Greek–Turkish bilateral trade

by Dimitris Tsarouhas & Nüve Yazgan (2018): Trade, non-state actors and conflict: evidence from Greece and Turkey (Cambridge Review of International Affairs)

an excerpt of the abovementionned article

Greek–Turkish economic relations: an assessment
Bilateral trade
Bilateral trade volumes remained miniscule until the late 1990s, despite the two nations’ geographic proximity. After the rapprochement period began, bilateral trade volumes reached more than US$1 million in 2003 for the first time. Greek and Turkish political elites actively supported the increase, yet that was not enough to expand economic relations. Administrative and bureaucratic adjustments were necessary for the trend to continue. The 2003 agreement on preventing double taxation revealed mutual willingness to overcome technical obstacles (Tsarouhas 2009, 46). The volume of bilateral trade has expanded momentously as a result, reaching US$3,413.370 billion in 2008. In 2013, it reached $5,643.463billion, the highest ever recorded.

In 2012–2014 Turkey was Greece’s primary export partner despite being a non-EU country.2 According to 2014 data, Turkey’s share was 12.16 per cent of total Greek exports, the highest percentage ever recorded. In the context of Greece’s economic crisis and Turkey’s rising purchasing power, geographic proximity allowed for rapid trade expansion. Turkey certainly presents a significant export market for Greek products . Further, since Turkey is the less dependent party in this relationship, it could, in a conflict scenario, utilize its political resources accordingly. Yet the trade pattern between the two is not characterized by high interdependence in the sense that costs associated with its evolution remain low. Greek–Turkish bilateral trade has benefited both sides. Our interviewees point out the need for further development as well as investments between the two countries. Importantly, negative competition on trade has not been practised. This may be linked to product specialization, to which we turn next.

Greek exports mainly consist of manufactured products (32.9 per cent in 2014) and fuels and mining products (45.6 per cent in 2014).5 Refined petroleum products for the most parts are not produced but processed in Greece, before being exported to Turkey. The lack of diversity in Greek exports can be problematic, making the country vulnerable to external economic conditions, such as global price fluctuations (Papadopoulos 2008, 14–15). Following the 1996 EU–Turkey CU agreement, Turkey eliminated tariffs on manufactured products that are imported from the EU, which paved the way for a significant increase. The CU agreement has had positive impacts on the increase in both Turkish exports and imports (Neyapti, Tas¸kın and €Ung€or 2007), underscoring the role of institutions and agreements in boosting trade ties, albeit indirectly. Yet it was an incomplete CU not covering agricultural products and services, which is why Turkey is currently pushing for CU modernization (Vesterbye and Akman 2017). Turkey’s exports to Greece have been diverse: fuels, chemicals, plastic and rubber, textiles and clothing, stone and glass, metals and machinery are exported. In 2015, the volume of trade between the two countries dropped to US$2.9 billion. This resulted from the imposition of Greek capital controls as well as a decrease in world oil prices. While Turkish imports from Greece were heavily affected, Turkish exports to Greece remained stable compared with 2014. This indicates the importance of economic stability for the evolution of trade relations: the two states currently face economic problems of differing magnitude. More importantly, the global economy may be entering a phase of protectionist barriers. The 2016 data is indicative, as Greek exports to Turkey were recorded as US$1,495,306.75 and imports as US$1,545,325.53.

for an introduction to the article click to the link

για μια γενική επισκόπηση του θέματος στα ελληνικά και σε επίπεδο μεταπτυχιακής διατριβής κάνετε κλικ στο σύνδεσμο