Appleyard, Field & Cobb Chapter 1

World trade
World output: $50 trillion at current prices (2007)
Merchandise exports were $10.2 trillion (2005) while in

1985, it was $2 trillion

Table 1

Table 1: Growth in volume of world goods, production and trade, 1963-2005 (average annual percentage change in volume)

World trade pattern

Throughout the past four decades, international trade

volume has, on average, outgrown production, illustrating how countries are becoming more interdependent.

The geographical composition of world trade

Destination of merchandise exports in 2005

Table 2: Exports and Imports by Region, 2005 (billions of dollars and percentage of world totals)

Regional Trade Structure (%)

Regional Trends
55.8 % of merchandise exports of countries in North

America went to other North American countries

Asian trade is also an important trade region Emerging countries BRIC (Brazil, Russia, India and

China)

What is traded?
The commodity composition of trade
Manufactures account for 72 percent of trade Among primary goods: fuel accounts for 13.8 percent Among manufactured goods: machinery and transport

equipment account for 37.9 percent Services ?

World Trade in Services

More than US$ 2 trillion in 2005 (one-sixth of the total

trade in goods and services) Services are 77% of GDP in France; 69 % in Germany, 77 % in the U.S., 73% in the United Kingdom and 68% in Japan Includes: wholesale and retail trade, restaurants and hotels, personal services, community services, social services and government services.

International Standard Industrial Classification (ISIC)

Wholesale and retail trade, restaurants and hotels,

transport, storage, communications, financial services, insurance, real estate, business services, personal services, community services, social services, and government services.

Leading exporters and importers of commercial services, 2005

Service Outsourcing
Foreign Affairs, 2006 Alan Blinder Manufacturing trade vs. service sector trade Figure 2-8

Country level
Germany is the largest country exporter (displaced the

United States in 2003) 6 largest traders (exports plus imports) are: Germany, United States, China, Japan, France and the United Kingdom) which account for 40 percent of world trade On the other hand, almost 200 countries account for about 45 percent

Country level trade

A brief overview

U.S. International Trade

Canada is the most important trade partner both for

exports and imports NAFTA members are the largest multi-country unit Third largest partner is China, followed by Japan, Germany, the United Kingdom, South Korea, Taiwan and France Trade deficit due to China, Japan and Canada

U.S. Merchandise trade by area and country, 2005 (millions of dollars)

Composition of U.S. trade, 2005, (billions of dollars & percentage shares)

Composition of U.S. trade

Capital goods category is the largest single export

category and is dominated by nonelectric machinery.

Sizable net imports occur in consumer goods, autos,

and energy products

Energy products account for 17.6 percent of total

imports

A brief overview

Trade statistics - Turkey

GDP (purchasing power parity):
$902.7 billion (2008 est. in 2008 U.S. dollars) GDP (official exchange rate): $729.4 billion (2008 est.) GDP - real growth rate: 1.1% (2008 est.) GDP - per capita (PPP): $11,900 (2008 est.)

Trade statistics - Turkey

GDP - composition by sector:
agriculture: 8.8% industry: 27.5% services: 63.8% (2008 est.) Labor force - by occupation: agriculture: 29.5% industry: 24.7% services: 45.8% (2005)

Trade statistics - Turkey

Current account balance:

-$41.6 billion (2008 est.)

-$37.7 billion (2007 est.) Exports:

$140.8 billion (2008 est.)

$115.4 billion (2007 est.) Exports - commodities:

apparel, foodstuffs, textiles, metal manufactures,

transport equipment

Trade statistics - Turkey

Exports - partners:
Germany 9.8%, UK 6.2%, UAE 6%, Italy 5.9%, France

5%, Russia 4.9% (2008)

Imports: $193.9 billion (2008 est.) $162 billion (2007 est.)

Trade statistics - Turkey

Imports - commodities:
machinery, chemicals, semi-finished goods, fuels,

transport equipment
Imports - partners: Russia 15.5%, Germany 9.3%, China 7.8%, US 5.9%,

Italy 5.5%, France 4.5%, Iran 4.1% (2008)

Current account deficits

The exports reached $115.3 billion in 2007, but imports

rose to $162.1 billion, mostly due to the rising demand for energy resources like natural gas and crude oil.

