The political economy of Turkey's trade relations: Expensive enmities and cheap amities

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Thesis Type: Postgraduate

Institution Of The Thesis: Hacettepe Üniversitesi, Sosyal Bilimler Enstitüsü, Uluslararası ilişkiler A.B.D., Turkey

Approval Date: 2017

Thesis Language: English

Student: EMRULLAH CAN KILIÇ

Principal Supervisor (For Co-Supervisor Theses): ITIR İMER

Open Archive Collection: AVESIS Open Access Collection

Abstract:

Pre-occupying a great number of economists, philosophers, politicians and thinkers for centuries, the vices and virtues of international trade have been a long-lasting matter of discussion. Differing and conflicting roles have been attached to foreign trade throughout the history. However, trade continued to be a pivotal means of sharing global wealth and international interaction. After the Second World War (WWII), a well-functioning international economic order, one of whose main pillars is the multilateral trading system, was regarded as an indispensable necessity for the maintenance of post-war international peace and order. In the multilateral trading system established after the WWII, international community sought to liberalise trade under the GATT and consequently, WTO. Abandoning its import-substitution policies and embracing export-led strategy starting from the 1980s, Turkey has aspired to achieve a greater integration with the post-war economic order, which was based on the idea of free trade. In particular, Turkish foreign policy has undergone a distinctive transformation in the last two decades, placing a greater emphasis on trade relations with the neighbours and geographies, which had previously been beyond the scope of Turkish foreign policy. In this period, trade-related economic considerations led to a considerable rapprochement between Turkey and its neighbours; specifically, Russia, Iran and Iraq. Relations with these countries dramatically improved due to strong trade relations, which not only contributed to the increase in the national wealth of these countries but also resulted in peace-inducing effects. In this regard, this thesis aims to highlight and analyse the role of economic interests and gains in the transformation of Turkish foreign policy within a political economy perspective. Besides, trade-related interdependencies are discussed with the aim of scrutinising non-economic contributions of international trade to peace and cooperation among nations. Discussions on Russia, Iran and Iraq suggest that economic interests brought Turkey closer to these nations and vice versa, while improved economic relations made hostilities less likely among these countries. Putting forth economic and non-economics dimensions of Turkey's trade relations with these nations, this thesis also proposes a number of policy recommendations for Turkey's foreign trade policy. In this respect, this study concludes that Turkey must sustain a well-tailored foreign trade policy as an integral part of its foreign policy not only for material gains but also for non-economic contribution of trade to Turkey's engagement in international arena. For this purpose, key recommendations such as the importance of service trade, the removal of structural inconsistencies, the emphasis on gravity model, the potential of defence industry exports as well as the significant role of access to cheap energy are put forth. Finally, these general observations are complemented by country-specific recommendations, which take peculiarities of Russia, Iran and Iraq into consideration in order to find out further gains in trade relations with these countries.