Turkey as an Open Economy:
Trading Partners
Serra Battaloğlu
Aysun Can
Özgenur Korlu
Elif Sercen Nurcan
Content
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Introduction of Trade Partners and Breakdown of Turkey’s Export-Import
Factors Affecting International Trade
Growth Graphs
Eurasia: Russia as a Trade Partner
European Union as a Trade Partner
Asia: China (PRC) as a Trade Partner
North America: US as a Trade Partner
Middle East: Iraq as a Trade Partner
Bibliography
Volume of Trade
450 000 000
400 000 000
350 000 000
Thousand $
300 000 000
250 000 000
200 000 000
150 000 000
100 000 000
50 000 000
0
Introduction of Trade Partners and
Breakdown of Turkey’s Export-Import
Exports by country, 2015 share in total exports (%)
Germany
United Kingdom
Others
Iraq
Italy
USA
Azerbaijan
Poland
China
Belgium
Israel
Romania
France
Switzerland
Spain
Egypt
Russia
Netherlands Saudi Arabia
Iran
UAE
Introduction of Trade Partners and
Breakdown of Turkey’s Export-Import
Imports by country, 2015, share in total imports (%)
China
Others
Germany
Czech Republic
Switzerland
Russia
Bulgaria
Netherlands
Romania
Poland
Japan
Belgium
Ukraine
United Kingdom
Spain
USA
Italy
India Iran
France
South Korea
China
Germany
Russia
USA
Italy
Germany
United Kingdom
Iraq
Italy
USA
TOP 5 EXPORTS BY
COUNTRY
TOP 5 IMPORTS BY
COUNTRY
Introduction of Trade Partners and
Breakdown of Turkey’s Export-Import
Introduction of Trade Partners and
Breakdown of Turkey’s Export-Import
Country
Exports to
Turkey
Imports from
Turkey
Volume of
Trade with
Turkey
Germany
21 351 984
13 418 068
34 770 052
China
24 873 452
2 414 932
27 288 384
Russia
20 399 806
3 589 464
23 989 270
Italy
10 639 077
6 887 871
17 526 948
USA
11 127 970
6 395 981
17 523 950
Basic Facts about Turkey’s Trade Items
The top export items of Turkey
are(*):
The
top
import
items
of
Turkey are(*):
- cars ($7.32 BN),
- gold ($16 BN),
-refined petroleum ($5.01 BN),
- refined petroleum ($15.9
BN),
-raw iron bars ($4.81 BN),
- cars ($9.3 BN),
-vehicle parts ($4.59 BN) and
- scrap iron ($7.19 BN) and
-delivery trucks ($4.27 BN).
- petroleum gas ($5.3 BN).
(*) According to the Observatory of Economic Complexity (OEC) report in 2014; at current US dollars for 2014; using the 1992 revision of the HS (Harmonized
System) classification.
Factors Affecting International Trade
• Regional Proximity (time cost reduction, historical relations)
• Trade agreements (reduction of tariff and nontariff barriers
[i.e. subsidies] to trade)
• Private sector relations (differences in trade policies,
construction booms, differences profit rates via intra-firm and
global competition, business strategies.)
• Economic complexity (differences in relative factor
endowment [comparative/absolute advantages])
• Socio-political developments (exchange rate trends)
• Fragmentation (ability to keep the final price as low as
possible via technical feasibility)
-10
-20
-30
-40
1923
1925
1927
1929
1931
1933
1935
1937
1939
1941
1943
1945
1947
1949
1951
1953
1955
1957
1959
1961
1963
1965
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015*
Percentage
Growth of Export
70
60
50
40
30
20
10
00
1923
1925
1927
1929
1931
1933
1935
1937
1939
1941
1943
1945
1947
1949
1951
1953
1955
1957
1959
1961
1963
1965
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015*
Percentage
Growth of Imports
120
100
80
60
40
20
00
-20
-40
-60
-20
-40
-60
2013
2010
2007
2004
2001
1998
1995
1992
1989
1986
1983
1980
1977
1974
1971
1968
1965
1962
1959
1956
1953
1950
1947
1944
1941
1938
1935
1932
1929
1926
1923
Percentage
Comparison
120
100
80
60
40
Growth of exports
20
Growth of Imports
00
1923
1925
1927
1929
1931
1933
1935
1937
1939
1941
1943
1945
1947
1949
1951
1953
1955
1957
1959
1961
1963
1965
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015*
Percentage
Proportion of Imports covered by
Exports (%)
200
180
160
140
120
100
80
60
40
20
00
Balance of Foreign Trade
20 000 000
0
Thousand $
-20 000 000
-40 000 000
-60 000 000
-80 000 000
-100 000 000
-120 000 000
Volume of Trade
450 000 000
400 000 000
350 000 000
Thousand $
300 000 000
250 000 000
200 000 000
150 000 000
100 000 000
50 000 000
0
Volume of Trade (logarithmic scale)
1000 000 000
100 000 000
10 000 000
1 000 000
100 000
10 000
1 000
100
10
1
Eurasia: Russia as an Trade Partner
Eurasia: Russia as a Trade Partner
Long history of trade between the Ottomans and Romanovs
Official bilateral trade agreement signed in 1934 between the Turkish Republic and USSR
•Positive political and economical relationship between the Bolshevik government and
revolutionary Ankara government between 1919-1945
•Joseph Stalin’s expansionist demands on Bosphorus after WWII and the subsequent
Cold War tensions between 1945-1989
•Open trade and reign of neoliberalist paradigm after the fall of Berlin Wall in 1989;
founding of Black Sea Economic Cooperation in 1992
•Recent militaristic tensions over Syrian civil war in 24 November 2015
Dominant factors affecting Turkish-Russian bilateral trade:
•Geographical proximity (time cost reduction [shuttle trading, tourism])
•Economic complexity (factor endowments [labor intensive TR intermediary goods vs
RUS primary goods])
What Turkey exported to Russia
in 2014 (2014 total value
$6.36 BN at current US
dollars for 2014; 3.8% of
total exports in 2014):
1.
