In the scope of the customs union between European Union and Turkey an application of the gravity model to the Turkish exports

Geographical distance, just as being a member of an economic bloc, is accepted as one of the important factors affecting international trade. To analyze the impact of distance on international trade, the economist have applied gravity model. According to the gravity model approach, the higher the growth rate of countries and the shorter the distance between those countries, the more they are likely to trade. Although the gravity model lacks theoretical foundations, it is preferred on bilateral trade flows because of its empirical success.European Union (EU), an important economic bloc of nowadays, is the most developed sample of a Customs Union (CU). A customs union between EU and Turkey was established on 6th March 1995 according to the Association Council Decision. The Association and the establishment of customs union between EU and Turkey as part of this association is based on the signing of the Ankara Agreement (1963) and the Additional Protocol (1970) by the parties. The CU came into force on 1st January 1996.By applying gravity model, this study looked at the impact of distance and CU membership on the Turkish exports within the scope of CU between EU and Turkey. The gravity model is applied on the first 20 EU countries, having the most shares in Turkish trade to the EU. In this context, this study is composed of three chapters. In the first chapter, the concept and theory of international economic integration and customs unions are discussed. In the second chapter, the economic effects of the CU and the concept of gravity model is explained. In the scope of the CU, the relation between EU and Turkey is studied in the last chapter. In the line with the purpose of this study, the last chapter refers also to the application of the gravity model on the Turkish exports to EU.