Technological Structure of the Foreign Trade between Turkey & the EU

B. Ali Eşiyok, Senior Economist, Development Bank of Turkey

– August 20, 2013 – Sectoral Analysis: Technological Structure of the Foreign Trade between Turkey and the EU Introduction While Turkey was getting articulated to the world economy at the sectors the technological content of which was…

Introduction : While Turkey was getting articulated to the world economy at the sectors the technological content of which was low within the frame of the model “export-oriented growth” in the early 1980’s, the policies implemented in the ensuring years remained limited at converting the technological level of the production and export, and consequently the technological level of the EU oriented export of Turkey developed basically based on the low and medium technologies. This essay aiming to investigate the technological structure of the foreign trade performed between Turkey and EU has been fictionalized under three parts. While the place of EU at the foreign trade of Turkey is examined in the first part, the topic of the second part is constituted by the technological structure of the foreign trade between Turkey and the EU, and the findings of the study are included in the third and final part.

1. The Place of EU in the Foreign Trade of Turkey

When Table 1 indicating the place of the EU at the foreign trade of Turkey is examined, according to both the parameters of export and import, it is seen that the relative importance of the EU at the foreign trade of Turkey started to get eroded considerably after 1996 when the customs union came into force. In 1996, it is understood that the import rate of EU-27  countries which is 55.7 % within the import of Turkey got considerably eroded in due course, and regressed to the rate 37 % in 2012, and that the export share Turkey carried out to EU-27  countries in the same period decreased from the rate 54.1 % to the rate 38.8 %. Due to the increasing export performed to the EU countries by Turkey more regularly than the import, at the commerce carried out with the EU, the rate of the export to meet the import increased from the rate 51.7 % to the rate 67.7 % in the period 1996 – 2012. In other words, while the export performed to EU-27 countries between 1996 – 2012 is increasing annually at the rate averagely 11.2 %, import has increased annually at the rate averagely 10.3 %, and consequently, the import coverage ratio of export has gone up considerably. When it is examined as the absolute values, while the export of Turkey performed to EU-27 countries was 12,563 million dollars in 1996 when the Customs Union entered in force, when it was 2012, it increased at the ratio of 372 %, and went up from 12,563 million dollars to 59,241 million dollars. Besides, import increased at the ratio 260 % in the same period, and went up from 24,321 million dollars to 87,446 million dollars.

When the development of the foreign trade carried out between Turkey and EU-27 countries is evaluated in general, it is understood that the increases which have occurred recently at the total import of Turkey haven’t been caused by the import performed from European Union, and that it has been caused by the countries outside the EU especially by the Asian countries (Eşiyok, 2012: 79). In other words, Customs Union prevents Turkey to use the rights of sovereignty over the customs, and it causes the Asian countries to cover the internal market of Turkey with the cheap cost goods and the increasing foreign trade deficits.

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