NORTH AMERICA AND GLOBAL ECONOMY

TRADE REPORT ON TURKEY

Funda CelikaksoySaid Diarra

COUNTRY PROFILE

The population is approximately 70 million in 2003

The population growth rate is 1.53%

The life expectancy is 68.7 years

The age distribution is:• 0-14 : 26.6%• 15-64: 66.8%• 65 +: 6.6%

COUNTRY PROFILE

Politics:

Turkey is a parliamentary democracy

The President is Ahmet Necdet Sezer and the Prime Minister is Recep Tayyip Erdogan

The President is elected by National Assembly for a seven year term

The Minister of Economy is Ali Babacan and the Minister of Industry and Trade is Ali Coskun

COUNTRY PROFILE

Ethnic composition: Turks: 80% Kurds: 20%

Religion: Muslim : 99% Christian and Jews : 1%

COUNTRY PROFILE GDP IN $US:

1999 2000 2001 2002 2003

GDP in$ US(per capita PPP)

6,135 6,730 6,046 6,448 6,718

GDP Real growth rate (%)

- 6.1 6.3 -9.5 7.9 5.9

GNP current prices (million $)

185,267 200,002 145,693

180,892

239,235

GNP per capita 2,879 2,965 2,123 2,598 3,383

COUNTRY PROFILE Structure of the

economy: GDP composition by sector

(%)1999

2000 2001 2002 2003 2004

Agriculture 16.0

15.4 12.8 13.0 13.4 24.3

Industry/Manufacturing

19.0

20.0 21.1 19.7 18.5 15.3

Services 64.9

64.6 66.1 67.3 68.2 61.0

COUNTRY PROFILE

Government finances:

The budget is constantly in deficit

The public debt ratio to GDP is 54.4%

The government expenditure is 39% of the GDP

The government revenue is 28% of the GDP

The public debt is 194,386,700 billion (TL) (194 billion

$CAN)

COUNTRY PROFILE

Balance of Payment:(million dollars) 2000 2001 2002 2003 2004Current Account

-9,819 3,390 -1,522 -8,037 -10,739

Goods balance

-21,959 -3,733 -7,283 -14,010 -18,772

Goods&service

-10,591 5,397 596 -3,505 -7,166

Goods&service& investment

-14,593 397 -3,958 -9,064 -11,658

Capital Account

9,584 -14,643

1,161 7,091 13,169

Balance -2,997 -12,924

-212 4,097 4,587

Official Reserves

2,997 12,914 212 -4,097 4,584

Country Profile Exchange rates : on March 4 2005; YTL/USD

1.2620, YTL/EURO1.6690, YTL/CAD 1.020 Foreign Exchange Reserves: On Feb 18 2005

total reserves is US$ 38,433.4 million, foreign currency reserves are held mainly in US dollars

Net international investment position by latest data in 2003 is US$ –111,225 million

Gross External Debt: US$ 153,160 million Foreign Debt to GDP ratio: 64%

COUNTRY PROFILE Global Ranking:

Growth Competitiveness: 66th out of 80

Business Competitiveness : 52nd out of 80

Public Institutions: 63rd

Corruption sub index: 75th

Microeconomic Competitiveness: 54th out of 80

Human development index: 88th

COUNTRY PROFILE

International organizations: NATO, Council of Europe, UN, OECD, UNESCO, WHO, WTO, IMF, World Bank

Trade Agreements: Customs Union with EU EFTA Euro-Mediterranean Partnership Economic Cooperation Organization Black Sea Economic Cooperation

COUNTRY PROFILE

Bilateral relations with Canada:

Turkey is a valued commercial and strategic partner for Canada

They both share common membership in numerous international organizations (UN, G20, OECD)

Turkey is Canada’s second largest trading partner in Central and Eastern Europe

It provides good opportunity to sell Canadian products/services

The total bilateral trade is positive and is expected to steadily increase

COUNTRY PROFILE

Bilateral relations with Canada:

Canada’s primarily exports commodities (coal, wheat, wood pulp)

