Turkey in the World Trading System and the WTO: Activism under Global Challenges and the EU Process

Abstract

Turkey’s increasing engagement in world economy and international trade invites her to take a proactive approach in the WTO and in regional trade agreements. Exogenous factors including her accession process to the EU, and the obligations under the Customs Union; as well as current state of negotiations within the realm of the WTO, and developments in the world trading system are important factors to shape this strategy. In this context, Turkey plays role of a middle-power actor who positions herself between developed and developing economies. The study argues, this dilemma reflects her Janus-face and can be avoided by her own choice. In this context, what Turkey needs is to establish a single identity that focuses on long-term competitiveness to transform its economy towards the production and export of medium-high technology sectors; and to be able to formulate a more comprehensive trade policy beyond a mere export strategy by considering vertical integration in global production and trade patterns; services, access to supplies; and the emerging global trade agenda in trade-related matters. This will help her to achieve the aspiration to become a regional leader and an influential global actor

Keywords

• Turkey, Trade Policy, World Trade Organisation, European Union, Customs Union.

References

1. WTO International Trade Statistics (2011a) reveal that in 2010 Turkey was twenty- second leading exporter of manufactures in the world with a share of 1 percent and a value of 114 billion dollars, and fifteenth largest importer with a share of 1.5 percent and a value of 186 billion dollars (counting the EU-27 as one). In services trade, Tur- key amounts to a share of 1.2 percent (33 billion dollars). and 0.7 percent (18 billion dollars) in exports and imports in 2010 ranking sixteen and twenty-four, respectively.
2. WTO International Trade Statistics (2011a) reveal that in 2010 Turkey was twenty- second leading exporter of manufactures in the world with a share of 1 percent and a value of 114 billion dollars, and fifteenth largest importer with a share of 1.5 percent and a value of 186 billion dollars (counting the EU-27 as one). In services trade, Tur- key amounts to a share of 1.2 percent (33 billion dollars). and 0.7 percent (18 billion dollars) in exports and imports in 2010 ranking sixteen and twenty-four, respectively.
3. For a detailed analysis of the CU Decision see, Kabaalioğlu (1998).
4. This caused an important dispute settlement case in textiles in the WTO, after a complaint by India against Turkey. See, http://www.wto.org/english/tratop_e/ dispu_e/cases_e/ds34_e.htm for facts of the dispute. This matter shall be analysed subsequently. Turkey was allowed to maintain higher rates of protection in specified sensitive pro- ducts until 2001, as an exception to its alignment of the CCT.
5. İzmen and Yılmaz (2009) go further to claim that as well as its effect on Turkey in making her to come more into line with the market forces, the CU also helped Tur- key to resist the East Asian and Russian crises of the 1990s, and the global recession in 2008, without which it would have been very difficult for Turkey to overcome
6. (p.176). However, the CU did not eliminate the effects of these crisis and did not prevente Turkish economy from experiencing another crisis in 2011, but did trans- form Turkish industries to become more resistant to external shocks.
7. Several countries including Turkey urged the WTO under the so-called Istanbul Declaration to extend the deadline for implementation of the final integration stage to December 31, 2007 with regard to the WTO Textiles and Clothing Agreement.
8. The idea behind the initiative was to prevent job losses and business bankruptcies due to massive trade associated with the ending of current textile trade regime in 2005.

