Piri Reis University

Faculty of Economics and Administrative Sciences

International Logistics and Transportation

GRADUATION THESIS
Türkiye – European Union Trade Relation & Mode Choice

Oğuzhan Düzgün
201834007

Advisor: Ast. Prof. Ahmet Tuğrul TUĞER

 İstanbul June, 2023

Content
• Importance of the Thesis
• Introduction
• Türkiye Commercial and Geographical Status
3.1 Turkey’s Logistics Geography
3.2 Turkey’s Geostrategic Importance for EU
3.2.1 Iron Silk Road
• Türkiye Trade Volume
• What Türkiye Imports and Exports
• What is Eu and features
• What Eu Imports and Exports
• Member States & Features
• EU states trade volume
• Turkey And European Union History
• What’s Customs Union Agreement and Articles
• Trade Modes
• Trade Modes used between EU - Türkiye
• Most efficient routes and firm samples
• Problems between parties
• Source
1.Importance of the Thesis
Since the beginning of the trade, countries aim to strengthen the communities they reside with
extending logistics network, establish commercial and economic cooperation. We see the
reflection of these commercial partnerships between countries as commercial blocks such as
EFTA, PAFTA, EEA, CEFTA (etc.). In my thesis, I will talk about the volume, form, conditions
and importance of trade between Turkey, which is the country I live in, and the European Union,
which is both its close neighbor and one of its important commercial partners.

2.Introduction
Economy is the most important element to determine the destiny of any nation or community
and the goods and services produced domestically and served outside is the most vital
determinator that shows the strength and weakness of the nation in terms of trade operations.
Also, trade is the most vital commercial instrument to improve life standards of the states and
citizens. In addition to that, trade is a way of benefiting from goods and service variety and is the
most important way to enhance firms’ economies and production activities in where they reside.
Since earlier times, people have developed and found trade routes, product and service
development processes, carriage and transportation modes, managerial and operational methods
and most importantly commercial cooperation partners.
In that context, I will create my final project about the commercial relationship between the
European Union and Turkey within the researching instruments I mentioned. While examining
the companies that still work with the European Union countries and I will try to benefit from
route and mode selections of these companies.

3.Türkiye
Turkey has tried to expand its share in the global economy with the investments it has made
since the proclamation of the republic and has also tried to create a ground of trust by aiming to
attract the attention of potential investors and national committees that may come from abroad
with these investments. Also, Turkey is the most crowded country with the 84 million population
according to 2021 counting and with the 1 million birth rate per year compare to rest of the
Europe. Besides, Turkey is a bridge between Asia and Europe in the proper meaning of the word.
So, Turkey is the most optimal outbound route on land to deliver the semi and final products
produced by Europe to crowded Asia depend on distance and gumption. In this context, Turkey
is so important ally and trade partner according to European Union.

3.1 Turkey’s Logistics Geography

Turkey is a country that has land on two continents with the Thrace Region (3%) in Europe and
the Anatolian Region (97%) in Asia. The Sea of Marmara and the Bosphorus are geographical
formations that separate Asia from Europe. Turkey has a total of 3000km (2019 measurements)
road connections and the majority of this connection is T.E.M (Trans European Motorway).
Most of the projects carried out in Turkey in recent years are also on transportation.
Turkey is also a peninsula country surrounded by seas on 3 sides, and these seas
(Mediterranean, Aegean Sea, Marmara and Black Sea) have a connection to the waterways
(Gibraltar and Suez), which are the connecting routes of important trade routes and the ocean. In
addition, the Dardanelles and Istanbul Straits are of great strategic importance, as they are the
only gateway to the open seas of the neighboring countries. Turkey is also a strategic logistics
base as it acts as a bridge to oil-rich neighbors and between Asia and Europe.

3.2 Türkiye’s Geostrategic Importance for EU

Turkey is the bridge between Asia and the Europe in the proper meaning of the word and in this
context, the delivery of raw materials and final products from both Asia and Europe to the
customer can be carried out optionally, even with only one logistics mode, thanks to TEM (Trans
European Motorway). Likewise, the Europe-Turkey-Asia route creates a suitable ground for the
fishyback intermodal transportation modal. For example, products departing from Europe can
reach Asia via Suez via the ports within the Turkish border upon request, or cargo can be
transported to the east of Turkey and then pass through the Suez Canal via the port agreed in the
East of Turkey.

