Does Turkey have a special trade relation with the EU?: A gravity model approach

We apply the gravity model to Turkey's trade flows over 1967-2001. First, we check whether this model fits Turkey's geographical pattern of trade in goods. Second, provided that the model works, we assess whether Turkey already has a “special” trade relation with the EU, namely whether merchandise exchanges between the two parties exceed what the gravity approach predicts. The main findings are: (i) the gravity model provides a good fit of Turkey's trade patterns, and (ii) despite the 1963 Association agreement and the customs union launched in 1996, there is no evidence of additional trade between Turkey and the EU.