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
20 December 2012, TOBB

2. Free Trade: an Evolving Idea The EU’s Trade Policy
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
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
72.588
4.7%

7. Turkey’s 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

8. EU Remains Turkey’s Most Important Trade Partner: By Far
Turkey’s Imports Partners Turkey’s Exports Partners Major Trade Partners 1) EU % 1) EU % 1) EU % 2) Russia: % 2) Iraq % 2) Russia % 3) China: % 3) Russia % 3) China % 4) USA % 4) USA % 4) USA % 5) Iran % 5) UAE % 5) Iran %

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