2020/05/21 by Mario Larch, Aiko Schmeißer, Joschka Wanner · 1 citation
Economics, Econometrics and Finance · #Global trade and economics #Fiscal Policy and Economic Growth #Global Financial Crisis and Policies
paper · pdf · doi:10.1111/jcms.13058
openalex publication_date 2020/05/21 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/02
Abstract In view of the deferred start of negotiations for the modernization of the customs union between the EU and Turkey (CU‐EUT), we looked back and analysed the ex post trade consequences of the CU‐EUT. Employing up‐to‐date econometric best practices for regional integration agreements, we quantified both the total and the heterogeneous trade effects of the CU‐EUT. In contrast with most previous studies, our results indicate that the CU‐EUT made a significantly positive, large and robust impact, implying there was an additional increase in EU‐Turkey trade in manufacturing by 55–65 per cent compared with that during the previously active Ankara Agreement. We also provide evidence that the CU‐EUT significantly increased Turkey's trade with non‐member countries of the CU‐EUT. Additionally, a substantial heterogeneity in the CU‐EUT effect was found across different industries as well as for each of its member countries and the direction of trade. We linked the heterogeneity of up to 911 coefficient estimates to the differences in initial trade costs and show that it cannot be ascribed to reductions in bilateral tariff rates.