The Economic Impacts of Turkish Accession to the European Union

Authors: Philippidis, George¹; Karaca, Orhan²

Source: The World Economy, Volume 32, Number 12, December 2009 , pp. 1706-1729(24)

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Abstract:

Half a century has passed and Turkey is no further toward achieving EU membership. Under the mandate of the Barcelona Declaration, EU-Turkish industrial tariffs will be abolished, whilst agro-food protectionism remains largely intact. Consequently, the direct impacts from a hypothetical EU accession scenario will be concentrated in agro-food sectors, whilst their share of economic output in Turkey implies `secondary' macro impacts.

To this end, a computable general equilibrium (CGE) framework is employed to quantitatively reassess full Turkish accession. Unlike previous CGE studies, agriculture, fishing and food sectors are disaggregated, whilst significant advancements to the `standard' model code are incorporated to capture the vagaries of agricultural factor, input and product markets. In addition, a realistic `baseline' scenario is constructed including `up to date' trade and domestic agricultural policy reforms prior to Turkish entry to the EU.

The results show that trade-led gains in Turkey are moderated due to tariff liberalisation prior to EU entry, whilst Turkey receives significant budgetary transfers from the CAP budget, which are `mirrored' as EU-27 costs. With additional migration effects, Turkish (EU-27) production possibilities fall (rise), whilst real income per capita rises (falls).

Document Type: Research article

DOI: http://dx.doi.org/10.1111/j.1467-9701.2009.01207.x

Affiliations: 1: Aragonese Agency for Research and Development (ARAID), Government of Aragón, Spain 2: Centre for Agro-Food Research and Technology (CITA), Government of Aragón, Spain

Publication date: 2009-12-01