Abstract:

Through liberal policies in foreign trade and the export-oriented industrialization strategy, Turkey has gained the status of an outward-oriented country since the 1980s. After the custom union signed with EU in 1995, this policy had wider opportunity to application.The CU has made it possible for Turkey to enter the EU and the global markets with an advantageous position. However, it has also opened Turkey’s domestic markets into the EU’s fierce competitive environment. Through this agreement, efforts to align Turkish economy with the standards of global liberal economy have gained pace, and the process of integrating into global markets has been encouraged. However, since this agreement has been the first and only one signed in the fullmembership accession period, it has brought about numerous debates as to how Turkey would be affected by the process. In this study, the static effects of the CU on Turkish foreign trade in the period between 1995 and 2013 are examined. The study led to the conclusion that Turkey has failed to fully benefit from the static wealth effects that it had originally expected from the CU

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