22.03.2021-28.03.2021 No 299

TURKEY’S FOREIGN TRADE POLICY AND DYNAMICS International trade plays an important role in For the reported period, Turkey’s imports equaled $926 million, in 2020 it exceeded Turkey’s economy. Export remains a signif- from the Middle East countries grew sub- $23 billion, increasing by almost 25 times. icant source of revenue for the country. Tur- stantially, increasing from $2.9 to $21.2 bil- China’s share in Turkey’s total imports in- key is an important supplier of agricultural, lion and demonstrating 7.3-fold growth. The creased from 2.2% to 10.5%. As a result, the manufacturing and technological products region’s share in the country’s total imports trade deficit increased from a low $727 mil- to the global market. Therefore, this com- increased from 7% to 9.7%. Turkey’s key lion to a record $20.1 billion. Therefore, mentary aims to analyze the dynamics of regional import partners are Iraq, the United China plays an important role on Turkey’s Turkey’s foreign trade, show its key trade Arab Emirates and Egypt. In 2020, Turkey’s trade deficit issue. partners and the evolution of its trade policy. corresponding imports from these countries As international trade remains key for Tur- All calculations based on data from the In- equaled $8.2, $5.6 and $1.7 billion. There- key’s economic growth, the country pursues ternational Trade Centre (2021). fore, Turkey has a trade surplus with the re- a strategy of trade liberalization through ne- Turkey’s foreign trade increased considera- gion amounted to $9.8 billion in 2020. gotiations at the multilateral, regional and Trade with the CIS region remains im- bilateral levels. Turkey has been a member bly since the early 2000-s. Its exports to the of the World Trade Organization (WTO) world surged from $31.3 billion in 2001 to portant for Turkey. The country’s exports to since 1995. At the same time, Turkey ac- $169.5 billion in 2020. For the reported pe- the region increased from almost $2 billion tively conducts free trade agreements riod, the country’s imports grew from $41.4 in 2001 to $14.6 billion in 2020. For the (FTAs), of which the Turkey-EU Customs billion to $219.4 billion. Therefore, com- same period, the CIS’ share in Turkey’s to- Union remains key for the country. It nego- pared to 2001 data, exports in 2020 in- tal exports demonstrated slight growth, in- tiates and concludes FTAs with third coun- creased by more than 5.4 times, while creasing from 6.3% to 8.6%. The country’s tries in parallel with the EU and it currently growth in imports equaled almost 5.3 times. main export destinations in the region in- has 22 FTAs in force. Turkey continues However, the country’s trade deficit wid- clude Russia, Azerbaijan and Ukraine. In FTA negotiations with 17 countries and ened from $10 billion to almost $50 billion. 2020, Turkey’s exports to Russia equaled country blocs, including Japan, Ukraine, the The European Union (EU) remains Tur- $4.5 billion, while its supplies to Azerbaijan US, Canada, India, the Gulf Cooperation key’s largest trade partner. Turkey’s exports and Ukraine were approximately the same Council and MERCOSUR. It should be to the EU increased from $17.8 billion in and amounted to $2.1 billion. For the re- noted that many of Turkey's FTA partners ported period, Turkey’s imports from the re- are relatively small trade partners of the 2001 to more than $82 billion in 2020. For gion increased from $4.6 billion to $24.3 country. Previously, Turkey's FTAs covered the reported period, a share of the EU in Tur- billion. Russia also ranks first in terms of top only trade in goods. However, the country key’s total exports decreased from 56.7% to import partners from the region. In 2020, started to conduct deep FTAs as with the Re- 48.4%. Germany, the United Kingdom and Turkey imported products from Russia public of Korea. The FTA with Korea in- Italy are the top three export partners of Tur- worth $17.9 billion. The top three import cludes commitments on investment and ser- key. In 2020, their corresponding shares in partners also include Ukraine and Kazakh- vices. Turkey’s FTAs under negotiations in- Turkey’s total exports to the EU countries stan, from which the country’s imports clude deeper commitments and disciplines equaled 