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EU-Turkey Trade Relations

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. Presentation Outline. Free Trade: an Evolving Idea

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EU-Turkey Trade Relations

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  1. 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

  2. Presentation Outline • Free Trade: an Evolving Idea • The EU’s Trade Policy • EU-Turkey Trade Relations • Global Business Bridges: Innovative Initiatives Adding Value to the EU-TR Partnership

  3. 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

  4. The EU’s 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

  5. EU-TurkeyTrade Relations:Overview • Economic Relations date back to the 1963 Association Agreement – enhancing economic and trade relations • 1970s Additional Protocol, 1996 Customs Union • EU Turkey’s No.1 imports and exports partner; Turkey Europe’s 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%)

  6. EU Trade with Turkey: Going Strong Despite The Crisis

  7. Turkey’s Trade with the EU: Robust Despite the EU Crisis

  8. EU Remains Turkey’s Most Important Trade Partner: By Far Turkey’s Imports Partners Turkey’s 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%

  9. 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

  10. 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

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