The importance of free trade and GVC participation in Turkey

1. THE
IMPORTANCE
OF FREE TRADE
AND GVC
PARTICIPATION
IN TURKEY
A comparative assessment
between automobile and
apparel sectors in Turkey

2. TRADE COSTS
ARE INCURRED
MULTIPLE TIMES
Protectionism leads to lower
growth productivity and avoids
Turkey from engaging with the
rest of the world trade, exchange
technology, be a part of
innovation, and specializing only
in specific goods and services.
Even the President of Turkey in
2019 mentioned at the meeting
with Japan in Tokyo: „ The rise of
protectionism in trade and
disruptions in free trade is
worrisome.“

3. TURKEY TAKES A
PROTECTIONIST
PATH, INCREASING
IMPORT TAXES
AMID CRISIS
This is especially critical for
Turkey since it exports
intermediate goods and imports
final products such as
automobiles and electronics.

4. PRODUCING
LOCAL ELECTRIC
VEHICLES IN
TURKEY
The vehicle below is the
first electric vehicle
produced in Turkey.
This was a political move
rather than an economic.

5. PRODUCING
LOCAL ELECTRIC
VEHICLES IN
TURKEY
Turkey exports metal
manufacturers and
transport equipment for
the automobile sector.
There is not enough
sectoral knowledge to
produce electric vehicles in
Turkey.

6. PRODUCING
LOCAL ELECTRIC
VEHICLES IN
TURKEY
R&D takes a while and it is
difficult to specialize in the
automobile sector in
Turkey.
Turkey had better focus on
providing intermediate
goods to global car
producers instead.

7. THE APPAREL
SECTOR IN
TURKEY
Turkey has extensive
sectoral knowledge in
garments.
The quality of the clothing
and textile industry is well
developed.

8. THE APPAREL
SECTOR IN
TURKEY
Turkey even succeeded in
creating worldwide known
clothing companies i.e
MAVI.
PUMA jerseys are also
produced in Turkey.

9. ON WHICH
SECTORS
SHOULD TURKEY
SPECIALIZE?
The government should
stop on its claim to
produce electric vehicles.
Instead, it should support
the apparel sector in
Turkey.
The clothing and textile
industry is undoubtedly
what Turkey is good at.
To do so, Turkey has to
take a step back from the
protectionistic path and
continue to support free
trade.

10. VALUE OF
TEXTILES
EXPORTED FROM
TURKEY FROM
2000 TO 2018

11. ON WHICH
SECTORS
SHOULD TURKEY
SPECIALIZE?
Trade barriers will only
harm the Turkish economy,
instead of benefits.
On the other hand, free
trade can bring more
technological innovations
to the apparel sector in
Turkey.
Robotics can be widely
used and Turkey can
become more capital
intensive, eventually
creating more high skill
jobs.

12. POLICY
RECOMMENDATI
ON
Applying trade barriers will also harm our
exports in intermediate goods, which are
used in the automobile sector by other
countries.
To conclude, Turkey should focus on
producing what it is good at. The extensive
knowledge that has been gained over the
years in the textile industry should be the
strong side of Turkey.
Turkey needs to continue its commitment
to free trade and GVC participation to
achieve overall GDP growth.
Otherwise, it will adversely affect its
imports and exports.