Foreign Direct Investment

Turkey is one of the largest sources of foreign direct

investment in central and eastern Europe , with more than $1.5 billion invested in these countries. 32% has been invested in Russia, primarily in the natural resources and construction sector, and 46% in Turkeys Black Sea neighbors, Bulgaria and Romania.
Turkish companies also have sizable FDI stocks in

Poland, at about $100 million.

Agricultural products
As of March 2007, Turkey is the world's largest

producer of hazelnut, cherry, fig, apricot, quince and pomegranate; the second largest producer of watermelon, cucumber and chickpea; the third largest producer of tomato, eggplant, green pepper, lentil and pistacchio; the fourth largest producer of onion and olive

Global players
In 2008, 14 Turkish companies were listed in the

Forbes Global 2000 list - an annual ranking of the top 2000 public companies in the world by Forbes magazine.
The 10 leading companies were:

World Rank

Company

Industry

Revenue (billion $)

Profits (billion $)

Assets (billion $)

Market Value (billion $)

371

Trkiye Bankas

Banking

12.53

1.26

61.19

12.89

384

Akbank Garanti Bankas

Banking

8.17

1.56

61.54

16.26

405

Banking

8.13

1.85

65.48

12.69

639

Ko Holding

Conglomerate

34.84

0.40

40.12

6.69

690

Sabanc Holding

Conglomerate

11.95

0.35

47.60

8.27

879

Turkcell

Telecommunications

4.75

0.90

5.95

22.03

893
909 990 1185

Halk Bankas
VakfBank Tpra Enka naat

Banking
Banking Oil and gas Construction

3.52
4.23 14.19 4.06

0.61
0.57 0.58 0.41

24.51
27.35 4.93 5.38

8.07
5.96 6.48 13.85

Industrial exports
Textiles and clothing also constitutes the largest share

in total exports (19% in 2005), followed by automotive (18%), iron and steel (13%), white goods (10%), chemicals and pharmaceuticals (9%), and machinery (7%).
Izmir Atatrk Organized Industrial Zone (IAOIZ) is

one of the largest and most modern organized industrial zones in Turkey.

Service sector - Turkey

Turkey's economy is no longer dominated by traditional agricultural activities in the rural areas, but more so by a highly dynamic industrial complex in the major cities, mostly

concentrated in the western provinces of the country, along with a developed services sector. In 2007, the agricultural sector accounted for 8.9% of the GDP, while the industrial sector accounted for 30.8% and the services sector accounted for 59.3%

Transportation
The Ankara-Eskiehir section of the line, which has a

length of 245 km and a projected travel time of 65 minutes, is completed. Trials began on April 23, 2007, and revenue earning service began on March 13, 2009. The Eskiehir-Istanbul section of the line is scheduled to be completed by 2009

Financial sector
In 1998, there were 72 banks. In late 2000 and early 2001 a growing trade deficit and weaknesses in the banking sector plunged the economy into crisis. This financial breakdown brought the number of banks to 31. Currently more than 34% of the assets are concentrated in the Agricultural Bank (Ziraat Bankas), Housing Bank (Yap Kredi Bankas), Isbank (Trkiye Bankas) and Akbank. The five big state-owned banks were restructured in 2001.

Communications
Telecommunications were liberalized in 2004 after the

creation of the Telecommunication Authority. Private sector companies operate in mobile telephony and Internet access. There were 19 million fixed phone lines, 36 million mobile phones, and 12 million Internet users by the August, 2005.

Tourism
Tourism is one of the most dynamic and fastest

developing sectors in Turkey. According to travel agencies TUI AG and Thomas Cook, 11 of the 100 best hotels of the world are located in Turkey.
In 2005, there were 24,124,501 visitors to the country,

who contributed $18.2 billion to Turkey's revenues, with an average expenditure of $679 per tourist

International interdependence for selected countries and groups (export of goods and non-factor services as a percentage of GDP)