Çok Taraflı İlişkiler ve Avrupa Birliği’nin Geleceği Konferansı

1. Çok Taraflı İlişkiler ve Avrupa Birliği’nin Geleceği Konferansı Dış Ticaret Müsteşarlığı 29 Nisan 2011 Bahçeşehir Üniversitesi – Istanbul Dr. M. Sait AKMAN

2. Towards a Turkish Trade Strategy • İhracat Stratejik Planı (ExportStrategy Plan) (2004-2006) • RevisedExportStrategy Plan (2007-2009) • DTM Stratejik Plan (UFT Strategic Plan) (2009-2013) • 2023 Strategy • Sanayi Strateji Belgesi (IndustrialStrategyDocument) (2011-2014) • InternationalTradeandInvestments(as a horizontalpolicyarea)

3. İhracat Stratejik Planı (ExportStrategy P.) (2004-2006) Major structural problems: • Regional and sectoral confinement in exports (ürün ve pazar çeşitliliği) • Lack of compatibility of export structure with the international trade trends and developments, and • Instability in the rate of export growth. • General Objectives: • “building up of an export structure conducive towards sustainable export increase” • Objectives: • To ensure promotion and marketing of high quality Turkish products in foreign market • To ensure information relevant for exporters (Market Access) • To provide the exporters with inputs at internationally competitive prices • To improve exporters’ market access opportunities… within the framework of bilateral and multilateral trade relations • Todevelopbetter coordination among the public and private sectors and non-governmental organizations

4. DTM Stratejik Plan (UFT Strategic Plan) (2009-2013) • Main Objectives: • Transformation towards an export structure with high value-added products based on innovation and R & D • Increasing regional and sectoral diversification in line with trends in world trade, access to new markets • Providing easier access to raw materials intermediary goods • Developing trade defense instruments against injuring or threatening imports

5. Export-oriented production strategy • Switchingtohighvalue-addedgoods in low-techsectors; • Switchingtohighvalue-addedgoods in medium-lowtechsectors, andincreasingproduction; • Increasingproductionlevels in medium-hightechsectors; • New investments in high-techsectors.

6. Essential points in export strategy • A proactive trade policy • Switching from low-to-medium, into mid-to-high, and high-tech products in exports • Products based on innovation, R&D and design • Input supply strategy ‘girdi tedarik s.’(common purchase organ.) • A better coordination of public institutions • Public-private coordination • Restructuring the UFT

7. Share of sub-sectors in total manufacturing exports (%), TÜİK

8. Share of groups in total manufacturing exports (%)

9. Switchingfromprimaryandlowtechnologyproductionintomoretechnology-intensiveproductionandexportsSwitchingfromprimaryandlowtechnologyproductionintomoretechnology-intensiveproductionandexports ‘To be Europe’smanufacturingbase in mid-to-hightechproducts, and a baseformanufacturinganddesign (Büyükekşi, TİM); Howtoreconcilewithoutexpandingyourdomesticresources? • TR has challengesanddisadvantagesvis-a-via CEEC andother EU membersbecausetheyarealready in the EU decisionmakingmechanismthroughwhichthey can manipulatepolicies • EU investmentrelocate in thesecountries as theyfulfilladoption of theacquis, while TR is slow in thisprocess • Redistributionmechanisms (i.e. structuralfunds) help CEEC toadjusttheirindustries, while EU fundsfor TR is verylimited..

10. Graph & Turkey’sexportconcentrationbycountryandsector (Herfindhal-Index, 1990-2007) Source: Türkiye Kalkınma Bankası (2010), TR’nin İhracatında Öne Çıkan Sektörleride Temel Pazar Ülkeler, Rakipler ve Rekabet Gücü

11. Share of high-tech exports in total exports (%) of selected countries Source: World Bank, World Development Report, 2007.

12. İMALAT SANAYİNİN TEMEL GÖSTERGELER AÇISINDAN YAPISAL ANALİZİ, İSO (2010)

13. What kind of trade strategy? • Tradestrategyshould not be confinedtomanufacturingsectoronly, • Tradestrategyshould not be confinedtoexportsonly • Tradestrategy is not only market access, but traderules • Tradestrategy is not onlyabouttradeonly, but relevantpolicyareas

