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Potential Effects of the T-TIP on Turkey's Motor Vehicles and Parts Sector

Author

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  • Abdullah Emre Akel
  • Aylin Ege

Abstract

The aim of this article is to quantify the possible effects of a potential T-TIP between the US and the EU on production and exports of Turkey’s motor vehicles and parts sector. A partial equilibrium model is used to this end under two scenarios, the first one assuming only T-TIP, whereas the second one supposing a simultaneous free trade agreement between the US and Turkey. The simulations are based on the reductions in tariffs and nontariff barriers between the T-TIP partners in the first scenario, and between the US and Turkey, as well in the second scenario. The simulation results indicate that the prospective effects on the sector's production and exports differ significantly depending on different levels of integration. The results also reflect decreasing net welfare for Turkey and that a free trade agreement with the United States does not offer a significant market access potential for Turkey because of its production structure. Keywords: T-TIP, Turkey, GSIM, Motor vehicles and parts sector. JEL: F02, F15, F17, L62. Potencijalni efekti T-TIP-a na sektor motornih vozila i delova u TurskojCilj rada je kvantifikovanje mogućih efekata potencijalnog T-TIP-a između SAD-a i EU na proizvodnju i izvoz turskog sektora motornih vozila i delova. Da bi se to postiglo, koristi se delimični model ravnoteže u dva scenarija, prvi pretpostavlja samo T-TIP, dok drugi istovremeno pretpostavlja i sporazum o slobodnoj trgovini između SAD-a i Turske. Simulacije se zasnivaju na smanjenju carina i necarinskih barijera između T-TIP partnera u prvom scenariju, kao i između SAD-a i Turske, u drugom scenariju. Rezultati simulacije pokazuju da se potencijalni efekti na proizvodnju i izvoz sektora značajno razlikuju u zavisnosti od različitih nivoa integracije. Rezultati takođe odražavaju pad neto blagostanja za Tursku i ukazuju da sporazum o slobodnoj trgovini sa SAD-om Turskoj ne nudi značajan potencijal pristupa tržištu zbog njene proizvodne strukture. Ključne reči: T-TIP, Turska, GSIM, sektor motornih vozila i delova.

Suggested Citation

  • Abdullah Emre Akel & Aylin Ege, 2019. "Potential Effects of the T-TIP on Turkey's Motor Vehicles and Parts Sector," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 66(4), pages 507-523.
    • Handle: RePEc:voj:journl:v:66:y:2019:i:4:p:507-523:id:570
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    More about this item

    Keywords

    T-TIP; Turkey; GSIM; Motor vehicles and parts sector;
    All these keywords.

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F15 - International Economics - - Trade - - - Economic Integration
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment

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