Turkey As Full Package Supplier Neidik & Gereffi 14 Oct 2004

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Turkey As Full Package Supplier Neidik & Gereffi 14 Oct 2004

  1. 1. Turkey’s Emergence as a Full-Package Supplier in the Apparel Value Chain Binnur Neidik and Gary Gereffi Duke University Global Apparel/Clothing Europe Conference at the University of North Carolina, Chapel Hill October 15-16, 2004
  2. 2. Determinants of Turkey’s Emergence as a Full-Package Supplier <ul><li>National Context </li></ul><ul><ul><li>Liberalization of the Turkish economy with the adoption of an export-oriented growth strategy in the 1980s </li></ul></ul><ul><li>International Context </li></ul><ul><ul><li>Long-term association with the European Union, which was Turkey’s development model all along </li></ul></ul><ul><li>Industrial Context </li></ul><ul><ul><li>A good fit between Turkey’s industrial structure and European demand. EU-based apparel firms were smaller and more fashion-oriented than their US counterparts. </li></ul></ul>
  3. 3. Disadvantages of Dependence on the EU <ul><li>Turkey’s dependence on the EU market exposed it to intense price pressures on textiles and apparel </li></ul><ul><ul><li>As the EU lowered its trade barriers in the 1990s and incorporated a larger number of low-cost suppliers into its GSP, Turkey faced increasing competition from Asia. </li></ul></ul><ul><ul><li>The Customs Union, which became effective in 1996, exacerbated the price pressure on textiles and apparel because Turkey was required to impose various taxes and quotas on imports of raw materials used in the manufacture of apparel for export to the EU, esp. raw cotton and cotton yarn. </li></ul></ul>
  4. 4. Turkey’s New Strategy of Internationalization <ul><li>Turkey’s textile and apparel firms expanded their joint-venture partnerships with foreign firms </li></ul><ul><li>More importantly, Turkish firms set up production and trade networks in Eastern Europe and the Turkic Republics of Central Asia to take advantage of unused U.S. quotas in these regions </li></ul><ul><li>Both processes were facilitate by numerous free trade agreements </li></ul>
  5. 5. Future Research Questions <ul><li>What will happen to Turkey’s new sets of regional suppliers when quotas are abolished in 2005? </li></ul><ul><li>Will Turkish lead firms (integrated textile-apparel companies) continue their regional expansion to take advantage of remaining cost differentials, or abandon the strategy altogether? </li></ul><ul><li>Will Turkey pursue a more diversified export strategy involving the USA as well as the EU? </li></ul>
  6. 6. Figure 1
  7. 7. Figure 2
  8. 8. Figure 3

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