 A Tale of (almost) 1001 Coefficients: The Deep and Heterogeneous Effects of the EU‐Turkey Customs UnionMario Larch, Aiko F. Schmeißer and Joschka Wanner Journal of Common Market Studies, 2021, vol. 59, issue 2, 242-260 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. Date: 2021 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:jcmkts:v:59:y:2021:i:2:p:242-260 Ordering information: This journal article can be ordered from Access Statistics for this article Journal of Common Market Studies is currently edited by Jim Rollo and Daniel Wincott More articles in Journal of Common Market Studies from Wiley Blackwell |
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