9. For the petition Istanbul Declaration Ragarding Fair Trade in Textiles and Clothing presented to the WTO Director General see, www.ncto.org/quota/Idec.pdf (retrie- ved on 16 April 2011).
10. This ratio is over the worlds average of manufactured products to total exports, accor- ding to World Bank figures. Actually when revision is made for the period of 2007-2009 to eliminate the effects of the global economic and financial crisis, Turkey ranks the first in its group. TEPAV (2011a: 2). TEPAV (2011b: 5).
11. See, http://www.sanayi.gov.tr/Files/Documents/sanayi_stratejisi_belgesi_2011_2014. pdf for the Document. (retrieved on 18 April 2011).
12. For more on Turkey’s competitive position see, Seymen (2009).
13. MFN TTRI denotes the tariff that when uniformly applied accross the entire (MFN only) tariff Schedule would keep total imports at the observed level. The TTRI helps to capture the protectionist aspect of a countrys non-discriminatory trade policy. See, World Trade Indicators 2009/10 database (country-level Trade Briefs and Trade-at-a-Glance Tables) available at: http://info.worldbank.org/etools/wti/docs/
14. Briefstaags.htm (retrieved on 18 April 2011)
15. WTO (2012, p. viii) notes that the import regime for industrial goods is de facto more open, as CU and FTAs provides many of Turkey’s trading partners a duty-free access.
16. For a more detailed analysis of the debate concerning the implications of the EUs FTA regime on Turkey-EU relations and Turkish trade regime, see Akman (2010).
17. Hilary, J. (2005, p. 12). The Doha Deindustrialisation Agenda: Non-Agricultural Market
18. Access Negotiations at the WTO, available at: http://www.wto.org/english/forums_e/ ngo_e/posp47_nama_e.pdf (retrieved on 10 May 2011). For a recent review of
19. NAMA negotiations see, Low and Santana (2009).
20. The fourth revision draft text is TN/MA/W/103/Rev.3, on 6 December 2008. For current state of NAMA negotiations, see TN/MA/W/103/Rev.3/Add.1, on 21 April Yaman (2008:177). Yaman (2008:182-184).
21. July 2006. They further stressed that no modalities in agriculture can be acceptable which do not fully reflect the expectations of the vast bulk of developing count- ries in the WTO on SPs and SSM. See, http://www.tradeobservatory.org/library. cfm?refID=88374 (retrieved on 14 May 2011).
22. For more on Turkey’s position in WTO in agriculture see, Çakmak and Akder (2005).
23. See, WTO Document TN/S/O/TUR/Rev.1 on 29 September 2005 for Turkish
24. Revised Conditional Offer on Services. The Fifth Meeting of the WTO Coordination Committee in Turkey, held on 12 April 2006, available at: http://www.dtm.gov.tr/dtmadmin/upload/ANL/CokTaraf- liAnlasmaDb/KitapcikNisan2006.doc (retrieved on 16 May 2011).
25. Named after WTO Document TN/C/W/52, a proposal for “modalities” in negotia- tions on geographical indications (the multilateral register for wines and spirits, and “disclosure” in biological diversity. WTO Document TN/TF/W/45 The document is accessible via: http://docsonline. wto.org/gen_search.asp?searchmode=simple For a detailed analysis of Turkey’s approach in TF, see (Oğuz, 2008).
26. See, WTO figures available at: http://www.wto.org/english/tratop_e/adp_e/ad_init_ rep_member_e.pdf (retrieved on 19 May 2011).
27. Ticaret Müzakereleri ve Türkiye (The WTO, Doha Round of Multilateral Trade Negotiations and Turkey). TEPAV Publication, Ankara. Akman, M. S. (2010) The European Unions Trade Strategy and Its reflections on Turkey:
