ABSTRACT
After pursuing inward-oriented development strategies for 50 years, Turkey has begun switching to outward-oriented policies since the 1980s. The policy of opening up the economy was pursued with the aim of integrating into the world economy through meeting the requirements of membership in the World Trade Organization (WTO) and close association with the European Union (EU). The latter has also driven multilateral liberalization simply because-in contrast to preferential arrangements with now-EU members from Central Europe-it has entailed the establishment of a customs union between Turkey and the EU beginning in 1996 rather than bilateral reductions in tariff rates. The implementation of a customs union agreement with the EU has resulted in the adoption by Turkey of the EU’s much more liberal most-favoured nation (MFN) tariffs on industrial products. This in turn has dramatically increased the openness of the Turkish economy over the last decade. Turkey’s applied MFN tariff rates for industrial products, the same as those in the EU’s Common External Tariffs, represent now one of the lowest, if not the lowest, levels of MFN tariff protection among economies at a similar stage of economic development.
