An Impact Analysis of Turkish Membership of the European Union

Karaca, O..; Philippidis, G.. An Impact Analysis of Turkish Membership of the European Union. Journal of International Trade and Diplomacy. 2009, Vol. 3(2), p. 1-2009.

Turkish relations with the European Union (EU) stretch back to 1959, although almost fifty years later, Turkey still holds ‘candidate’ country status. Evidence from computable general equilibrium (CGE) studies unanimously predicts trade led gains to Turkey from EU membership. This study also employs a CGE framework to examine Turkish accession, although a unique feature is that we focus on Turkish agro-food sectors, where most remaining bilateral tariff barriers are located. The quantitative impact of accession is estimated employing a realistic long run ‘baseline’, whilst additional policy shocks are incorporated to examine the timely issue of east-west migratory flows on Turkish agro-food performance, and real income growth in Turkey and the EU27. The model results show increases in Turkish agro-food production of between 5.3% and 6.9%. The largest percentage growth areas are in ‘meat processing’, ‘other meat processing’ and ‘vegetable oils and fats’, whilst in primary agriculture, there is greater ‘poultry’ and ‘cattle and sheep’ production. Notably, Turkey’s largest agro-food sector, ‘vegetables, fruits and nuts’ undergoes a slight decline in production due to higher tariff protection compared with the EU-27. Including the impacts of Turkish migration and the consequent reductions in the Turkish workforce, we see a priori declines in sectoral output compared with scenario 1. In conclusion, this study presents optimistic long run gains for Turkey, although one should not downplay the important costs of adjustment to Turkey in its transition to EU membership.