Turkey - EU Interactions analyzed with CAPRI-RD

Transcription

1 Turkey - EU Interactions analyzed with CAPRI-RD Erol Cakmak Nadir Ocal Hasan Dudu Project conference Novotel Leuven Centrum th February 2013

2 Background TR-EU / General Agreement on the association between Turkey and the EEC (the "Ankara Agreement") in 1963 Application for full membership in 1987 Recognized eligibility but deferred, intensify relations through Customs Union Association Council decision 1/95 on : Customs Union between TR and the EU in industrial and processed agricultural goods established. EU made a declaration on financial cooperation with Turkey as part of the customs union "package". Excluded from the enlargement in 97. Eventually, Turkey was officially recognised without any precondition as a candidate in 1999! Still no date!!!

3 Background TR-EU / Agriculture Basic agricultural products were excluded from the CU, preferential trade regime for these products has been going on since CU. Ag pols of TR approached EU during the Agr. Reform Implementation Project (ARIP), between Partially decoupled budgetary support. Shifted to more coupled since Protection high, compatible with EU s protection. Macroeconomic stabilization helps. Ag chapter and 7 others are suspended because of objections and Cyprus and France The impact assessment of FTA in agr and accession was hot in Not so hot, but still relevant to give an idea about the potential impact under the changing conditions of world ag, changes in EU & TR ag policies.

4 Overview of Turkish Agricultural Sector

5 Scenarios FTA: Extend trade in agri-food beyond preferential trade CU in agrifood ACC: FTA + Pillar 1 payments 60 per ha. decoupled payment

6 Results: Welfare Overall welfare gains for both EU and Turkey, 0.03 and 0.44% respectively No significant difference between two scenarios! Agricultural income in Turkey increase under both scenarios (but effects of Accession scenario is significantly higher for Turkey (due to pillar I payments), it declines slightly for EU.

7 Product Balance Changes in production Highest change is in oilseeds: -7% under ACC Fallow increases by 2% under ACC, Other agricultural activities do not change much. Changes are rather small under FTA. Turkey is still a net exporter, but the composition changes. Trade deficit in cereals deteriorates around 30-40%. Net trade in vegetables and fruits improves around 6.2% under both scenarios. Trade balance in livestock also improves by 26% mostly due to dairy and meat trade!

8 Trade Imports of Turkey from EU increases, except for oilseeds and oilcakes. Oilseeds trade shifts to Oil trade! Turkish demand for oilseeds decline as demand for oils increase from all regions! Trade diversion to EU is observed only in cereals and Livestock. Turkish Exports to EU also boosts. Results are close under both scenarios. Increases in Vegetables and Permanent Crops and Livestock are quite significant!

9 Price Changes in prices are as expected: Decline for all commodities, except for Veg. & Perm. Cr. Look at prices of Oil: Import price declines (hence consumer prices follow) Export price increase (hence prod. Prices follow)

10 CGE results The effects in CGE are quite small! Impact direction depends on scenario Under ACC, EV is positive, but negative under FTA HH income, savings and consumption increase under ACC, decrease under FTA Production increases in all sectors under ACC, while it declines under FTA

11 RD Measures: Example Employment in secondary and tertiary sector declines under ACC while it increases under FTA Share of services in GVA declines ACC scenario increases agricultural employment inline with increase in production Employment in secondary and tertiary sector - [Mio persons] Share of employment in secondary and tertiary sector - [%] Share of hotels and restaurants on GVA - [%] Share of services on GVA - [%] MTR_RD TUR_ACC TUR_EU_FTA % 1.59% % 1.07% % 0.00% % 3.85%

12 Conclusion Changes in Livestock sector is interesting: Exports increase more than imports! Consumers are definitely better off! Veg. & Perm. Cr. producers are better off! Oilseeds are the most affected activity CGE results are small and different under ACC and FTA scenarios. Turkey wins under ACC, while loses under FTA!