3.3 Turkey's Infrastructure

Infrastructure is the general name for all elements, materials and equipment used from the
beginning to the end of a process. It is also one of the most important elements of the production
process as it ensures that the targeted product comes out of production more effectively and efficiently. In
commercial terms, while the majority of transportation infrastructure such as tunnels, bridges, roads and
similar transportation infrastructure and energy infrastructure such as electricity and natural gas are
covered by the state, the costs of minor modifications that the company wants to have specific to the
company are covered by the company's own investments. In addition, since infrastructure works are
seen as a way to increase the long-term trade volume and increase productivity, all investments
made in this field increase the potential income that may arise in the future"Similarly, Munnell
(1990) found results supporting Aschauer's work in his study with national data, while in his
study with state data from 1970-1986, he determined that a 1 percent increase in public capital
increased national output by around 0.15."
 3.3.1 Highway Infrastructure
Road transportation is one of the most preferred modes of transportation worldwide due to its
low cost in short distances and its ability to deliver to places that other modes of transportation
cannot reach. Another reason for the preference of road transportation is that the wide road
network is comprehensive enough to deliver the product to the customer even in places where
other modes of transportation cannot reach, thus enabling combined transportation when needed.
In this way, the product can be planned and delivered in the fastest and least costly way.

3.3.1.1 Historical Development of Highway Infrastructure in Türkiye

Road infrastructure works in Türkiye began to be gradually formed with the proclamation of the
republic and considering the conditions of the period. In this context, in the first years of the
republic, 13,900 km of highways excluding bridge roads, reached 18,350 km with bridges. The
reason for the lack of road infrastructure at that time was the economic problems caused by the
First World War and the prevalence of the use of vehicles pulled by animals With the loss of the
effect of the war and the widespread use of motor vehicles, the importance given to the highway
increased and approximately 26,100 km more road connection was provided until the effects of
the next war, the Second World War, were felt in Türkiye. In order to aim to distribute industrial
and agricultural products within the country, a great investment was made in the highway
between the years 1950-1960, and the road length of 47,080 km reached 61,452 km in this 10-
year period. After the 1960s, Turkey started to pass into the planned period, and the increasing
industrialization in this period brought traffic problems with it and paved the way for the
transportation sector to pass into the planned period. In this period, express roads were also given
importance and the foundations of the "Bosphorus Bridge", which connects Asia and Europe and
will take about 3 years to be built, started to be laid. Later, in order to respond to the increasing
traffic, the "Fatih Sultan Mehmet Bridge", a project whose foundation was laid in 1975 and
completed in about 5 years, was added to the highway connection. Again, in this period, not only
the bridge works were given importance, but also the first highway, the 24 km "Bosphorus
Bridge-Ring Road", was opened. Later, in 1981, 14 km, Gebze-İzmit and Tarsus-Pozantı
highways were opened in 1984, and Kapıkule-Edirne highways were opened in 1987. In this
process, the length of the highway, which was 24 km at the beginning, reached 241 km in 1990
and 2159 km as of 2015.

3.3.1.2 Major Road Infrastructure Projects in Turkey

 “Osmangazi Bridge and Izmir-Istanbul Highway
 Çanakkale Bridge and Highway
 Yavuz Sultan Selim Bridge (3rd Bosphorus Bridge) and Northern Marmara Motorway
  Eurasia Tunnel
 Gebze – Orhangazi - İzmir Highway (Including İzmir Gulf Crossing and Connecting Roads)
 North Marmara Highway (Including the 3th Bosphorus Bridge) Kınalı - Odayeri Section
 Ankara - Niğde Highway
 Menemen - Alaga - Çandarlı Karayolu
 Aydın Denizli Highway
Çeşmel-Erdemli - Silifke - Taşucu Highway Project Çeşmeli - Kızkalei Section
 Turkey Trans-European Transport Road Network (TEN-T)
 Transport Corridor Europe, Caucasus, Asia (TRACECA)
 Trans-European North-South Motorway Project (TEM)
 Eurasia Road Links (EATL)

ORAL Muhammet, AYDIN Fatih, Historical Development of Highway Transportation in Turkey, Karabük
University Geography Department, 257-266, 2018

Republic of Türkiye General Directorate of Highways / Important and Global Projects

CİĞERCİOĞLU Oğuz, The Effect of Transportation Infrastructure in Turkish Economy on Economic

Growth, Gaziantep University Journal of Social Sciences, 17 (2), 577-591, Submission Date: 24-01-2018,
Acceptance Date: 28-03-2018.

3.3.2 Seaway Infrastructures

The most important reason for the maritime transportation sector to reach its current popularity
is the introduction of the steam engine produced by James Watt in the 18th century, which
enabled the ships that only sailed on inland seas to travel on the open seas and oceans and to
make deliveries to every point of the world. By the 19th century, thanks to these features, its
popularity increased rapidly and it became one of the most common transportation methods used
today. In Turkey, seafaring was initially used for military and domestic maritime trade, and in
1828, when the first steamship started to operate, it started to engage in foreign maritime trade
and started to use the resources at its disposal or new markets where it could supply the raw
materials of the goods it produced.

