The Impact of the Support System of the CAP on Free Trade in the Light of the Turkey's EU Membership

by Akalpler, Ergin, PhD

The objective of this study is to measure the level of the European Union’s (EU) Common Agricultural Policy (CAP) price support system (PSS) applied to producers in the EU-15 and in Turkey. The producer subsidy estimate (PSE) method has been used to determine protection levels for selected cereal products from the beginning of the application of the PSE method in 1986 to date. In addition, this study attempts to examine the empirical findings of the PSE in the light of CAP reforms and EU enlargements during the period 1986- 2003. The expected contribution of this study is to determine which support instruments, such as countervailing levies or direct payments (based on limited or unlimited area) against export subsidies, voluntary or compulsory set-aside measures and price interventions, are more appropriate for the CAP in reducing destabilizing effects on trade with selected products between the EU and Turkey with respect to distribution effects (how income is distributed between different groups involved in the production operation process). Does the current PSS of the CAP have positive effects on agricultural producers in Turkey as a non-member country? The major finding of this dissertation is the evaluation of benefits and costs of common agricultural policies of the EU on fair trade. The assessment of the PSE of the EU’s CAP will be used to determine the impact of current support measures of the CAP reforms on fair trade and consumer welfare, and how the CAP measures can be reformed for the improvement of producer gain in accordance with fair trade.