trade implications of extending the turkey-eu customs union agreement to agricultural products

Abstract

Turkey’s membership of EU will lead to the enlargement of already established customs union between EU and Turkey for the agricultural products. This involves not only a full liberalization of agricultural trade within the EU but also the implementation of a Common external tariff. In this new situation, trade diversion and creation effects for agro-food trade will emerge. In terms of article XXIV of GATT, the possible results of these counteracting effects are important. In this paper, using the Armington assumption, the trade diversion and creation effects of Turkey’s membership for the agricultural trade will be calculated and analyzed.Elasticities of Substitution, Armington Elasticities, Fixed Effect Panel, Random Effect Panel, Trade Creation, Trade Diversion, EU Membership of Turkey, Agricultural Products, Turkey, Article XXIV of GATT, Turkish Agricultural Sector Model, TAGRIS