This paper shall investigate the trade integration between Turkey and the EU. The plan of the book is as follows. At first the historical background of the development concerning the trade relations between the two parties is conveyed. This includes the period from first association to implementing a customs union (CU) between Turkey and the European Union (EU) and to deeper integration abolishing barriers of trade until today. Subsequently an evaluation of the influence of the customs union follows in chapter 3 which constitutes the main part of the paper. Hereby the analysis is divided into the short-term static and long-term dynamic effects of the CU with the EU that Turkey entered on 1st January 1996. To analyze the static effects this paper adopts Viner's traditional approach, by comparing the trade creation effects with the trade diversion effects resulting from the removal of trade restrictions for Turkey and the EU as a whole. Thus, the predominant economical theory applied in this paper is the neoclassical customs union theory. This theory was chosen because it still is the predominant and widely recognized theory in analyzing trade data providing a variety of tools. Within the neoclassical theory Ricardo as well as Heckscher-Ohlin play an important role as a tool of analysis. In the relevant passages in the text the most important theoretical principles will be explained with the help of the Turkish example. At the limits of the neoclassical theories the new trade theory is supposed to help out especially where the assumptions of the neoclassical theory limit further analysis. It is the purpose of this paper to analyze the question how the trade liberalization in form of the CU between Turkey and the EU influences the development of Turkish welfare, specialization in different sectors, economies of scale, competitiveness, technological transfer and direct foreign investment. In some parts of the paper the analysis also refers to some effects for the EU, bu

What has been achieved regarding Turkey’s efforts at integration to the EU and what obstacles remain to it achieving full membership? Like other developing countries, Turkey displays visible signs of advancement with rapid increases in living standards, greater mobility and the rapid spread of technology. Much of its legislation and political, economic and administrative systems are also now aligned to the EU and this process has undoubtedly contributed to democratization and modernization. At the same time problems in politics and society persist; the Gezi protests, limitations of freedom of expression, frequent occupational accidents in the mining and construction sectors, honour killings and political upheaval which has manifested itself most starkly with the recent coup attempt all call attention to the challenges facing a country in the process of change. Charting the political, legal and economic relations between Turkey and the European Union since 1959 this book explores the relationship through phases such as association, customs union and candidacy. Each chapter covers a particular period in the relations and/or a theme which has both current and overall relevance to the conduct of the relations. In this way, the authors examine the impact of the EU in affecting change, what has been achieved and the obstacles that remain.

Inhaltsangabe:Abstract: This working paper shall investigate the trade integration between Turkey and the EU. The plan of this book is as follows. At first the historical background of the development concerning the trade relations between the two parties is conveyed. This includes the period from first association to implementing a customs union (CU) between Turkey and the European Union (EU) and to deeper integration abolishing barriers of trade until today. Subsequently an evaluation of the influence of the customs union follows in chapter 3 which constitutes the main part of the paper. Hereby the analysis is divided into the short-term static and long-term dynamic effects of the CU with the EU that Turkey entered on 1st January 1996. To analyze the static effects this paper adopts Viner s traditional approach, by comparing the trade creation effects with the trade diversion effects resulting from the removal of trade restrictions for Turkey and the EU as a whole. Thus, the predominant economical theory applied in this paper is the neoclassical customs union theory. This theory was chosen because it still is the predominant and widely recognized theory in analyzing trade data providing a variety of tools. Within the neoclassical theory Ricardo as well as Heckscher-Ohlin play an important role as a tool of analysis. In the relevant passages in the text the most important theoretical principles will be explained with the help of the Turkish example. At the limits of the neoclassical theories the new trade theory is supposed to help out especially where the assumptions of the neoclassical theory limit further analysis. It is the purpose of this paper to analyze the question how the trade liberalization in form of the CU between Turkey and the EU influences the development of Turkish welfare, specialization in different sectors, economies of scale, competitiveness, technological transfer and direct foreign investment. In some parts of the paper the analysis also refers to some effects for the EU, but main emphasis shall clearly be laid upon the effects on the Turkish economy. For the analysis foreign trade data is used which was compiled by the Turkish Undersecretariat of the Prime Ministry for Foreign Trade, the Prime Ministry Undersecretariat of Treasury, the Turkish Statistical Institute and Eurostat. Finding the adequate data created difficulties because of different time spans available and data from different sources being not comparable. [...]

The inclusion of agricultural products in the current customs union is one of the potential future steps on the road to further political and economic integration between Turkey and the EU. This book examines the effects of such integration of agricultural markets on the Turkish agricultural sector as well as on consumers and the Turkish budget. Results are compared to alternative options for Turkish agricultural policy. To this aim, a detailed partial equilibrium model of the Turkish agricultural sector is developed. The complete liberalization of the agricultural sector is found to lead to significant welfare gains compared to the maintenance of current policies. It appears that including agricultural products in the customs union results in similar results with few but significant exemptions.

This paper seeks to explain why, in May 2015, the European Union (EU) and Turkey have chosen to modernize their Customs Union instead of directly completing Turkey’s accession process, how they will most likely do so, and the implications thereof for Turkish EU membership. I argue that Turkey and the EU seek to modernize the Customs Union because of the EU’s increased quest for bilateral free trade agreements after the failure to conclude the Doha Development Round, the flawed implementation of the institutional provisions of the 1963 Ankara Agreement, and the stalemate in EU accession negotiations. The Customs Union is likely to be modernized by liberalizing agriculture, services and public procurement and by improving the implementation of the 1963 Ankara Agreement. The modernized Customs Union will most probably be the institutional basis for EU-Turkey relations in the near future. However, in a better future conjuncture of bilateral relations, it may then serve as a further step for Turkey’s accession to the EU.