Double taxation agreement was reached between the two countries

Canada-Turkey framework agreement (to ensure closer bilateral relationship)

Country Profile

Bilateral relations with the US

US is one of the major trade partners of Turkey Export items to the US: iron&steel, pearls and precious

stones, machinery and mechanic parts, tobacco and cement

Import items from the US: machinery, electrical equipments, pharmaceuticals, organic chemicals, aircraft and parts, optical and photographic instruments

Exports and imports share 8 and 5% respectively Turkey constitutes 0.2% of imports and 0.4 of exports of

the US

COUNTRY PROFILE

Bilateral relation with NAFTA:

Turkey mostly deal with Canada and the US but doesn’t have a significant relationship with Mexico

Turkey’s exports to NAFTA totaled more than $3.6 billion in 2004 (8.6% of total exports)

Turkey’s imports from NAFTA equaled more than $4.6 billion (5.4% of total imports)

INTERNATIONAL TRADE

Turkey’s exports: Total exports are US$ 56 billion in 2004 Main exporting partners are Germany, the US, the UK, Italy, France,

Spain, Holland, Russian Federation ( 80% of exports are directed to EU countries)

Main export products: Textile and clothing: $6.6 billion 23% of total exports Iron and Steel: $2.2 billion, 6.9 million tons Agriculture: Olive, cotton, tobacco, hazelnut Chemicals: $436 million, plastic raw materials

$ 289.6 million, soaps, detergent, cleaning products Glass and Ceramics: 5th in tiles production (world)

4th in Europe Gold jewellery Mining

INTERNATIONAL TRADE

Turkey’s imports: Total imports are US$ 87 billion in 2004

Main importing partners are Germany, The US, the UK, France, Russian Federation (88% of imports are from EU)

Main import products are: Machinery and equipment Chemicals Petroleum Pharmaceutical products

INTERNATIONAL TRADE

Capital Flows: Total FDI in Turkey amounted to US$ 32 billion by 2003,

there are 6584 foreign companies operating in Turkey, 108 out of top 500 companies list of Fortune magazine

The leading investors: France, Netherlands, Germany, UK, the US

EU accounts for 68% of foreign investment stock OECD accounts for 88%, 2% for Islamic countries, 1%

East European countries, 9% other countries Services represent 50-55% of the total stock of FDI Manufacturing sectors investments, 35-40% Agriculture and mining investments: 5%

INTERNATIONAL TRADE

International disputes:

Turkey has been involved in 12 cases

7 concerned Turkey’s trade measures

3 involved quantitative restrictions on imports of textile and clothing products

Turkey has been the complainant in 2 cases against Egypt and South Africa

INTERNATIONAL TRADE

International disputes with the US:

Generalized System of Preferences (GSP)

Intellectual Property Rights

Anti-Dumping & countervailing duties

Textiles trade

FDA regulations

TRADE POLICY

Influenced by WTO and trade relations with the EU

An export-oriented high value-added services and manufactured products

It also includes an emphasis on technology-intensive

Focuses on supporting export activities particularly of SME’s

Government's goal is to contribute to efficiency of free zones by dealing more with Middle East, Caucasian region and Central Asia

TRADE POLICY

Long term strategy contains 8 five year development plans for 2001-2005

Reduce state intervention by privatization of public enterprises

Promoting FDI Continue industrialization policy Finance exports through the Turk Eximbank Improve infrastructure for better

international trade relationships

TRADE POLICY

Recent modifications on domestic legislation on:

Intellectual property rights Telecommunication Customs Anti-dumping Banking Energy Government procurement

TRADE POLICY

It is not a signatory of the Plurilateral Agreements from the Uruguay Round

Interest in Doha Development Agenda: Future multilateral tariff reduction Simplification of tariff structure Elimination of non-tariff barrier Equitable agricultural trading environment

CONCLUSIONMany future opportunities with the future and official entry

in the EUAcquiring more knowledge with the machine they’re

importing

Multiple agreement in the region give them an increase level of trade because they deal with different type of market influence in “relationship know-how”

Stable political regime so less risk for making business Average ranking that gives it time to grow