Assessing the economic implications of Turkish accession to the EU

Arjan Lejour (), Ruud de Mooij and C.H. Capel

CPB Documents from CPB Netherlands Bureau for Economic Policy Analysis

Abstract: We explore the economic implications of the possible Turkish accession to the European Union. We focus on three main changes associated with Turkish membership: (i) accession to the internal European Market; (ii) institutional reforms in Turkey triggered by EU membership; and (iii) migration in response to the free movement of workers.

Overall, the macroeconomic implications for EU countries are small but positive. This is caused by cheaper imports and the benefits from trade creation. Dutch exports increase by around 20% (550 million euro). Turkey experiences larger economic gains than the EU: consumption per capita is estimated to rise by about 4% as a result of accession to the internal market and free movement of labour.

If Turkey would succeed in reforming its domestic institutions in response to EU membership, economic growth in Turkey could increase more. In particular, tentative estimates suggest that consumption per capita in Turkey could raise by an additional 9%. These benefits would spill over to the EU. For instance, Dutch exports to Turkey would rise by another 1.8 billion euro and income by 500 million euro.

Keywords: Turkey; europe; EU; EU enlargement; trade; gravity equation; applied general equilibrium model; AGE model; migration; regional economics; regional economic integration (search for similar items in EconPapers)
JEL-codes: F13 F15 F22 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eec
Date: 2004-03
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Persistent link: http://EconPapers.repec.org/RePEc:cpb:docmnt:56

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