28. An Evaluation From the Perspective of Free Trade Agreements, Dokuz Eylül Üni- versitesi Sosyal Bilimler Enstitüsü Dergisi, 12(2). pp.17-45. Aran, B. (2012 forthcoming). Dünya Ticaret Örgütü ve Çok Taraflı Ticaret Sistemi içinde Türkiyenin Konumu. (Turkey’s Position within the WTO and Multilateral
29. Trading System). in Akman, S. and Ş. Yaman (eds.) Küresel Ticaret Sistem, Yeni Ticaret Gündemi ve Türkiye (Global Trading System, New Trade Agenda and Tur- key). Ankara: TEPAV. Cheong, D. and G. Dikmener (2007). The Determinants of Turkish Antidumping. avail- able at: http://www.etsg.org/ETSG2007/papers/cheong.pdf (retrieved on 19 May 2011).
30. Çakmak, E. and H. Akder (2005). DTÖ ve AB’deki Gelişmeler Işığında 21. Yüzyılda Tür- kiye Tarımı (Turkish Agriculture in the XXI. Century under the Developments in
31. WTO and the EU). (TUSIAD/T/200506/397). TUSIAD Publication, Istanbul.
32. Erlat, G. and O. Akyüz, (2001). Country Concentration of Turkish Export and Imports over Time. Economics Web Institutes, at: http://economicswebinstitute.org/essays/ conexp.htm (retrieved on May 7, 2011).
33. Hilary, (2005). The Doha Deindustrialisation Agenda: Non-Agricultural Market Access Ne- gotiations at the WTO, available at: http://www.wto.org/english/forums_e/ngo_e/ posp47_nama_e.pdf (retrieved on 10 May 2011).
34. İmir, M. (2008). DTÖ Tarım Müzakereleri, Türkiyenin Tutumu ve Müzakere Sonuç- larının Türk Tarımına Olası Etkilerinin Nitel bir Değerlendirmesi (WTO Ag- ricultural Negotiations, Turkey’s Position: A Qualitative Analysis of the Possible
35. Impact of Negotiation Results on Turkish Agriculture) in Akman and Yaman (eds). /papers/ 133-156. İzmen, Ü. and and Yılmaz, K. (2009) “Turkey’s Recent Trade and Foreign Direct Invest- ment Performance, in Z. Öniş and F. Şenses (eds). Turkey and the Global Economy,
36. Routledge: London, /papers/ 173-203. Kabaalioğlu, Haluk (1998). “The Customs union: A Final Step Before Turkey’s Ac- cession to the European Union?”, Marmara Journal of European Studies, 6(1). / papers/ 113-140.
37. Kaminsky, B. and Ng, F. (2007). Turkey’s Evolving Trade Integration into Pan-European
38. Markets, Journal International Trade and Diplomacy, 1(2). pp.35-103. Low, P. and R. Santana (2009). “Trade Liberalization in Manufactures: What is Left
39. After Doha Round” Journal of International Trade and Diplomacy, 3(1). /papers/ 126. Oğuz, S. (2008). Ticaretin Kolaylaştırılması ve Türkiye (Trade Facilitation and Turkey) in
40. Akman and Yaman (eds). pp. 255-292. Öniş, Z. and K. Mutlu (2008). Ulusal, Bölgesel ve Küresel Dengelerin Kıskacında bir
41. Ülke: Avrupa Birliği Yolunda Türkiye ve Doha Kalkınma Müzakereleri, in Ak- man and Yaman (eds). /papers/. 102-132. Özdemir, D. (2010). Trade and Economic Relations Between the EU and Turkey, Study prepared for European Parliaments Committee on International Trade, available at: http://eu.bilgi.edu.tr/docs/trade_and_economic_relations_with_turkey.pdf.
42. Pulat, M. (2003). “The World Trade Organization and Turkey,” Turkish Policy Quarterly, (3).
43. Pulat, M. (2008). Fikri Mülkiyet Hakları ve Ticaret: Türkiyenin Durumu (Intellectual
44. Property Rights and Trade: Turkey’s Position). in Akman and Yaman (eds.). / papers/ 210-232. Sampson, G. P. (2008). Trade in Services and Policy Priorities for Developing countries, in G. P. Sampson and W. B. Chambers (eds.). Developing Countries and the WTO:
45. Policy Approaches, Tokyo, United Nations University Press. Seymen, D. (2009). Türkiyenin Dış Ticaret Yapısı ve Rekabet Gücü (Turkey’s Foreign Trade
