Rue Belliard 4 6 1040 Brussels Belgium infoecipe

Rue Belliard 4 -6, 1040 Brussels, Belgium. info@ecipe. org, www. ecipe. org An Evaluation of Changing Patterns in EU Trade Policy and EU’s Role in the Global Economy Reflections on Relations with Turkey Presentation, IKV/Yeditepe Conference, Istanbul, May 14, 2010 Fredrik Erixon www. ecipe. org

Rue Belliard 4 -6, 1040 Brussels, Belgium. info@ecipe. org, www. ecipe. org Fredrik Erixon’s A Short History of Nearly Everything In General and For Everyone

Rue Belliard 4 -6, 1040 Brussels, Belgium. info@ecipe. org, www. ecipe. org My Presentation • EU Trade: Some reflections • The role of trade for structural change • The role of China in EU trade and growth • EU and the global economic crisis • EU-Turkey relations: some reflections

Rue Belliard 4 -6, 1040 Brussels, Belgium. info@ecipe. org, www. ecipe. org EU trade expansion continues

Rue Belliard 4 -6, 1040 Brussels, Belgium. info@ecipe. org, www. ecipe. org Trade Sector Growth (in %-units) 1993 -2007 1975 -1990 Germany 42 Poland 38 Spain 26 7 8 5 United States 10 N/A

Rue Belliard 4 -6, 1040 Brussels, Belgium. info@ecipe. org, www. ecipe. org Share of national export in world export 25 20 EU (27 countries) 15 EU (25 countries) Canada 10 United States China (excl. Hong Kong) 5 Japan 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Rue Belliard 4 -6, 1040 Brussels, Belgium. info@ecipe. org, www. ecipe. org Globalization of supply chains

Rue Belliard 4 -6, 1040 Brussels, Belgium. info@ecipe. org, www. ecipe. org Structural features of EU trade and growth • Trade has a central role in EU growth and structural change – Especially with unflexible labour markets/wages • EU trade increasingly global – shifting Eastwards • Trade expansions reflects fragmentation of supply chains • China plays a remarkably important role in EU trade and structural change

Rue Belliard 4 -6, 1040 Brussels, Belgium. info@ecipe. org, www. ecipe. org 1999 2000 2001 2002 10, 000 -30, 000 -50, 000 -70, 000 OTHER -90, 000 -110, 000 -130, 000 -150, 000 -170, 000 MISCELLANEOUS MANUFACTURED ARTICLES MACHINERY AND TRANSPORT EQUIPMENT BASIC MANUFACTURES CRUDE MATERIALS, EXCEPT FUELS 2003 2004 2005 2006 2007

Rue Belliard 4 -6, 1040 Brussels, Belgium. info@ecipe. org, www. ecipe. org

Rue Belliard 4 -6, 1040 Brussels, Belgium. info@ecipe. org, www. ecipe. org

Rue Belliard 4 -6, 1040 Brussels, Belgium. info@ecipe. org, www. ecipe. org EU trade: some reflections • Services: slow GDP and trade growth, esp of high-yielding services • Partially offensive abroad, but defensive at home • Service sector growth in EU largely reflects expansion of public sector

Rue Belliard 4 -6, 1040 Brussels, Belgium. info@ecipe. org, www. ecipe. org Average No. of employed (Sweden, 100’s)

Rue Belliard 4 -6, 1040 Brussels, Belgium. info@ecipe. org, www. ecipe. org EU trade: some reflections • EU is not protectionist and not moving in that direction – Problems remain, but not going in the wrong direction • ”Diminishing giant” syndrome

Rue Belliard 4 -6, 1040 Brussels, Belgium. info@ecipe. org, www. ecipe. org

Rue Belliard 4 -6, 1040 Brussels, Belgium. info@ecipe. org, www. ecipe. org EU-Turkey relations: some reflections • Unbalanced dependency • Trade has not expanded as fast as possible

Rue Belliard 4 -6, 1040 Brussels, Belgium. info@ecipe. org, www. ecipe. org EU-Turkey relations: some reflections 200000 EU 27 import from Turkey (mn EUR) 1800000 1600000 1400000 1200000 100000 800000 600000 400000 200000 t M sc m M ac an hi n un f ac er y ds M an g oo s al C he m ic o i An im al /V eg fu al er in C ls s el trl m de ra ve Be ru M Fo od / An im al s ge s 0

Rue Belliard 4 -6, 1040 Brussels, Belgium. info@ecipe. org, www. ecipe. org EU trade balance in Machinery and Transport (Mn EUR) 60000 40000 20000 China (excl. Hong Kong) 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 South Korea Turkey -20000 Russian Federation India -40000 -60000 -80000

Rue Belliard 4 -6, 1040 Brussels, Belgium. info@ecipe. org, www. ecipe. org EU trade balance in manufacture goods (mn EUR) 20000 0 2001 2002 2003 2004 2005 2006 2007 -20000 China (excl. Hong Kong) -40000 Turkey Russian Federation -60000 India South Korea -80000 -100000 -120000

Rue Belliard 4 -6, 1040 Brussels, Belgium. info@ecipe. org, www. ecipe. org EU trade balance in food, drinks, tobacco (mn EUR) 0 2001 2002 2003 2004 2005 2006 2007 -1000 -2000 -3000 -4000 -5000 -6000 -7000 -8000 -9000 -10000 Brazil Argentina China (excl. Hong Kong) Turkey

Rue Belliard 4 -6, 1040 Brussels, Belgium. info@ecipe. org, www. ecipe. org EU-Turkey relations: some reflections • EU-Turkey trade dependencies are weakening • Turkey’s trade profile suggests EU membership, not CU or AA • Turkey’s role in EU structural change is weak, but EU’s role in Turkey’s structural change very strong • EU input import from Turkey not significant; automotive sector is an exception • Low inward FDI from EU; little substitution • Agriculture, agriculture: however, trade diversion • Services: potentially strong contribution from Turkey to structural change and growth