Global shocks, green policy, and the welfare logic of Türkiye’s steel trade
Abstract
This paper revisits the classical concepts of trade creation and trade diversion through the lens of contemporary global disruptions that are reshaping the political economy of trade in the twenty-first century. The focus is on the global steel economy—an arena where protectionism, geopolitical rivalry, and decarbonization collide most visibly, and where Türkiye’s position reveals the dilemmas faced by mid-sized, trade-dependent economies. The discussion in this paper traces how welfare today depends as much on carbon performance and adaptive capacity as on traditional price and tariff structures, calling for a new generation of research that links trade policy, climate governance, and distributional outcomes. Rather than offering formal estimation, this paper seeks to provoke inquiry: How can welfare be redefined under climate constraints? Can integration remain a source of collective prosperity when carbon becomes the new currency of competitiveness? These are the questions Güzin Erlat might ask today—and the ones her students must now answer.
Keywords
Global trade, steel industry, protectionism, climate policy, welfare, competitiveness, Türkiye
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