3.3.2.1 Historical Development of Seaway Transportation in Türkiye

Maritime has evolved in the hands of many civilizations since almost the beginning of history
and has developed itself many times from its earliest form until today. This development in the
maritime sector has generally pursued transportation, military and commercial purposes and has
tried to meet the demand for the sector by making breakthroughs in terms of marine vessels,
transportation methods and equipment, planning, strategy and operations according to the needs.
In addition, the excess carrying capacity of maritime transportation makes it highly popular
despite the fact that products enter delivery addresses relatively slowly compared to other modes.
Thus, since the amount of fuel consumed per product is low, it is both efficient and a sustainable
transportation method due to the low carbon footprint it leaves.

In the transition phase of the planned period, Turkey abolished the 2-year operating
concessions granted to foreign companies and aimed to develop domestic shipping by
nationalizing shipping. In 1932, the old age of the fleet made it difficult to enter ports abroad
and, with the effect of the Great Depression, reduced demand and put the maritime sector in a
difficult situation. For these reasons, State Railways was established in 1933 and the first step
was taken towards modernization in this sector. In 1936, fleet renewal efforts were initiated and
the steps taken in this process led to maritime transport having a share of 27.8% among
transportation modes in 1950. In 1958, Turkey became a member of the International Maritime
Transport and worked with international organizations under the coordination of the Ministry of
Transport, contributing to the commercial and economic development of shipping. By 1962, our
maritime industry had reached a cargo carrying capacity of 798,300 DWT, but 445,000 DWT of
this capacity belonged to ships that were 20-25 years old, so fleet rejuvenation efforts had to be
initiated. During these years, 95% of the shipyards were publicly owned while 5% were privately
owned, and thanks to these public organizations, new fleets replaced outdated fleets. Turkey has
carried out many improvement works and projects in the periods close to the present day of
maritime studies.

3.3.2.2 Major Road Infrastructure Projects in Turkey

 (1979-1983); An industrial zone for shipbuilding was created and developed in Tuzla.
 (1984-1989); It seeks at raising the merchant fleet's tonnage fast..
 (1990-1994); It seeks at raising the merchant fleet's tonnage fast.
 (1995-1999); The principal causes of the fall in orders were the elimination of the VAT
support and the fact that Turkish shipowners were significantly impacted by the freight
crisis.
 (2001-2005); According to the shipbuilding industry, focus will be placed on building
coasters in order to capture a portion of the global shipbuilding market and the domestic
demand generated by Turkey's merchant fleet, which urgently needs to be revitalized and
refurbished.
 (2007-2013); Taking into consideration the outcomes of the Turkish Shipyards Master
Plan, new shipyards will be established, primarily in the Ceyhan region, in order to
design and manufacture military and commercial ships in Turkish shipyards with a high
domestic contribution rate and to renew the Turkish Merchant Fleet.
KOL Bihter, The Importance of Maritime Transportation in Turkey’s Foreign Trade and Its Problems,
Dokuz Eylul University Institute of Social Sciences Department of Business Administration International
Business Administration Program

Foreign Trade and Seaway Transportation -

https://acikerisim.deu.edu.tr/xmlui/bitstream/handle/20.500.12397/10879/253601.pdf?
sequence=1&isAllowed=y

3.3.3.1 Railway Infrastructure

Compared to other modes of transport, the demand for rail transport is generally based on the
transportation of heavy goods, which are heavy in mass and cheap in cost. In addition, it
provides a reasonable transportation experience because it is environmentally friendly, reliable
due to minimal human intervention, minimally affected by weather and traffic conditions, and
has a long-term fixed price guarantee. Despite these advantages, it is only used in certain regions
due to its high investment costs and the fact that it is only used in regions with infrastructure.

3.3.3.2 Historical Development of Railway Transportation in Türkiye

Rail transportation was used in England in the 1700s to transport coal from the mines, but it was
non-motorized and covered only 200 miles across the whole of England. Railway transportation
and the production of the steam engine gained great importance worldwide with the start of the
Industrial Revolution (1760) and pioneered the use of the steam engine in modes of
transportation.

In our country, the importance given to the railroad started in the early 1802s and with the
influence of the Tanzimat Edict, the work on the establishment of the railway network started. In
addition, since all of the railway networks established in our country until the Republican Era
were established with the investments of foreign companies, these railways are very low standard
and technically inadequate. We can analyze the railways built with foreign investments in 3
groups. The first group includes the 130 km railway network between İzmir and Aydın, which
was started in 1839 and completed in 1859. The second group includes lines connecting Istanbul
and Southern Anatolia. The third group is the Rumelia and Orient railroads, which were
established between Istanbul and the Balkans, with a length of 2000 km. However, these
companies built 4018 km of roads until the Republican Period and these roads were included in
the State inventory with the signing of the Treaty of Lausanne.
From the beginning of the Republican Era until 1948, 3802 km of railway construction was
completed in Turkey, and together with the 4018 km of railways remaining from the Ottoman
period, Turkey has a total railway network of 7671 km. However, with the effect of World War
II, the railways were worn out and the transportation capacity was reduced due to import
difficulties. In the transition to the planned period, it was aimed to carry out modernization and
line construction works with domestic facilities with the factories established in Eskişehir, Sivas
and Adapazarı.
Today, the length of lines under the management of the Turkish State Railways (TCDD) has
reached 8452 km. With the addition of 1934 km of secondary roads, we can calculate the length
of railways under the control of TCDD as 10386 km. We can examine all railway networks in
Turkey as follows:

