Prof. Dr. Tunçdan Baltacıoğlu Izmir University of Economics Turkey CAN THE LOGISTICS RELATIONS BETWEEN HUNGARY AND TURKEY BE STRENGTHEN ON THE BASIS OF TRADE RELATIONS? Prof. Dr. Tunçdan Baltacıoğlu Izmir University of Economics Turkey

Major Global Trade Routes 1400-1800 Baltic Western Europe Central Asia North America China Hormuz Mexico Havana India Canton Pacific Ocean West Africa Aden Caribbean Manila Pacific Ocean East Africa Aceh Malacca Indian Ocean Southeast Asia Peru Brazil Atlantic Ocean Source: Presentation by Jean-Paul Rodrigue, Dept. of Economics & Geography, Hofstra University, Hempstead, NY, 11549 USA. (1999-2005) Trade Route Dominant Capital Flow

Changes in Global Trade Flows Before 1970 After 1970 Developed Countries Developed Countries Source: Presentation by Jean-Paul Rodrigue, Dept. of Economics & Geography, Hofstra University, Hempstead, NY, 11549 USA. (1999-2005) Developing Countries Developing Countries Industrial Pole Flows of merchandises Flows of raw materials

Economic Integration and Interdependencies Interdependent Groups of Nations Independent Nations G1 a a h h b b g g Source: Presentation by Jean-Paul Rodrigue, Dept. of Economics & Geography, Hofstra University, Hempstead, NY, 11549 USA. (1999-2005) c f d d c e f e G2

Impacts of Integration Processes on Networks and Flows Before Integration After Integration International border Network Source: Presentation by Jean-Paul Rodrigue, Dept. of Economics & Geography, Hofstra University, Hempstead, NY, 11549 USA. (1999-2005) Flows

Major Economic Blocks, 2000 Source: Presentation by Jean-Paul Rodrigue, Dept. of Economics & Geography, Hofstra University, Hempstead, NY, 11549 USA. (1999-2005) The Andean Community of Nations (in Spanish: Comunidad Andina de Naciones, abbreviated CAN) is a trade bloc comprising the South American countries of Bolivia, Colombia, Ecuador, Peru and Venezuela (which is in the process of leaving the bloc). The trade bloc was called the Andean Pact until 1996 and came into existence with the signing of the Cartagena Agreement in 1969. Its headquarters are located in Lima, Peru. The Andean Community has 120 million inhabitants living in an area of 4,700,000 square kilometers, whose Gross Domestic Product amounted to US$745.3 billion in 2005, including Venezuela.

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International Trade and Transportation Chains B Origin Trade barrier Destination Composition Transport Chain Decomposition Source: Presentation by Jean-Paul Rodrigue, Dept. of Economics & Geography, Hofstra University, Hempstead, NY, 11549 USA. (1999-2005) A B Rail Maritime Road Transshipment Customs

LOGISTICS/SUPPLY CHAIN COMPETENCE INTERNATIONAL TRADE LOGISTICS/SUPPLY CHAIN COMPETENCE 1 Euro reduction in cost from supply chain efficiencies is equivalent to a 12 Euros increase in sales revenues...

Turkey as a “Landbridge” Between Europe and Asia Addition of new EU member states will bring attendant challenges of increases in the congestion on railroads and motorways in Europe while connecting to the developing markets of the Far East and to the development of Trans European Networks (TEN) in connection with the Pan- European Network There is likelihood for the role of Turkey to develop as an alternative route in coordination with the Pan-European Network – once considered in ancient times as the Silk Way Road The importance of Turkey – at the intersection of the Asian and European transport corridors while holding similar custom regulations of the EU as a non-member of the union – is increasing due to these developments in global trade

HUNGARY as a “Critical Logistics Node in Europe and “Gate to the Balkans” Hungary has an important logistical position due to having lots of transportation networks and 4 main Europen transportation corridors inside its boundaries After being admitted as a full member in the Europen Union, Hungary becomes a gate to the Balkans International firms logistics center in Hungary gives them a great advantage in terms of transportation cost for carrying the goods both to Western Europe or Asia via rail roads

Hungary as a “Critical Logistics Node” in Europe The Convention regarding the Regime of Navigation on the Danube signed in Belgrade on 18 August 1948 is the international legal instrument governing navigation on the Danube. In order to execute the implementation of the “Danube River Regulation of Navigation”, a commission was constituted In 2001 in the 59th Annual General Meeting of the Danube Commission, Turkey’s participation to this commission was admitted as an observer. This observer status of Turkey in the commission is perceived as the first step in becoming a full member

Danube River and The Black Sea Apart from being complementary water ways for navigation, Danube River and The Black Sea are related to each other in economical cooperation Water/river transportation between Turkey and Hungary will be declined

COLLABORATION OPPORTUNITIES FOR TURKEY AND HUNGARY Critical Logistics Node in Europe Technological support Member of EU Similarly, it is aimed to raise the level of transportation infrastructure of Hungary to the required level of European Union until 2015 Turkey Potential Logistics Center between Europe and Asia Geographical advantage Candidate member of EU For becoming an important logistics center between Europe and Asia,Turkey is investing on logistical infrastructure

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