19.5%, 13.7% and 9.8%. Turkey’s on intellectual property, competition, dis- amounted to $2.6 and $1.2 billion, respec- pute settlement, and trade remedies. It is im- imports from the EU countries also grew tively. Therefore, Turkey has a large trade substantially. While in 2001 it equaled portant to note that Turkey’s applied tariffs deficit with the CIS. Analysis of the bilateral remain comparatively low but differ across $19.8 billion, in 2020 it amounted to $78.9 trade flows between Turkey and the CIS re- sectors. Moreover, under its obligations to billion. However, the share of the EU in Tur- gion shows an important role of energy WTO Turkey has the scope to increase tar- key’s total imports decreased considerably. products and metals in their mutual trade. iffs further because 50% of its tariff sched- For the reported period, it declined from The CIS provides Turkey with crude oil, ule is unbound. Expectations from the re- 47.9% to 36%. Germany remains the coun- natural gas and metals, prices for which cently concluded FTAs are high. The FTA try’s top import partner, followed by Italy grew substantially since the early 2000-s. between Turkey and the United Kingdom, and France. In 2020, their corresponding Both higher prices and increasing consump- which took effect on January 1, 2021, is rec- shares in Turkey’s total imports from the EU tion in Turkey can explain the large trade ognized as one of the most important trade were equal to 28%, 11.6% and 8.8%. There- deficit between Turkey and the CIS region, deals of Turkey since its 1995 Customs Un- fore, in 2020 Turkey’s trade surplus with the which in 2020 amounted to $9.7 billion. ion with the EU. The FTA will substantially EU countries amounted to $3.1 billion, The US is also an important market for Tur- decrease costs for Turkish producers as in while in 2001 it had a trade deficit equaling key’s products. The country’s exports to the the absence of the deal, about 75% of Turk- ish exports to the UK would have been sub- $2 billion. US increased from $3.1 billion in 2001 to ject to tariffs, causing losses of some $2.4 Turkey’s other important trade partners in- $10.2 billion in 2020. At the same time, the billion. The FTA will eliminate this risk. It clude countries of the Middle East, the Com- US share in Turkey’s total exports declined is important to note that besides industrial monwealth of Independent States (CIS) re- from 10% to 6%. Turkey’s imports from the products, the agreement includes agricul- gion, the United States (US) and China. Tur- US also grew from $3.3 to $11.5 billion. The tural goods. A planned FTA with Ukraine key’s exports to the Middle East countries US share in Turkey’s total imports also de- aims to double bilateral trade and increase it surged. While in 2001 exports amounted to creased from 7.9% to 5.2%. to $10 billion. According to officials of the $3.3 billion, in 2020 it reached almost $31 Turkey was able to significantly increase its countries, the FTA will further strengthen billion, increasing by 9.4 times. Iraq is Tur- exports to China. While in 2001, its supply bilateral economic ties. key’s largest destination market in the Mid- was low and amounted to $199 million, in Thus, Turkey remains an important player in 2020 it surged to $2.9 billion demonstrating international trade. The EU is the largest dle East. In 2020, Turkey supplied to Iraq trade partner of the country. However, trade products worth $9.1 billion. The country’s an almost 14.6 times increase. However, de- spite China’s share in Turkey’s total exports with other regions and separate countries in- top three trade partners also include Israel creased substantially during the last two and Egypt, where Turkey’s exports increased from 0.6% to 1.7%, it remained decades. Turkey pursues both multilateral- amounted to $4.7 and $3.1 billion, respec- low compared to other above-mentioned ex- ism and regionalism and the increasing tively. The Middle East’s share in Turkey’s port markets. However, China became one number of FTA’s would continue to posi- total exports increased from 10.6% in 2001 of the key import partners of Turkey. While tively contribute to the economic growth to 18.2% in 2020. in 2001 Turkey’s imports from China process of the country in general.

