ABSTRACT

Today there are many examples of free trade areas in various parts of the world established for economical, political and safety reasons. In this context on June 10th, 2010 a decision has been taken to establish a free trade area in one of the most strategically important regions of the world, namely Middle East, among Turkey, Syria, Lebanon and Jordan within the 3rd Turkish-Arabian cooperation forum.

This research investigates the international trade potential between the 4 countries using the gravity model framework. The results indicate that there is currently less trade among these countries than the gravity model would predict, therefore establishing a free trade area means a trade surplus for Turkey.