Meserret NALÇAKAN, THE IMPORTANCE OF RAILWAY TRANSPORTATION IN THE

TRANSPORTATION SECTOR FOR THE TURKISH ECONOMY AND ANALYSIS OF TURKISH
DEMAND FOR DOMESTIC RAILWAY TRANSPORTATION BY ECONOMETRIC MODEL

1. Railways in the European part of Turkey

Istanbul-Edirne railway: Together with the Kırklareli-Branch line, its length is 364 km. It is
connected to the European railway network via Bulgaria (Plovdiv-Sofia) and Greece
(Thessaloniki).
2. Railways in the Asian part of Turkey
A. The main axis of our railways:
- Haydarpasa-Eskisehir railway. This road divides into two branches in Eskisehir.
B. Lines connecting these two branches of the main axis:
- Kayseri-Nigde-Ulukisla railway. - Malatya-Çetinkaya railway
C. Lines connecting the main axis to the Black Sea coast:
- Irmak-Cankm-Zonguldak railway
- Sivas-Samsun railway (This road was extended to Çarşamba).
D. Lines connecting the main axis to the Mediterranean coast:
- Yenice-Mersin railway
- Toprakkale-Iskenderun railway
E. The line extending from Lake Van to the Iranian border following the valley of the
Murat River
- Yolçatı-Genç-Muş-Tatvan-Van-Özalp-Çimenova-Kotur line: This line later merges with the
Iranian railroad network.
 F. The line connecting with the Syrian and Iraqi railroads:
- Narlı-Gazi Antep-Ceylanpınar-Nusaybin line. There is a branch on this line to M ardin.
G. Our Western Railways:
- Izmir-Manisa-Afyon railway. This line joins the main axis in Afyon. Railway
Transportation in Turkey 175
- Manisa-Balıkesir-Bandırma railway.
- Izmir-Aydın-Karakuyu-Eğirdir railway. This line has branch lines to Tire. Ödemiş, Söke,
Denizli, Çivril, Isparta and Burdur.
H. New lines connecting the Western Railways to the Main Axis:
- Balıkesir-Kütahya railway. - Karakuyu-Afyon railway.

Selen, H.S. 1943, “Türkiye’nin Yol Sistemi”, Türk Coğr. Der. Sayı:HI-IV. s:359. İstanbul.

1990-1994 TCDD İstatistik Yıllığı. Sayı:105, s:14.

1990-1994 TCDD istatistik Yıllığı, s:40.

3.3.3.2 Iron Silk Road

The Silk Road has managed to keep the trade between Asia and Europe alive by constantly
renewing itself from the past to the present and has ensured that the produced goods and raw
materials reach the delivery destination by various vehicles. The silk road trade, which continues
today, has aimed to deliver by using the "Middle Corridor" on which Turkey is located, with the
investments made to increase the economic volume of China. With its strategic location on both
the Iron Silk Road and the Maritime Silk Road, Turkey acts as a critical bridge for goods to pass
through to the European Union. The goods coming out of China first stop by Kazakhstan and
Azerbaijan, and then they finish their tour by making Kars-Istanbul voyages. Likewise, the goods
coming by sea play a role in transporting products to Eastern Europe by using the Marmara Strait
after passing the Suez Canal. In this way, it brought diversity to the European Union imports and
hosted a fast supply corridor for raw material supply. In addition, it has had the opportunity to
grow its economy by processing the raw materials it supplies and delivering it to China in the
same way.

3.3.3.3 SWOT Analysis of Iron Silkroad

TURAN-SAM: TURAN Stratejik Araştırmalar Merkezi * TURAN-CSR: TURAN Center for Strategic
ResearchesTURAN-SAM Uluslararası Bilimsel Hakemli Dergisi; ISSN: 1308-8041, e-ISSN: 1309-4033; Cilt:
8/İLKBAHAR,Sayı: 30TURAN-CSR International Scientific Peer-Reviewed and Refereed Journal; ISSN:
1308-8041, e-ISSN: 1309-4033; Volume: 8/SPRING, Issue: 30

8https://www.ceeol.com/search/article-detail?id=477885 --- Demir ipekyolu SWOT analizi

http://tucaum.ankara.edu.tr/wp-content/uploads/sites/280/2015/08/tucaum6_9.pdf -
tarihi gelişimi
https://www.proquest.com/openview/4621ad558e79d8ebad2c9cb806db1be2/1?pq-
origsite=gscholar&cbl=2026366&diss=y

3.3.4 Airway Infrastructure

The most important factor in the use of road transportation is that it is much faster and more
reliable than other modes of transportation by eliminating geographical effects in delivering the
product to the customer. Despite this advantage, due to high transportation costs, it is mostly
used for products that are small in volume, expensive in price or perishable.

