the Prime Ministry for Foreign Trade, Autumn 2006, Volume 1, pp. 117-138, Eighth Meeting of the European Trade Study Group, September 7- 9, 2006, Vienna, Austria , Available at SSRN: https://ssrn.com/abstract=2218980

Fatma Karaman (Contact Author)

Yasar University ( email )

DYO Kampusu 364 Sk No:5
Bornova
Izmir, 35500
Turkey

Lerzan Ozkale

Istanbul Technical University ( email )

Ayazaga Kampusu
Fen Edebiyat Fakultesi
İstanbul
Turkey

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