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Abstract

Turkey established a customs union (CU) with the EU in 1996, which excludes agricultural products. This article analyses the effects of an inclusion of agriculture in the CU as well as alternative policy options on the Turkish agricultural sector. To this aim, a comparative-static, partial equilibrium model of the Turkish agricultural sector is developed. The complete liberalisation of the agricultural sector leads to significant comparative static welfare gains of about ~670 million compared to the continuation of current policies. For most products an inclusion of agriculture in the CU leads to similar results as the complete liberalisation of agricultural trade.

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