3.3.4.1 Historical Development of Airway Transportation in Türkiye

Civilizations have developed many vehicles to get from one place to another since ancient
times, and with this increasing diversity, they have acquired modes of transport that can provide
transportation on any surface. The airplane, which is the fastest and most agile of these
developing modes of transportation, was invented by the Wright brothers on December 17, 1903,
and thus mankind has stepped into a new era in terms of transportation. The airplanes, which
were initially capable of short flights, were later developed and were able to fly at long ranges.
However, since the invention of the airplane took place during World War I, it was initially used
more as a weapon. Later, with the end of the war, it started to be used in the field of
transportation and transportation.
In our country, the development of airline transportation was initially realized mostly
through state investments, and its development was also ensured under state supervision. Later,
due to the state's need for companies governed by private law, Turkish Airlines was granted the
right to establish a joint stock company. Thanks to this law, BOAC, one of the most important
airline companies in the UK, became a shareholder in Turkish Airlines, which not only provided
capital for the establishment of the fleet but also started to see the effects of the aviation culture
in the UK in our country. Later on, Turkey received a share from the Marshall Plan, which was
established by the US to develop European countries after World War II, and contributed to the
development of the airline transportation sector. Later on, the US provided Turkey with another
$1,061,000 fund, which was used to purchase airplane parts and equipment and to develop
aviation in a technical sense. Subsequently, the USA continued to provide assistance
intermittently from 1960 to 1990, thus accelerating the development of our country's aviation
sector. By the early 1980s, liberalization of the domestic market was targeted and many airlines
were established and started to operate.

3.3.4.2 Some Airline Companies with Long-Term Operations in Turkey

YALÇINKAYA, Akansel, The History of the Turkish Airline Transportation Sector

Development and State Interventions (1933-2006), CTAD, Year 15, Issue 29 (Spring 2019),
s. 405-442.

Airway Transportation -https://ctad.hacettepe.edu.tr/15_29/15-yalcinkaya.pdf

3.3.5.1 Pipeline Transportation

Taking into account the disadvantage of installation costs, pipeline transportation is the safest
and most uninterrupted way of transporting raw materials used to meet energy needs. It is also of
great environmental and social importance as it does not cause traffic problems and can be
transported without the need for other modes. Turkey is neighboring 64.4% of total oil reserves
and 73.2% of total natural gas reserves. The distribution of oil among these raw materials is as
follows: 48% in the Middle East, 9% in Europe and Eurasia and 7.7% in Africa. The distribution
of natural gas reserves is as follows: 43.2% in the Middle East and 30% in Europe and Eurasia.
Apart from military pipelines in Turkey, the length of pipelines used for gas and oil
transportation is 15.5 thousand km. Of these, 3,332 km are used for oil transportation, while
12168 km are used for natural gas transportation. In percentage terms, 13% of the pipelines are
used to transport oil and 87% to transport natural gas. ----------TARİHSEL GELİŞİMİ
EKLENECEK---------

Hulusi AYDEMİR, PIPELINE TRANSPORT OF TURKEY: GENERAL SITUATION,

INTERNATIONAL COMPARISON AND OBJECTIVES WITH RECOMMENDATIONS FOR
POLICY, Cilt/Vol 18, No/Number:3, Sayı/Issue:54, Sayfa/Page:399-408, EYLÜL 2016 / Sep 2016

https://dergipark.org.tr/en/download/article-file/587983
https://ulk.ist/media/kitap/IV-UKODTLK/enerji-lojistiginde-boru-hatti-tasimaciligi-turkiye-icin-
bir-degerlendirme.pdf

3.3.5.2 Major Pipeline Infrastructure Projects in Turkey

 Blue Stream Gas Pipeline

 Baku-Tbilisi-Erzurum Natural Gas Pipeline
 Russia - Turkey West Natural Gas Pipeline
 Eastern Anatolia Natural Gas Main Transmission Line
 Turkey-Greece Natural Gas Interconnection (ITG)
 Trans-Anatolian Natural Gas Pipeline (TANAP)
  Turk Stream Gas Pipeline Project
 Baku – Tbilisi - Ceyhan Oil Pipeline
 Turkey Iraq Oil Pipeline

Prof. Dr. Fehim BAKIRCI, Arş. Gör. Ebubekir KARABACAK, Cihat SARIGÜL, PIPELINE
TRANSPORTATION IN ENERGY LOGISTICS:AN ASSESSMENT FOR TURKEY, IV.
INTERNATIONAL CAUCASUS-CENTRAL ASIA FOREIGN TRADE AND LOGISTICS CONGRESS
September, 7-8, Didim/AYDIN

4. Trade in Türkiye
Trade includes all sales and logistical activities involving unfinished, semi-finished, and
finished goods from nations to consumers in new markets, as well as from these markets to fill
the demand for unmet raw material needs in production. Turkey can take use of the raw material
supply in Asia, extend its production line, and access the wide range of customers in Europe. It
can also distribute the raw materials it produces and processes to Europe as finished goods.
Turkey serves as a geographical bridge between Asia and Europe. Turkey is currently classified
as a developing nation and is also dealing with severe inflation.