Written by Azimzhan Khitakhunov, Eurasian Research Institute, Kazakhstan Politics, Foreign Affairs, and Security Economy, Finance, and Energy Society and Culture  The President of Kazakhstan Kassym-  The Khorgos dry port, located between  The Secretary-General of the Turkic Jomart Tokayev had a phone conversation Kazakhstan and China, demonstrated a Council, Baghdad Amreyev held a meet- with his Russian colleague Vladimir Putin. record cargo traffic in 2020 despite the ing with the Ambassador Extraordinary The Presidents discussed a wide range of pandemic. Customs authorities recently and Plenipotentiary of Turkmenistan to issues, including trade, economic and mil- announced that almost five thousand trains Kazakhstan Batyr Rejepov. During the itary-technical cooperation, and the crea- passed through the port. According to the meeting, Ambassador Rejepov said that tion of a digital platform in Kazakhstan. Khorgos officials, the port significantly President of Turkmenistan Gurbanguly They also mentioned the importance of the improved its services. It expanded the Berdymukhamedov was interested in fur- Comprehensive program of Economic Co- range of products, optimized the cargo ther development of relations between operation for 2021-2025 between the two handling process, reduced loading times Turkmenistan and fraternal Turkic Speak- governments, which is expected to be and simplified customs clearance. Moreo- ing states and that he would participate in signed in Kazan in upcoming April. Presi- ver, the authorities try to reduce the clear- the upcoming Summit of the Turkic Coun- dent Tokayev requested an additional sup- ance procedures to 20 minutes (Qazaq TV, cil. The Secretary-General Amreyev ply of the Sputnik V vaccine to Kazakh- 25.03.2021). hailed the decision of the Turkmen Presi- stan (Kazinform, 23.03.2021).  Recently, the Prime Minister of Kazakh- dent and noted that Turkmenistan has al-  During his visit to Tashkent, the Prime stan Askar Mamin visited Moscow and ways been an integral part of the Turkic Minister of Kyrgyzstan, Ulukbek Mari- had a meeting with his Russian counter- World (Turkkon.org, 25.03.2021). pov, noticed the importance of transport part Mikhail Mishustin. The parties dis- and transit cooperation with Uzbekistan.  The mayor of Tashkent Jakhongir Artik- cussed a wide range of issues and urged to khodzhaev visited Dushanbe, the capital He mentioned that Uzbekistan remains a boost trade between the countries, which key transit country for penetration to mar- of Tajikistan, where he met with the mayor was negatively affected by the pandemic. of Dushanbe Rustam Emomali. The kets of Afghanistan and Pakistan by Kyr- However, recent data shows that trade gyz producers. Maripov called to continue mayors expressed satisfaction with the turnover in many sectors is rising again. level of friendly relations between Tajiki- negotiations on the China-Kyrgyzstan-Uz- Mishustin mentioned successful joint ef- bekistan railway project explaining it by stan and Uzbekistan as well as between the forts of the countries within the Eurasian two capitals. The sides discussed specific stability and durability of the railroad Economic Union. The Prime Ministers transportation. The Prime-Minister be- issues related to the development and ex- agreed to work on the expansion of the pansion of cooperation between the capital lieves that the project will contribute to the Russian-Kazakh cooperation (TASS, expansion of mutual and regional trade cities of the two countries (Avesta.tj, (Kabar.kg, 26.03.2021). 22.03.2021). 24.03.2021).  According to authorities of Belarus’ Agri-  According to the Ministry of Foreign Af- culture and Food Ministry, the country  Dushanbe has been declared the Cultural fairs of Kazakhstan, the Turkic Council plans to increase meat product exports up Capital of the CIS in 2021. The handover Summit will be held via video conference ceremony of the certificate "Dushanbe - on March 31. Initially, it was planned that to $1 billion in 2021. In 2020, despite the pandemic, Belarus exported 400 thousand the cultural capital of the CIS-2021" to the leaders of the Turkic world countries and mayor of the capital, Rustam Emomali, the Prime Minister of Hungary, an ob- tons of meat to 24 countries and was able to increase the export by almost 11% in was held at the State Academic Opera and server state, will attend the summit in Tur- Ballet Theater of Tajikistan named after kestan city in Kazakhstan. However, due physical terms. The country started to pen- etrate markets in South-East Asia and the Sadriddin Aini. The status involves hold- to the epidemiological situation, the for- ing a series of cultural events and restora- mat of the meeting was changed to online. Middle East. In 2020, meat export revenues equaled $973 million (BelTA, tion of historical monuments in the city It is expected that the Summit will declare (Centralasia.news, 24.03.2021). Turkestan as the spiritual capital of the 24.03.2021). Turkic world (Kazinform, 23.03.2021).  