Effects of including agricultural products in the customs union between Turkey and the EU [Elektronische Ressource] : a partial equilibrium analysis for Turkey / vorgelegt von Harald Grethe

Institut Für Agrarökonomie

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• Publié par: georg-august-universitat_gottingen
• Publié le: 01 janvier 2004
• Nombre de lectures: 19
• Langue: English
• Poids de l'ouvrage: 1 Mo

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Effects of Including Agricultural Products in the
Customs Union between Turkey and the EU
A Partial Equilibrium Analysis for Turkey


Dissertation
zur Erlangung des Doktorgrades
der Fakultät für Agrarwissenschaften
der Georg-August-Universität Göttingen


vorgelegt von
Harald Grethe
geboren in Buchholz i. d. Nordheide



Göttingen, im April 2003


Gefördert von der Deutschen Forschungsgemeinschaft

This thesis is published under the same title at Peter Lang Publishing Group
(www.peterlang.com). Page numbering and page breaks are identical. Format allows for two
pages on one A4 page printing.

















D 7
Referent: Professor Dr. S. Tangermann
Korreferent: Professor Dr. S. von Cramon-Taubadel
Tag der mündlichen Prüfung: 23. Mai 2003

ACKNOWLEDGEMENTS
Many people have contributed to this work; they are too numerous to be all
mentioned here. The early investigative stages of my work were part of a FAO
policy reform project located in Ankara. While working in Turkey, I was
supported by many people in gathering information and understanding Turkish
agriculture and agricultural policies. To all of them I want to express my
thankfulness and my appreciation for their warm hospitality, which I enjoyed so
much.
Tayfur Caglayan and his staff members at the Research Planning and
Coordination Council of the Ministry of Agriculture and Rural Affairs (MARA)
provided much support at the early stage of my work and Don McClatchy was
an extremely supportive project leader. Selma Aytüre and Ayse Demirtas at
MARA organized many meetings in Ankara, to which they also accompanied
me. Many people at the Undersecretariat of Foreign Trade (UFT) provided
information on agricultural trade policies. Special thanks are due to Fisun Aktug
and her staff members at the General Directorate of EU Affairs (UFT) who
helped me to understand the complex structure of preferential trade rules
between Turkey and the EU. Ermine Kocberber from the State Institute of
Statistics (SIS) and her staff members provided data as of then unpublished, and
background information on how data is collected. Sezmen Alper and Buket
Teumann at the Exporters' Union at Izmir organized meetings with many traders
and processors of agricultural products and provided a great amount of
information. Also, thanks are due to Halis Akder and other academics at Ankara
whose experience and knowledge of the agricultural sector in Turkey was
invaluable.
Later stages of my work were generously supported by the Deutsche
Forschungsgemeinschaft. During this time I relied much on unpublished or out-
of-print data at the SIS. Especially, Aysun Karabulut at the Agricultural
Statistics Division and Özlem Sarica at the Income and Expenditures Division
helped me enormously with collecting information, finding my way in SIS, and
discussing availability, sample procedures, and reliability of data. I am grateful
for their persistent willingness to accept my time-consuming, never-ending
questions, and my "data-hunger". Mehmet Azgin at the UFT helped me several
times by providing recent and historical data on Turkey’s import tariff schedule.
Special thanks are due to Ayse Uzmay at the agricultural faculty of the Aegean
University in Izmir, who helped me a great deal with collecting data and more
informal information from various sources not always easily accessible.
5At the Institute of Agricultural Economics in Göttingen, Rainer Marggraf and
Stephan v. Cramon-Taubadel made helpful comments as referee at an early
stage of the work and as second supervisor, respectively. Jochen Meyer
introduced me to econometrics in GAUSS, as did Martin Banse with
programming TURKSIM in GAMS. I am grateful for their support. It was
especially comforting to know that Martin was just one door away from mine,
and in case of seemingly unsolvable "execution errors" it always helped to enter
his room with a desperate expression on my face. Susanne Hagge supported me
in the cumbersome task of data processing. And, during the last stage of the
work, Stephan Nolte efficiently helped me with various small and large last
minute problems. Martin Banse, Fritz Feger, and Andrea Wälzholz read parts of
the manuscript. I am grateful for all their thorough comments and suggestions as
well as their readiness for long and fruitful discussions throughout my time in
Göttingen. Petra Geile and Ann Hartell both read the manuscript completely and
thoroughly checked on language and editorial aspects. To all of them, and many
others not listed here, I want to express my gratitude. Remaining errors, of
course, are mine.
Special thanks are due to Stefan Tangermann my academic teacher, who
supervised my dissertational work. I am grateful for his advice, constructive
criticism, and support, and his enormous and sustained readiness to discuss and
think things through continuously, which contributed a lot to such a pleasant
time in Göttingen, also beyond the work on my thesis.
Final thanks to my wife Kathelijne, who took over a great deal of my share in
family tasks, especially during the last year of my work on this project.

