The Impacts of Transatlantic Trade and Investment Partnership (TTIP) Initiative on Turkey’s Foreign Trade

Abstract

The aim of this study is to analyze the Transatlantic Trade and Investment Partnership (TTIP) on Turkey’s foreign trade. The aim of the TTIP is to remove all trade barriers in order to develop trade relationship between European Union (EU) and United States (US). TTIP will also have very important impacts of TTIP on third countries. These impacts are especially important for Turkey due to the Customs Union (CU) between Turkey and the EU. In this study, the effects of TTIP on exports and imports of Turkish manufacturing industry sectors are examined by using the SMART model of the World Bank. Our study points out that the effects of TTIP on Turkey depends on whether Turkey is included or not. Our results show that Turkey will benefit most if becomes a partner of Free Trade Agreement (FTA) between the US and the EU. However, if Turkey excluded from the FTA welfare will decrease mostly due to the trade deflection effect.