4.1 Inflation Rate in Türkiye and EU Releation

The constant growth in all goods and services within a nation is known as inflation. For
instance, there must be a continuous increase in prices for all goods and services in order to
establish an inflation rate of 1% every month. However, we need to consider the prices of all
goods and services entering the country, not just the prices of specific products in specific
markets, in order to label price increases inflation.
The public and commercial organizations find it difficult to maintain their operations as a result of these
price rises, which disrupts production and consumption and, in turn, economic growth and volume. The
inflation rate is increasing due to a variety of variables. Some of reasons include a lack of investment
because people don't trust the government, the currency depreciating, relying on other nations for
production and consumption, political issues, etc.
There are two significant issues that jump out when we assess these issues in the context of the
relationship between Turkey and the UN. One of them is that Turkey's inability to meet EU standards as a
result of its economic situation causes a breakdown in trade relations with the EU, and the other is that
Turkey's social, economic, and political systems will differ from those of the EU due to differences in
opinion.

Türkiye Cumhuriyeti Merkez Bankası, Enflasyon, 2004

https://www.tcmb.gov.tr/wps/wcm/connect/b62e1fb7-ebc1-4922-99dc-b3ba23320b9f/enflasyon.pdf?
MOD=AJPERES&CACHEID=ROO

4.1.1 Sociopolitical Cause and Effects

The idea of social policy, which originated on the level of the nation-state and encompasses
various social issues, has been a major point of dispute and conflict amongst political groups.
The processes of globalization and European integration both maintain this aspect of social
policy. The idea of social policy, which originated on the level of the nation-state and
encompasses various social issues, has been a major point of dispute and conflict amongst
political groups. The processes of globalization and European integration both maintain this
aspect of social policy.
Many social policy-related issues in the European Union are still handled at the state level, and
social and economic advancements result in more Union regulations in this area. In this regard,
social policy is a particularly active field of EU law that is growing as a result of directives and
regulations.
The Treaty of Rome, which addresses problems including worker mobility, settlement rights,
migrant workers' social protection, the process of economic integration, and most notably the
operation of the common market. A European Social Fund was formed at the same time that
special attention was made to equal pay for equal work for men and women. Qualified majority
voting, however, made it simpler to make judgments in this area. and sparked significant
developments. --- TARAFLAR ARASINDAKİ SOSYAL ANLAŞMAZLIĞIN TİCARETE
YANSIMASI EKLENECEK ---

https://www.acarindex.com/dosyalar/makale/acarindex-1423938562.pdf

4.1.2 Economic Cause and Effets

Turkey has been constructing strong economic institutions with a solid infrastructure and the
capacity to resist crises for almost three decades, both through development and reform measures
to join the European Union. Along with these initiatives, attention has been drawn to structural
modifications in the capital markets, and new regulations have been introduced to set the
necessary benchmarks. Turkey and the European Union have had consistent, close
communication in the area of economic relations, and Turkey has actively monitored economic
activities within the Union. Activities related to the Customs Union began very early in the
European Union. Within the European Union, the Customs Cooperation Council was established,
and the number of Customs Union members grew over time. As a result, the European
Community unilaterally eliminated quotas for most items and reduced customs taxes to zero on
industrial commodities and processed agricultural products imported from Turkey. Thus, the
European Community unilaterally gave Turkey a significant opportunity to expand its exports
and thus speed up economic growth by opening the market to Turkish exporters. However, over
the course of the following 22 years, Turkey was required by the Additional Protocol Agreement
(1973) to gradually remove customs duties and quotas on industrial goods and processed
agricultural products imported from the European Community. The Additional Protocol was
without a doubt a time-consuming, challenging, and demanding process. When it came to
carrying out its commitments under the Additional Protocol Agreement with the European
Community, Turkey had significant challenges. The fundamental cause of this was Turkey's
various periods of economic, political, social, military, military, and cultural difficulties. In
particular, because of poor and incorrect economic policies, the nation's economy has been
progressively heading towards a crisis. Despite all the bad press, although with ups and downs,
relations between Turkey and the EU have persisted.