Bühren, December 2003 Harald Grethe
6 PREFACE
While the European Union is in the process of implementing its largest round of
enlargement ever, to include ten new Member countries from mainly Central
Europe, consideration is already being given to the possibility of entering into
accession negotiations with Turkey. For the time being it is plainly impossible to
predict the future fate of a possible membership of Turkey in the European
Union, but there is no doubt that this is a politically highly significant project for
both sides. However, it is relatively safe to forecast that the economic
relationships between Turkey and the European Union will in any case intensify
in the years to come. One important factor in the economic links between
Turkey and the EU is the Customs Union between the two sides, in force since
1996.
The Customs Union does not yet extend to agricultural products. However,
significant parts of agricultural trade between the two partners are already
covered by various forms of preferences. Moreover, the agreement that
established the Customs Union requires both sides to work towards a
progressive extension of such preferential treatment in the agriculture sector. It
also, interestingly, commits Turkey to bringing its agricultural policies in line
with the EU’s Common Agricultural Policy where necessary to allow for a free
flow of such preferential trade. All these commitments to make further progress
on bilateral trade in agriculture, though, are not really firm, and a timetable was
not established. Yet, it is well conceivable that the dynamics of progressing on
the front of agricultural trade might intensify in the future, as one element of the
ongoing process of strengthening the political and economic ties between
Turkey and the European Union. The end point of a full inclusion of agriculture
in the Customs Union is certainly one possible option in this process.
For Turkey, where agriculture plays an important role in the overall economy
and for the social fabric in rural regions, such a development could have
significant implications. Yet, what precisely the impacts of a full inclusion of
agriculture in the Customs Union might be is a matter of debate. Would
agriculture in Turkey come under strong pressure as a result of competition from
farmers in the EU? Or are there gains to be made for Turkey’s farmers, from
gaining better access to the EU market? Which agricultural products would fall
into which of these two alternative categories? How would the different regions
in Turkey be affected? Would pressures arise to adjust agricultural policies in
Turkey to those of the EU? And if so, what are the options? How would the
overall economy fare?
7Questions like these can only be answered on the basis of a careful empirical
analysis, and the complexity of agricultural markets with the close substitution
and complementarity relationships across products have to be considered as well
as the specifics of price formation in the context of changing trade flows. At the
same time the requirement of adopting appropriate policy measures has to be
kept in mind, at both the domestic level in Turkey and in the context of the
international commitments in the framework of the World Trade Organization.
In his doctoral dissertation that is published here, Harald Grethe has not shied
away from the demanding task of including all these complexities in his analysis
of the issues. He has dealt in a competent manner with both the quantitative
analysis of the market and welfare implications and the ramifications for
agricultural policy making and international trade policy. The research presented
here is based on extensive knowledge of the situation on the spot in Turkey, and
has benefited from the insights