The total public debt of Uzbekistan contin-  An international friendship park will be  The Deputy Minister of Foreign Affairs of ues to increase. While in 2019 it amounted built on Makhtumkuli Street in Ashgabat. Ukraine Vasyl Bodnar and the Secretary to $17.8 billion, in 2020 it reached $23.3 The decision was made during the meeting of the Ministry of Foreign Affairs of Mol- billion. According to forecasts, the debt of the Mayor of the Turkmen capital, dova Dumitru Socolan took part in the will increase to $28.3 billion in 2021 and Yaztagan Gylydzhov, with an Uzbek del- Ukrainian-Moldovan political consulta- reach 45.3% of the country’s GDP. De- egation led by the Mayor of the capital of tions. The sides discussed the implementa- spite growing figures, the indicator re- Uzbekistan Jakhongir Artykhodjaev. The tion of the agreements reached during the mains moderate and safe for macroeco- park will be built on an area of 3 hectares last visit of Moldovan President Maia nomic stability as the set limit of the coun- in the historical center of Ashgabat and Sandu to Kyiv. The parties also discussed try is 60% of the annual GDP. Additional symbolize friendship, unity and cultural the ways to deepen cooperation with the expenditures to overcome the conse- proximity of the peoples of the two states EU and the course of European integration quences of the pandemic caused higher (Centralasia.news, 23.03.2021). of the two states (Ukrinform.net, debt accumulation (UzReport,  The President of Turkey, Recep Tayyip 26.03.2021). 24.03.2021). Erdogan approved the protocol on the fi-  The Armed Forces of Uzbekistan and Tur-  Russia’s agricultural regulator Ros- nancing of the International Turkic Cul- key held a joint military exercise near the selkhoznadzor allowed eight companies ture and Heritage Foundation. According training ground in the South-Western Spe- from Azerbaijan to resume tomato ex- to the document, the budget of the Interna- cial Military District near the Uzbek city ports. This decision resulted from joint ef- tional Turkic Culture and Heritage Foun- of Termez. On the first day of the exer- forts of the Rosselkhoznadzor and Azer- dation will be formed from compulsory cises, the military personnel of the two baijan Food Safety Agency, which started contributions of all member-states of the countries overcame a 15-kilometer com- to conduct video inspections of Azerbai- Cooperation Council of Turkic-speaking plex tactical strip, performed close combat jani enterprises. In total, Russia lifted a States (Turkic Council). Currently, the or- elements and worked out survival training ban on imports for 82 tomatoes and 46 ap- ple producers from Azerbaijan. The export ganization has five member-states: Azer- in extreme conditions. The military troops baijan, Kazakhstan, Kyrgyzstan, Turkey of the two sides also took part in the sports potential of these companies is almost 237 competitions organized at the training thousand tons, which far exceeds Azerbai- and Uzbekistan (Azertag.az, 26.03.2021). ground (Eadaily.com, 23.03.2021). jan’s last year's tomato exports to Russia  Uzbekistan provided humanitarian aid to  The Deputy Foreign Ministers of the Cen- of nearly 180 thousand tons (AzerNews, Kyrgyzstan donating 20 vehicles, 10 tral Asian countries, the Republic of Azer- 25.03.2021). Volkswagen Caddy Cargo Class A and 10 baijan and the Parliamentary Deputy Sec-  According to the Ukrainian Agribusiness ISUZU D-Max 4x2 Class B ambulance retary of State of the United Kingdom of Club, the country’s population started to vehicles. The ambulances are equipped Great Britain and Northern Ireland at- consume more fruits. This conclusion is with first aid kits: portable oxygen cylin- tended an online meeting held on the oc- based not only on consumption statistics der with reducer and humidifier, tonome- casion of the International Day of Navruz. but also on fruit import data. In 2020, the ter, phonendoscope, ventilator kit, oxygen The participants spoke about the wide- country imported 1 million tons of various masks, fixation systems for patients with spread celebration of Navruz in Central fruits, which was 8% more than in 2019 injuries, cervical spine fixators, spinal Asia and the international significance of and exceeded five years ago figures by 1.5 shield for patients with spinal injuries, this ancient heritage. A video about the times. The main import items of the coun- nebulizer, gurney and wheelchair. The ve- celebration of Navruz in the Republic of try included bananas, tangerines, oranges, hicles will be distributed to health care in- Tajikistan was shown at the meeting (Cen- lemons and peaches (Ukrinform, stitutions of different parts of the country tralasia.media, 25.03.2021). 26.03.2021). (Cn.kabar.kg, 26.03.2021).

Prepared by Zhengizkhan Zhanaltay and Kanat Makhanov