Assessing recent Turkey’s foreign trade performance

Abstract

Turkey`s foreign trade performance compare with its own past and with its majortrading partnersincreased significantly over the last decade. This increase seems related to the growth trend of exports by geographical destinations. Recent global financial and economic crises and worsening geo–political environment challenged Turkey’s foreign trade as well. Turkey’s foreign trade increased nearly by 3–foldthrough exporting the risky countriessince 2003.The aim of this article is to examine Turkey’s foreign trade by focusing on increased exposures of export destinationsfor the period of 2003–2013. In this study, export destinations’ rating are used to calculate export exposure. The results suggest that finding new markets especially in neighborand least developed countries caused new risksfor Turkey, increasing export exposure. This exposure can be seen in the deterioration of sovereign rating of export destinations, from A+/A to BBB. This seems to suggest that even though Turkey have increased foreign trade with the new markets, this exposure should be covered by well–designed policies as Turkey suffers from foreign trade deficit continuously. Turkey should attempt on policy reform which would increase its competitiveness in export markets and productsand thus enable it to increase its ranking in the World trade..