Agricultural products (22%)
2.
Textiles (21%)
3.
Automobile
industry
products (18%)
4.
Electronics
and
machinery(15%)
5.
Chemicals (8%)
6.
Processed metal (4%)
7.
Plastics (3%)
8.
Ready-made clothing (3%)
9.
Furniture (2%)
10. Processed food (2%)
11. Construction materials (1%)
12. Processed wood products
(1%)
Turkish
Exports
Russian
Federation
1995-2014,
at current
US for
dollars
Turkish Exports
toto
Russian
Federation
betw.betw.
1995-2014,
at current
US dollars
2014for
2014
What Turkey imported from
Russia in 2014 (2014
total value $14.7 BN at
current US dollars for
2014; 6.8% of total
exports in 2014):
1.
Petroleum (32%)
2.
Iron-steel (30%)
3.
Grains (10%)
4.
Chemicals (7%)
5.
Natural gas (5%)
6.
Seed oils (5%)
7.
Coal (3%)
8.
Paper (1%)
Turkish Imports from Russian Federation betw. 1995-2014, at current US
dollars for 2014
Aftermath of 24 November 2015 Russian Jet
Shootdown Incident
Economic sanctions: suspension of visa-free travelling, limits on Turkish residents and companies
doing business in Russia, restrictions on imports of Turkish products (except lemons*), restrictions on
exports of certain Russian products (exclusive Gazprom gas deal cancellation, no grain exports)
Imports from Russia(**):
2015 October: 15.17 BN at current USD for 2015
2015 November: 13.74 BN at current USD for 2015 (-9.4%)
2015 December: 16.86 BN at current USD for 2015 (+22.7%)
2016 January: 13.45 BN at current USD for 2016 (-20.2%)
2016 February: 11.89 BN at current USD for 2016 (-11.6%)
2016 March: 13.95 BN at current USD for 2016 (+17.3%)
*http://www.haberturk.com/ekonomi/ekonomi/haber/1161154-rusya-bir-tek-limona-yasak-koymadi
**According to TUIK Foreign Trade Reports 2015 October- 2016 March; at current US dollars
European Union as a Trade Partner
European Union as a Trade Partner
•Turkey’s largest trading partner worldwide is Germany. Not just Germany, but also
EU members like Italy, United Kingdom, France and Spain also important trading
partners of Turkey. This makes EU the number one import and export partner of the
Turkey, while Turkey ranks 7th in the EU’s top import and 5th in export markets.
•The EU and Turkey are linked by a Customs Union agreement, which came in
force on 31 December 1995.
•Turkey has been a candidate country to join the European Union since 1999, and
is a member of the Euro-Mediterranean partnership.
•Turkey's exports to the EU are mostly machinery and transport equipment,
followed by manufactured goods. When looking at machines, mechanical
appliances and vehicles, Turkey’s principal competitors outside the EU are the
central and eastern European countries (CEECs). Turkey faces stiff competition
from Poland in the trade with vehicles.
•EU exports to Turkey are dominated by machinery and transport material, chemical
products and manufactured goods.
European Union as a Trade Partner
European Union as a Trade Partner
Asia: China as an Trade Partner
Asia: China as an Trade Partner
The Development of Economic Relations in
Historical Perspective
•Recognition of PRC in 1971
•Kenan Evren visited China in 1982
“We could get rich if we can sell one orange to
every single Chinese...”
•Bilateral visits to each other via high level officials
in the 1990’s
•İncreasing economic relations in the 2000’s.
