International Trade in Turkey

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International trade in Turkey

December 2012

Summary :Turkey at a glance......................................................3Economy of Turkey....................................................3International Trade - now and then.........................4Exports........................................................................5Imports.......................................................................7Trade balance.............................................................8Trade agreements and policies.................................8International Trade strategy...................................10Conclusion................................................................11

Turkey at a glanceTurkey, officially known as Republic of Turkey is an Eurasian country located in the Western Asia and in Southeastern Europe. Bordered by eight countries (Bulgaria, Greece, Georgia, Armenia, Azerbaijan,Iran,Iraq and Syria) Turkey's location at the crossroads of Europe and Asia makes it a country of significant geostrategic importance. In addition to its strategic location, Turkey's growing economy and diplomatic initiatives have led to its recognition as a regional power in the Middle East. The capital city is Ankara, but the largest city in the country is Istambul and the official language is Turkish. Turkey has the 15th largest GDP-PPP and the 17th largest nominal GDP in the world.Economy of Turkey During the first six decades of the republic, between 1923 and 1983, Turkish government intervened heavily in agricultural sector with strict government planning of the budget and the government imposed limitations over private sector participation, foreign trade, flow of foreign currency, and foreign direct investment. However, in 1983 Prime Minister Turgut Özal initiated a series of reforms designed to transform the economy from a statist system to a more private-sector, market-based model.Turkey, a country of 74 million inhabitants, has an economy in transition, a relatively high degree of dependence on agriculture (11% of its territory is cultivated) and heavy industry, and a tertiary sector in full expansion (hotel and catering business). After going through a serious economic and political crisis in 2001, Turkey has made a spectacular recovery thanks to a more favorable political climate but also to monetary, fiscal and structural reforms inspired by the World Bank and the IMF. Turkish economy is also based on manufacturing (country's number one industrial activity). Since the 1980s, tourism has also been a significant source of income: Turkey is one of the ten most visited countries in the world. The financial crisis of course had an effect on the growth of Turkish economy; nevertheless the country recovered relatively quickly.The government has undertaken large economic reforms: adoption of a floating currency regime, giving total independence to the Central Bank, budgetary discipline and inflation control.However, the Turkish economy remains vulnerable due to its high dependence on exports and foreign investment. With the current economic crisis, the unemployment rate has soared to around 15%.

International Trade - now and then
Trade played a minor role in the Turkish economy before 1980, but grew rapidly after the economic reforms promoted liberalization of foreign trade. These reforms were designed to remove price controls , decrease subsidies , reduce tariffs , and promote exports. In addition to rapid growth in both exports and imports, the reforms brought a change in the structure of foreign trade, and the predominant role of agricultural products came to an end with the emergence of a greater emphasis on industrial products.Turkey has gradually opened up its markets through economic reforms by reducing government controls on foreign trade and investment and the privatisation of publicly owned industries. The reforms, combined with the huge amounts of foreign loans, resulted in rapid economic...
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