Subject and purpose of work: This study analyzes Türkiye’s trade flows with its primary trading partner, the European Union, by focusing on three key areas: the factors driving trade, the trade efficiency, and the trade potential. Materials and methods: Utilizing a stochastic frontier gravity model, the research analyzes panel data for Türkiye and 27 EU member states covering the period 2002–2023. Results: Findings indicate that Türkiye's GDP and institutional quality index, alongside the population, real effective exchange rate, and economic freedom index of EU countries, exert a positive impact on bilateral trade flows. Conversely, Türkiye’s population, the institutional quality index of EU countries, and geographical distance are found to diminish trade volumes. Furthermore, time-varying technical efficiency scores were calculated for each country, revealing a wide variation ranging from approximately 3% to 95%. Conclusions: Results demonstrate that Türkiye possesses a trade potential significantly exceeding its current levels with EU partners. This study offers critical insights for policymakers regarding foreign trade strategies.