31st Meeting of the EU-Turkey Joint Consultative Committee

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EU-Turkey Trade Relations

• 31st Meeting of the EU-Turkey Joint Consultative
  Committee

Dimitris Tsarouhas Jean Monnet Chair Assistant
Professor, Department of IR Bilkent
University www.bilkent.edu.tr/dimitris
20 December 2012, TOBB
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Presentation Outline

• Free Trade an Evolving Idea
• The EUs Trade Policy
• EU-Turkey Trade Relations
• Global Business Bridges Innovative Initiatives
  Adding Value to the EU-TR Partnership

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Free Trade An Evolving Idea

• 1701, Considerations Upon the East India Trade
  (Henry Martin) Technological progress and
  imports allows for an efficient use of resources
• 1817 David Ricardo Comparative Advantage, trade
  as a non-zero sum game
• Mid-19th Century repealing the UK Corn Laws, the
  Cobden-Chevalier Treaty of 1860 MFN Clause
• Free Trade reliant on ideology and interests
• This is a fragile coalition at best (e.g.
  Interwar period, protectionism in most of Europe
  till 1945).
• Bretton Woods and WTO trade as a
  welfare-generating mechanism

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The EUs Trade Policy

• Goal to create a fair and open trade system by
  use of WTO mechanisms and procedures
• Assessment benefits of globalization and open
  markets outweigh the costs
• How? Generates growth, reduces prices and
  enhances quality, offers more employment
  opportunities (trade sector employs 18 of EU
  workforce)
• The EU accounts for 20 of global exports and
  imports
• EU imports more agricultural products from the
  developing world than the US, CAN, AUS, JPN, and
  NZ put together
• EU and M-S account for more than half of all
  development aid
• EU trade market share 19.4 (US 12.5, Japan
  8).
• Trade volume doubled from 1999 to 2010

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EU-TurkeyTrade RelationsOverview

• Economic Relations date back to the 1963
  Association Agreement enhancing economic and
  trade relations
• 1970s Additional Protocol, 1996 Customs Union
• EU Turkeys No.1 imports and exports partner
  Turkey Europes 7th largest importer and 5th
  largest exporter
• Turkey exports machinery and transport equipment
• EU exports machinery, transport materials,
  chemical products and manufactured goods
• EU primary source of FDI in Turkey (75)

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EU Trade with Turkey Going Strong Despite The
Crisis
Year Imports (in mill. of ) Share of Total Imports Exports (in mill. of ) Share of Total Exports
2008 45.960 2.9 54.093 4.1
2009 36.197 3.0 44.101 4.0
2010 42.323 2.8 61.253 4.5
2011 47.588 2.8 72.588 4.7
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Turkeys Trade with the EU Robust Despite the EU
Crisis
Year Imports (mill. of ) EU Share of Total Imports Exports (in mill. of ) EU Share of Total Exports Trade
2007 49.910 40.8 43.974 56.8 93.884
2008 50.559 37.3 42.916 47.9 93.475
2009 40.432 40.5 33.585 45.9 74.017
2010 54.610 39.3 39.754 46.3 94.364
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EU Remains Turkeys Most Important Trade Partner
By Far

• Turkeys Imports Partners Turkeys
  Exports Partners Major
  Trade Partners
• 1) EU-27 54.610 39.3
  1) EU-27 39.755 46.3 1)
  EU-27 94.364 42.0
• 2) Russia 16.291 11.7
  2) Iraq 4.564 5.3
  2) Russia 19.788 8.8
• 3) China 13.000 9.4
  3) Russia 3.497 4.1 3)
  China 14.715 6.5
• 4) USA 9.338 6.7
  4) USA 2.906 3.4
  4) USA 12.244 5.4
• 5) Iran 5.791 4.2
  5) UAE 2.522 2.9
  5) Iran 8.092 3.6

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Global Business Bridges

• Promoted by the EUD a Positive Business Agenda
• Aims to facilitate EU-Turkey business matchups,
  reaping the benefits of the CU
• Economic and investment synergies of enterprises
• Joint Ventures in neighbouring markets
• A win-win approach, supported by M-S and TR
  authorities (TOBB, MoE etc.)
• Aims business alliances, PP partnerships,
  technology and know-how transfer, cross-border
  service provisions, joint investments and ventures

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Global Business Bridges II the Salience of
Synergy

• Target Regions Phase 1 Tunisia, Egypt, Palestine
• Target Regions Phase 2 Iraq, Kazakhstan,
  Azerbaijan
• Arab Spring and global political change pose huge
  challenges to economic governance
• EU-TR partnership a uniquely placed stabilizing
  factor
• Ideal to facilitate investment, support local
  infrastrcuture and promote a business-friendly
  environment