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GLOBALIZATION & FOREIGN TRADE

Explore the impact of globalization on trade, the importance of Trade in Value Added statistics, and the significance of trade in services statistics for Turkey's economy. Learn about Turkey's services trade, including tourism, logistics, and telecommunications.

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GLOBALIZATION & FOREIGN TRADE

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  1. GLOBALIZATION & FOREIGN TRADE SEPTEMBER 2013 Rahmet USLU Gülçinay MUMCU

  2. OUTLINE A- GLOBALIZATION & TRADE IN VALUE ADDED B- IMPORTANCE OF TRADE IN SERVICES STATISTICS September2013 Ministry of Economy

  3. A- GLOBALIZATION & TRADE IN VALUE ADDED September2013 Ministry of Economy

  4. Trade in ValueAdded • Withglobalization, globalvalue chains (GVCs) have become a dominant feature of today’s global economy. • The (growing) process of international fragmentation,challenges our conventional wisdom on how we look at and interpret trade. • MeasuringTrade in ValueAdded is importantforunderstandingthesupplyside of tradeandidentifyingthesources of competitiveness. September2013 Ministry of Economy

  5. Trade in ValueAdded • Globalisation of productionnecessitatesnewtradestatisticsduetothefactthatcurrenttradestatisticsmayleadtomisguideddecisions. • The (last) exportercountrywhichmakesonlyassembly can be awardedwrongly as if it producesthefullcommercialvalue. • Inresponse, internationalinstitutionscarryoutstudiestodevelop a database of Trade in Value-Addedindicators. September2013 Ministry of Economy

  6. Trade in ValueAdded • “Trade in Value Added” and “Double Counting” September2013 Ministry of Economy

  7. Trade in ValueAdded • Apple’s Example Source: Trade İn Value-added: Concepts, Methodologies And Challenges (Joınt OECD-WTO NOTE) September2013 Ministry of Economy

  8. Trade in ValueAdded • Theindicators of trade in value-addedarederivedfrominput-outputtables. • Therearemanyongoingworkswhicharecarriedoutbyinternationalinstitutions in themeasurement of trade in value-added. • One of them is thejoint OECD-WTO Trade in Value Addedinitiative. • TherecentTrade in ValueAddeddatabasewasreleased in May 2013. September2013 Ministry of Economy

  9. Trade in ValueAdded • Trade in Value-Added (TiVA) indicatorsinclude: • Decomposition of gross exports by industry into their domestic and foreign content • The services content of gross exports by exporting industry (broken down by foreign/domestic origin) • Bilateral trade balances based on flows of value added embodied in domestic final demand • Intermediate imports embodied in exports September2013 Ministry of Economy

  10. Trade in ValueAdded • In Turkey, the latest input-output tables were published in 2002. • Keeping the input-output tables up to date is essential. • In addition frequent revision is necessary. September2013 Ministry of Economy

  11. Trade in ValueAdded • Turkish Statistical Institute (TurkStat) has been trying to develop statistics for 2012 through questionnaire. • A method is needed for providing continuity and keeping the data updated. • A method that will allow the data to be collected in one repository and will ensure data flow continously. September2013 Ministry of Economy

  12. B- IMPORTANCE OF TRADE IN SERVICES STATISTICS September2013 Ministry of Economy

  13. Turkey's Services Trade Total Exports (42 billion $) Tourism (25,6 billion $) Transportation (11,1 billion $) 2012 SERVICE EXPORTS Services Account Surplus (22,9 billion $) 13

  14. Turkey's Services Trade Turkey's Share in Global Services Exports (%) Source:WTO 14

  15. Turkey’s Services Trade • Travel • 25.6 billion dollars of revenue in 2012. • 6th in the world in terms of revenue • Regarding number of visitors; • 6 th in the World and 4 th in Europe (2011 and 2012) • Tourism growth in 2000-2012 period; • Turkey: %11,4 • Construction • 2nd in terms of the number of top constructing companies (ENR) • According to CB 1 billion dollars of revenue on average • 7th in the world in terms of revenues September2013 Ministry of Economy 15

  16. Turkey’s Services Trade • Logistics • Europe’s biggest truck fleet (45000 trucks /1400 companies) • 25. Biggest flight fleet in the world (1 million flight in 2011 / 460.000 international) • Privatization of railway transportation services and the high-speed railway projects are carried out rapidly. So we expect increase in exports of rail transportation services. • 11th in the world in terms of receipts • Telecommunications • 500 million dollars of revenue • 12th in the world in terms of 2012 receipts September2013 Ministry of Economy 16

  17. Why Trade in Services Statistics Matter? • GATS • Follow-up of Uruguay Round commitments • Progressive liberalization principle • Request-offer procedures, bilateral& plurilateral negotiations • Statistics are of crucial importance in order to submit requests to Members or assess the requests meaningfully • TISA (Trade in Services Agreement)&FTA’s (Free Trade Agreements) • Demise of the Doha Round Negotiations • Start of a comprehensive TISA agreements among 23 countries • More comprehensive FTA’s covering “trade in services” , “investment” , “government procurement” • Bilateral trade in services statistics are vital to undertake negotiations. (Going to the market without knowing how much you have in your pocket) September2013 Ministry of Economy 17

  18. Why Trade in Services Statistics Matter? • High-Level Bilateral Meetings (JETCO etc.) • Without “trade in services data” agenda is missing • Service exporters only react (give feedback) when there is serious problems • High-level contacts are chosen according to sub-sectors traded • Increasing trade in services volume with regional trading partners September2013 Ministry of Economy 18

  19. Why Trade in Services Statistics Matter? • Policy Making “Trade in Services Agenda” • No single institution responsible for “trade in services” before 2011 Public Administration Reform Package • By 8 June 2011, Ministry of Economy is assigned for legislative arrangements and implementation of them regarding “trade in services” • Policy making is sensitive both to sectors (even sub-sectors) and to countries. • There is an increasing need for sectoral and country-based statistics September2013 Ministry of Economy 19

  20. Why Trade in Services Statistics Matter? • BOP approach and Current Account Deficit (CAD) • High “net errors and omissions” (some of which may have arised from missing “trade in services” data) • CAD is one of the most important macroeconomic indicators • Turkey has a significant trade volume and needs more accurate data to manage current account particularly “trade in services” operations • Obligations arising from EU Acquis • Turkey has started accession negotiations in 2005 • EC directive 184/2005 on community statistics concerning balance of payments • ITS must be compiled with wide sectoral coverage and with enough geographical breakdown September2013 Ministry of Economy 20

  21. What Are The Recent Problems? • Developing bilateral statistics • (compilation of trade in services statistics by trade partners) • Increasing the level of detailof existing data on trade in services (specifically construction and transportation) • Compilation of detailed sectoral statistics (such as, computer related, audio-visual, health and related, professional and education services sub-sectors) September2013 Ministry of Economy 21

  22. Trade in ValueAdded References • OECD, TradePolicyImplications of Global Value Chains, http://www.oecd.org/sti/ind/Trade_Policy_Implicatipns_May_2013.pdf • OECD-WTO, TradeIn Value-Added: Concepts, MethodologiesAndChallenges(JointOECD-WTO Note)https://www.google.com.tr/search?q=a+set+of+international+input-output+tables+with+bilateral+trade+links&rlz=1C1GTPM_trTR528TR528&oq=a • OECD-WTO Database on Trade in Value-Added, http://www.wto.org/english/res_e/statis_e/miwi_e/tradedataday13_e/oecdbrochurejanv13_e.pdf September2013 Ministry of Economy

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