CAN TURKISH AND US CO-OPERATION IN THE BLACK SEA REGION INCREASE EFFICIENCY GAINS?

Abstract

This paper examines the impact of co-operation between Turkey and the US upon Turkish trade and investments towards the Black Sea region. The study is particularly important in the conjuncture of the US withdrawal from the Transatlantic Trade and Investment Partnership (TTIP) and in the wake of signing a free trade agreement with the EU. An additional matter of importance relates to the improved Turkey – Russia economic collaboration especially after the “jet” incident and American involvement with the Middle East. Significant part of the latter is economic as the US has also explicit economic interests in the Eastern Meditteranean. A gravity model has been employed using ordinary least squares on a panel data with fixed effects to analyse aggregate trade. We have also categorized export groups of Turkey and the US separately. Our findings for both Turkish and the US exports indicate that per-capita GDP of Black Sea countries are highly persistent and positively correlated with increased efficiency gains and trade volumes. Regression results show that the US exports to the EU member countries are on average less than to those non-EU member Black Sea countries. Hence, we question whether a possible co-operation between the US and Turkish companies can help gaining better access to the Black Sea market for their exports.

Keywords

• trade
• gravity model
• turkey
• us
• black sea countries