Evaluation of the EU-Turkey Customs Union
The implementation of the customs union (CU) in 1995 was the culmination of thirty-two years of association between the European Union (EU) and Turkey and was expected by Turkey to be the first step in the EU accession process. The CU has been a ma...
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| Format: | Foreign Trade, FDI, and Capital Flows Study |
| Language: | English en_US |
| Published: |
Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2014/03/20252590/evaluation-eu-turkey-customs-union http://hdl.handle.net/10986/20444 |
| Summary: | The implementation of the customs union
(CU) in 1995 was the culmination of thirty-two years of
association between the European Union (EU) and Turkey and
was expected by Turkey to be the first step in the EU
accession process. The CU has been a major instrument of
integration for the Turkish economy into both European and
global markets. The CU covers trade in just industrial goods
(including the industrial components of processed
agricultural products) and excludes primary agriculture,
services, and public procurement but has proved to be a
powerful force of regulatory convergence. The evaluation s
objectives are to assess the impacts of the CU and to make
forward looking, solution-orientated recommendations for its
improvement with an emphasis on the economics behind the
various trade irritants and options for dealing with
problems related to asymmetries as well as examining the
case for widening. The evaluation provides quantitative and
qualitative estimates of the effects of the CU and
demonstrates that the trade agreement has been highly
beneficial for both Turkey and the EU. The evaluation
consists of two main parts: (i) an evaluation of the impact
of the CU on trade, foreign direct investment (FDI), and
more broadly, welfare in Turkey through the effects it has
had on trade policy, eliminating the need for rules of
origin (ROOs) on preferential trade with the EU and
implementing the acquis in areas covered by the CU; and (ii)
a review of current limitations of the existing trade
arrangement, potential gains in dealing with these as well
as modalities for reform. The evaluation has six sections.
Section one gives introduction. Section two reviews trade
and investment outcomes between the EU and Turkey. Section
three examines the effects the CU has had on the trade
policy environment for Turkey. Section four provides an
overview of EU-Turkey trade relations in terms of Turkey s
harmonization with EU regulations and use of trade defense
instruments. The fifth section examines the potential
impacts of widening the trade arrangement to cover new areas
in agriculture and services and makes proposals for the
modalities that can be used to include these as part of an
agreement including in the context of full accession.
Section six presents conclusions and recommendations. |
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