14. A critic of Turkey’s export strategy • Thenewtradeagenda is devotedtoexportpolicy, withoutparticularattentiontoimports (whatshould be Turkey’snewimportpolicy?) • Itfocuses on market accesstoothermarketswithoutopeningitsown. ‘But onemaindriver of growth is imports’ • Verticalintegrationin global tradeandproductionpatternsareneglected (reducingthe rate of intermediarygoods/inputs in exports is soeasy?) Whichpart of value-addedchainshouldTurkeypositionitself? • It is mainlyconfinedtomanufacturing, withlittleattentiontootherareas (services, investments, agriculture, development…) • Tradepolicy is not onlyconfinedtotradeonly, but trade-relatedissues(environment, technicalstandards, governmentprocurement, investments, labourissues, foodsecurity…)

15. Import policy: • Heavyuse of anti-dumpingandsafeguards is not compatiblewith liberal tradepolicy! • Trade-offbetweenexport-oriented market accessstrategyin medium-to-hightechnologysectors; andhighprotection in imports in low-to-mediumtechnology (i.e. textiles-clothing, footwear, basemetals) sectors! • The nominal protectionrates (NPR) arehigh in sectorslike: 8.93 percent in textiles; 8.03 percent in footwear; 5.36 percent in basemetals; 6.36 percent in transport equipment; and 5.41 percent in chemicals. • Loweringtariffs on essentialinputs as demandedbydomesticproducers, is not alwayspossibleduetohigherrates in CCT of the EU (CustomsUnion). Whatto do?

16. Trade strategy should consider… (1) • Theverticalintegrationin worldproductionandtradepatternsanddecidewheretostand in value-addedchain • whetherTurkey is a developingcountrywithlow-to-mediumtechgoods; or a developedcountryorientedtowardsvalue-added, high-techproducts, brandedproductsbased on R & D andinnovation? AVOID "middle-income trap" • Trade in servicesnot to be neglected in tradepolicy, without it thelattercannot be comprehensivefor a countrytobecome10th biggesteconomy !! • HowtomergebilateralinvestmentagreementswithFTAs? (India, Korea, Canada, so on) • Thecritical role of ‘tradeadjustmentassistance’ mechanismnecessarytoovercometheresistance of uncompetitive / senileindustries.

17. Trade strategy should consider… (2) • EU accessionprocessmust be integratedmorefirmlyintotradestrategy • Theimpact of EU FTAsmust be betteridentified (Akman, 2010) • An integratedstrategywithnewtopicsin global tradeagenda (foodsecurity, climatechange, socialstandards, investments, publicprocurement…) • Tradeandenvironmentissueneedsmorescrutiny.. • A specificpolicyapproachfor‘development’ policyandassistance? (remember Doha DEVELOPMENT Round) • itsinterests in WTO multilateralismandbilateralFTAs • whichonedeservespriority? • shouldfocus on its WTO rightsagainstoffendingpartnersiftheyprevent market accessfor TR exportables..

18. WTO vs. RTAs • Preferentialagreementsshiftattentionawayfromthe Doha Roundandmultilateral WTO rules • WTO is not only a forum of negotiations, but a venuefortraderule-making “Turkey'sFTAsmakesitstraderegimecomplexanddifficulttomanage. Futuretradeagreementscouldfurthercomplicatethetradingenvironmentcreating a web of incoherentrulesanddetractfrommultilateralefforts, giventhelimitedresourcesavailable” Turkey TPRM Report (WTO, 2003: 17).

19. Tariffsbeforeandafter NAMA Calculation by UFT Economic Research Section based on the formulas and coefficients suggested in the latest Draft on NAMA Modalities (4th Rev.) where the coefficients are assumed to be 8 and 25 for the developed and the developing countries respectively where the formula is (i.e. t1= [a or (x,y or z)]*t0 / [a or (x,y,or z)]+t0 )

20. Tradestrategyshouldconsider… (3) Tradestrategyshouldgohand in handwithIndustrialStrategyDocument • Goodcoordination of publicbodies, UFT, ministriesso on… • Goodcoordination of public-privaterelationship (state - business, NGOs, universities) • Moreactiveinvolvement of privateparties in FTA and WTO process

21. Tradepolicyandexportdiversification • Tariff removal has decreasing returns in terms of export diversification. A la Ricardian model, thatpreciselypredicts that a reduction in trade barriers leads to an increased range of exported goods (seeDornbusch et al., 1977, andVenables, 2003). • Getting better access to a foreign market through tariff cuts helps to increase the extensivemargin of exports, but up to a certain point. When tariffs are low enough, other factors becomemore important to push diversification further. • These factors may include, among others,physical infrastructure, which is a key determinant of transport costs; institutional infrastructure related to trade facilitation (e.g., customs); logistics; and factorendowments determining the ability of the country to be active in certain sectors (e.g., humancapital in industries producing high tech or differentiated goods).

22. Rekabet gücü bileşenlerine göre Türkiye’nin yeri (133 ülke arasında)