Asia : China as a Trade Partner
Main Export Items of Turkey:
Marble and
travertine, metal ores, chromium, copper, inorganic
chemical compounds, textile fibers, iron and steel
Main Import Items of Turkey: Wireless
telephone devices, automatic data processing
machines, television camera, audio-visual devices,
machinery ,plastics , organic chemicals
Imports from China , 2015
Asia : China as a Trade Partner
North America: US as a Trade Partner
North America: US as a Trade Partner
In 1927, diplomatic relations between Turkey and the US were established.
In 1947, Economic and Technical Cooperation agreement was signed which
implemented the Truman Doctrine. Turkey became the recipient of special
economic assistance.
In 1974, US Congress imposed an embargo on arms sales to Turkey after the
Cyprus invasion.
In the 2011 National Export Strategy reports of the US government, Turkey is
referred to as a “next-tier market” and that the trade relationship between
Turkey and the USA is expected to expand.
U.S. exports to Turkey include aircraft, iron and steel, agricultural goods, oil,
cotton yarn and fabric, and machinery. U.S. imports from Turkey include
vehicles, machinery, iron and steel and their products, agricultural goods,
travertine, and marble. Reported U.S. direct investment in Turkey is led by the
banking and manufacturing sectors.
What is the trade balance for Turkey to the United States?
Red- Imports
Blue- Exports
Data Source: The Observatory of Economic Complexity
Total $6.89B
Numbers denoted in %
TOTAL: $11.7B
Numbers denoted in %
Middle East: Iraq as a Trade Partner
Middle East: Iraq as a Trade Partner
Long history of trade between the Ottoman core and Iraqi periphery
Official bilateral trade agreement signed in 1932 between Turkish
Republic and Kingdom of Iraq
Continuation of relations after the fall of Iraqi monarchy in 1958 and
during Iraq-Iran War in 1980
UN imposed embargo period 1990-2003
Break down of the economic production infrastructure in Iraq due to
Second Gulf War and fall of Saddam Hussein
Recent construction projects, petroleum supply lines and commodity
exchange boom after the end of US occupation
What Turkey exported to Iraq in 2014
(2014 total value $10.8 BN at current
US dollars for 2014; 6.5% of total
exports in 2014):
1.
Primary food items (22%)
2.
Raw and processed metal
(18%)
3.
Machinery (15%)
4.
Processed food items (11%)
5.
Textiles (10%)
6.
Furniture (5%)
7.
Jewellery (5%)
8.
Plastics (4%)
9.
Paper (3%)
10. Chemicals (3%)
11. Construction materials (3%)
Turkish Exports to Iraq betw. 1977-2014, at current US dollars for 2014
Turkish Exports to Iraq betw. 2003-2014, at current US dollars for 2014
What Turkey
imported from Iraq in
2014 (2014 total
value $0.263 BN at
current US dollars for
2014; 0.12% of total
exports in 2014):
1. Gold (44%)
2. Refined
Petroleum
(38%)
3. Animal hides
(7%)
4. Scrap plastic
(5%)
5. Paint (2%)
6. Paper (1%)
7. Raw cotton
(1%)
8. Scrap
machinery
(1%)
9. Processed food
(1%)
Turkish Imports from Iraq betw. 1962-2014, at current US dollars for 2014
Bibliography
Growth of exports and imports data: TurkStat, Foreign Trade Statistics, February 2016;
http://www.turkstat.gov.tr/PreTablo.do?alt_id=1046
Turkish Export Destinations in 2015 Graph: http://www.turkstat.gov.tr/UstMenu.do?metod=temelist
Observatory of Economic Complexity report; http://atlas.media.mit.edu/en/profile/country/turkey
TR-EU Trade: Nowak-Lehmann, F, Herzer, D, Martinez-Zarzoso, I, Vollmer, S. (2007). The Impact of a Customs Union between
Turkey and the EU on Turkey’s Exports to the EU, JCMS Studies, 719-743.
Turkish Exports/Imports to/from Russian Federation/Iraq betw. 1995-2014, at current US dollars for 2014 graph and What Turkey
exports/imports to/from Russia/Iraq pie chart:: http://atlas.media.mit.edu/en/visualize/stacked/hs92/export/tur/rus/show/1995.2014/
Turkey Russia Energy Deals graph: Okan Yardımcı (PhD) http://enerjiuzmani.blogspot.com.tr/2015/07/july-08-2015-energycooperation-in_8.html
Economic determinants of free trade agreements:Scott L. Baier, Jeffrey H. Bergstrand
http://www.sciencedirect.com/science/article/pii/S0022199603000795
No import ban on lemons: http://www.haberturk.com/ekonomi/ekonomi/haber/1161154-rusya-bir-tek-limona-yasak-koymadi
Fragmentation: http://2012books.lardbucket.org/books/challenges-and-opportunities-in-international-business/s06-01-what-isinternational-trade-th.html