The European Union's shared standards strategy is implemented in Turkey's industrial sector.
The common standards policy has been the subject of harmonization studies, and annual revision
studies are conducted to ensure that technical hurdles do not exist for Turkish industrial products
in the EU Single Market. According to the common standards policy, certified and specialized
institutions determine industrial product standards and conduct testing and certification
procedures (conformity evaluation and marking).
Within the framework of the EU's common standards policy, the necessary laws and regulations
were passed in this situation, and the Turkish Accreditation Agency was established. The
regulation on CE conformity marking is one of the rules on the harmonization of technical
legislation. A product having the CE designation can move freely and unhindered within the
European Union, as is well knowledge. It is obvious that the economic consequences of the
Customs Union have had a significant impact on Turkey's relations with the European Union and
that elements that affect and are influenced by one another have been at play. The Customs
Union's main static effects have primarily taken the shape of trade-diversionary and -creating
effects, and this process has been quick and expanding at the same time.

Nur DİLBAZ ALACAHAN & Yağmur AKARSU, Çanakkale Onsekiz Mart University Gökçeada Vocational
School Foreign Trade Department, THE COMMON FOREIGN TRADE POLICY OF THE EUROPEAN
UNION EFFECTS ON THE TURKISH ECONOMY

https://heinonline.org/HOL/LandingPage?handle=hein.journals/
jcmks47&div=146&id=&page=

4.2 Türkiye GDP and EU Releation

As in all other areas, Turkey's economic structure is dynamic. Due to its imports and exports,
Turkey's daily, weekly, monthly, and yearly financial activities are quite active. Money markets
and competition laws, which the European Union had previously criticized and which Turkey
had failed to persuade the European Union of, are now operated under a more restrained system
that is recognized throughout the world, but especially in the European Union, as a result of the
Copenhagen criteria and negotiations of 1993. To promote more stable operation of the money
markets, efforts have been made to ensure the independence of the Central Bank in money
markets and the creation of the Banking Supervision and Regulation Board. In the area of
industrial activity, SMEs were given particular consideration. Investments were encouraged,
especially in the industrial sector. Again, following the Customs Union, industrial activities have
seen an increase in Turkey's adherence to the "single market" system, which is significant in the
EU and used in industry developments. With increasing export numbers in a cutthroat market,
the growth of the Turkish industry has drawn attention throughout time. In instance, the Turkish
economy experienced exceptional growth rates during 1996 and 1997, reaching 8.1%. This
growth rate was attained in the first year, and the Customs Union's advantages were immediately
apparent. Turkish businesses, which have evolved and grown over time, are now in a quality and
efficiency race with multinational corporations, particularly in the food and textile industries,
where they have both subsidiary and main branches, as well as in the iron and steel and
automotive industries, where they have subsidiary branches. It has become feasible to identify
the products of these enterprises as export products, particularly in the markets of Africa, the
Caucasus, the Middle East, and European nations. Despite Turkey's lack of membership in the
EU, export numbers have been rising steadily.

Turkey's exports in 2014 were dominated by the automotive industry, which brought in over 22
billion dollars. Chemicals came in second with 18 billion dollars, followed by ready-to-wear
garments and apparel with 19 billion dollars.In 2014, we exported goods worth more than $157.6
billion. In 2014, our exports to the EU climbed by 11.7%. The extent of the European Union's
influence over the Turkish economy was another development in 2014. The Middle East
countries, with 19.3%, are the second country group to whom we export the most, according to
Nihat Zeybekçi, Minister of Economy, in his remarks at the "2014 Export and Economy
Evaluation and Expanded Presidents' Board Meeting." Again, "The top 5 export destinations in
2014 were Germany, Iraq, England, Italy, and France, in that order. Exports went up 11.3% to
Germany, 12.6% to the UK, 7.4% to Italy, and 1.3% to France. According to TIM's report, it is
noteworthy that four of the five countries with the highest exports are European Union countries"
(TIM, January 1, 2015, Report).
Table 1 shows the total exports of Turkey, which rose from 23,224,465 to 157,642,154 USD
between 1996 and 2014. In other words, there was a 579% gain. In 2014, Turkey's exports to the
European Union made up 43.5% of all its other exports. As can be seen, Turkey exports a
significant amount of goods to the EU.
According to Table 2, imports from the European Union exceeded 28 billion dollars in 2000, up
from more than 24 billion dollars in 1996. By the end of 2002, it had decreased to $25 billion. In
the period from 2002 to 2014, import values have been steadily increasing. Over 88 billion
dollars worth of imports were made into the European Union between 1996 and 2014, a 265%
increase.