46. Structure and Competitiveness). Dokuz Eylül University Publication, Izmir. Tan, M. (2008). Anti-Damping, Subsidies and Turkey (Anti-dumping, Subsidies and Turkey). in Akman and Yaman (eds). /papers/ 210-232.
47. Taymaz, E. and E. Voyvoda (2009). Industrial Restructuring and Technology Policy in
48. Turkey, in Z. Onis and F. Senses (eds). Turkey and the Global Economy: Neo-Liberal Restructuring and Integration in the Post-Crisis Era, Routledge, /papers/ 145-172. Taymaz, E., E. Voyvoda and K. Yılmaz (2011). Uluslararası Üretim Zincirlerinde Dönüşüm ve Türkiyenin Konumu, TÜSİAD-Koç University Economic Research Forum
49. (EAF). EAF-RP/11-01, December, Istanbul, available at: http://eaf.ku.edu.tr/sites/eaf.ku.edu.tr/files/eaf_rp_ 1101.pdf (retrieved on February 02, 2012).
50. TEPAV (2011a). Türkiyenin İhracat Performansı 1: Daha Az Rekabetçi, Daha Hızlı
51. Adapte, TEPAV Policy Note. N201124, March 2011, Ankara.
52. TEPAV (2011b). Türkiyeınin İhracat Performansı 2: Sektörel Bazda Çeşitlilik,
53. Rekabetçilik ve Adaptasyon, TEPAV Policy Note. N201137, May 2011, Ankara.
54. Togan, S. (2010). “Turkey: Trade Policy Review 2007”, The World Economy, pp.1139
55. Tonus Ö. (2007). Gümrük Birliği Sonrasında Türkiye’de Dışa Açıklık ve Sanayileşme,
56. Dumlupınar Üniversitesi Sosyal Bilimler Dergisi, 17, pp.193-214. Türkiye Kalkınma Bankası (2010). Türkiye”nin İhracatında Öne Çıkan Sektörlerde, Temel
57. Pazar Ülkeler, Rakipler ve Rekabet Gücü, TKB Ekonomik ve Sosyal Araştırmalar Müdürlüğü: Ankara. UFT (Turkish Undersecretariat of Foreign Trade). (2006). DTÖ ile Koordinasyon Kurulu
58. V. Toplantısı (5th Meeting of the WTO Coordination Committee). 12 June 2006, available at: http://www.dtm.gov.tr/dtmweb/index.cfm?action=detay&yayinID=1
59. &icerikID=224&dil=TR (retrieved on May 15, 2011).
60. World Bank (2008). World Trade Indicators 2008: Benchmarking Policy and Performance,
61. The World Bank Publication, Washington DC. WTO (2004). Trade Policy Review: Turkey 2003, WTO Publication: Geneva.
62. WTO (2008). Trade Policy Review: Turkey 2007, WTO Publication: Geneva.
63. WTO (2011a). International Trade Statistics 2011, WTO Publication: Geneva.
64. WTO (2011b). World Trade Report 2011 (The WTO and preferential trade agreements:
65. From co-existence to coherence). WTO Publication: Geneva. WTO (2012). Trade Policy Review: Turkey 2012, WT/TPR/S/259 dated 17 January , available at: http://www.wto.org/english/tratop_e/tpr_e/tp359_e.htm (re- trieved on March 01, 2012).
66. Yaman, Ş. (2008). Tarım Dışı Ürünlerde Pazara Giriş Müzakereleri ve Türkiye (Non
67. Agricultural Market Access Negotiations and Turkey). in Akman and Yaman (eds). /papers/ 157-191. Yılmaz, G. (2007). Turkey: s WTO Negotiations in the Shadow of the European Union, in W. Blass and J. Becker (eds.). Strategic Arena Switching in International Trade
68. Negotiations, Ashgate: Aldershot, /papers/ 241-269. Yılmaz, K. (2010). “Taking Stock: The Customs Union between Turkey and the EU
69. Fifteen Years Later”, TUSİAD-Koç University Economic Research Forum Working Paper, no. 1023, July 2010.
70. Yükseler Z. and Türkan E. (2008). Türkiyede Üretim ve Dıs Ticaret Yapısında Dönüsüm:
71. Küresel Yönelimler ve Yansımalar (The Transformation of Turkey’s Production and Foreign Trade Structure: Global Trends and Reflections). TÜSİAD-Koç Üniversitesi Araştırma Forumu - Küresel Ekonomiye Entegrasyon Sürecinde Büyüme Dizisi No.1, TÜSİAD-T/2008-02/453, Istanbul.