4.2.1 Effects of the Customs Union

4.2.1.1.1 Static Effects
The customs union has different effects on the economy of the member countries in every area
when we think of economic concepts as the cogs of a wheel. The trade-creating and trade-
diversionary effects of a customs union are two important static effects. The trade-creating effect
raises the nation's income, while the trade-distorting effect has a detrimental effect on that
income.
 When we consider economic ideas as the cogs of a wheel, the customs union has varying effects
on the economies of the member nations in every sector. A customs union's trade-creating and
trade-diversionary effects are two significant static effects. The country's income rises as a result
of the trade-creating effect, but the income is negatively impacted by the trade-distorting effect.
The welfare and consumption of a nation grow when its income rises, while these two factors
drop when its income falls. This emphasizes the significance of the customs union's static
impacts, which include its trade-creating and trade-diversionary effects.
Similar in some ways to trade-creating or trade-distorting impacts, positive or negative
production effects refer to changes in the availability of the raw materials and semi-finished
goods required for production. Customs fees between members are either eliminated or
substantially lowered with a customs union. For instance, a country A that imports a good X with
a unit price of 100 units from the union's members at a price of 120 units with a 20% customs
duty won't have to pay the customs duty because it is a member of the union and can instead buy
the good X for 100 units, which will help the economy's production. If we use the opposite
scenario as an illustration once more, a country With the introduction of the single customs tariff
with the union's membership, a company importing good X at a cost of 200 units from a nation
outside the union will have access to good X at a higher price. If country A cannot obtain good X
from inside the union and the union levies a 20% customs charge on other nations, then good X
will need to be imported at a cost of 240 units, which will have a negative effect on production.

4.2.1.2 Dynamic Effects

Customs unions produce long-lasting, ongoing impacts in addition to static effects. Customs
unions' "Dynamic Effects" are these persistent, long-term effects. In other words, GDP is
affected by long-term economic developments brought on by the expanding market following the
economic union.
Businesses that expand into larger markets through the Customs Union initially find it
challenging to compete in these markets, but over time, thanks to their technological
infrastructure, the size of their capital, and their capacity to use their resources effectively, they
lower the cost of the goods and services they produce and thereby become more competitive.
Positive welfare level effects are indirectly caused by enterprises being more competitive and by
the costs of the goods and services they provide falling. Businesses that served a narrower
market prior to unionization now serve a larger market. The market is expanding as a result of
the manufacturers of economic value, which also makes it easier for the products to reach
consumers. Economic value creators are more certain that they can readily sell the new things
they generate as the market grows. As a result, they progress technology by expanding their
R&D spending and updating their technological foundation to manufacture new commodities.
The technological architecture of businesses are modified to meet modern demands, which
boosts their productivity, profitability, and competitiveness.

The industry grows as a result of the influence of external economies, and sectors that supply
raw materials and intermediate goods grow concurrently. Other advantages provided by external
economies include the adoption of cutting-edge methods, the accessibility of affordable, high-
quality inputs, skilled labor, and the completion of logistics infrastructure facilities like energy,
roads, and communication. Negative effects of the external economies impact include
environmental degradation brought on by industrial expansion, resource depletion due to
excessive demand for raw materials, inefficient resource utilization, and inadequate
infrastructure.

The ability of the customs union member countries to draw capital and investment from other
union members, especially non-customs union countries, is another crucial problem in terms of
dynamic consequences. Once a nation joins the union, it gains benefits in a variety of areas.
Third parties, or nations outside the union, who wish to indirectly profit from these benefits,
direct their capital and investments to the member nations in order to take advantage of the
benefits the union brings. The economies of the member country or countries benefit from this.

Doç. Dr. Mesut DOĞAN, ECONOMIC RELATIONS BETWEEN THE EUROPEAN UNION AND
TURKEY, MARMARA GEOGRAPHY JOURNAL ISSUE: 32, JULY - 2015, PP.306-325 ISTANBUL -
ISSN:1303-2429 E-ISSN 2147-7825

https://dergipark.org.tr/en/download/article-file/1359119
https://dergipark.org.tr/en/download/article-file/82282

4.2.2 Türkiye En Çok Hangi Ülke ile Ticaret Yapıyor

https://data.tuik.gov.tr/Bulten/Index?p=Dis-Ticaret-Istatistikleri-Ocak-2022-45536
4.3 What Türkiye Imports and Exports?

https://www.tgdf.org.tr/wp-content/uploads/2022/05/TGDF-2021-Dis-Ticaret-Raporu.pdf

4.3.1 Commodities
4.3.2 Semi-Finished Goods
 4.3.3 Finished Goods
4.3.4 Services
4.3.5 What Türkiye Imports Depending on Transportation Modes
4.3.6 What Türkiye Exports Depending on Transportation Modes
4.4 The Actual Problem Areas in Turkey-EU Customs Union
https://dergipark.org.tr/tr/download/article-file/269341
4.5 Türkiye Trade Volume

TR-EU Trade - http://homes.ieu.edu.tr/~aburgin/IREU%20308%20Turkey-EU%20Relations/

%C3%9Clgen%20and%20Zahariadis%202004%20Future%20of%20EU%20Turkey%20Trade
%20relations.pdf

Kitap: Yazar SOYADI (Büyük harf, kalın), Adı (İlk harfi büyük, kalın), Eser adı (İtalik), Basım
sayısı, Yayınevi, Yayın yeri, Yayın yılı. (normal)

SOURCE

Strategic overview of Turkey-

http://sam.gov.tr/pdf/perceptions/Volume-III/june-august-1998/NezihiCakar.pdf
EU MEMBERS - https://european-union.europa.eu/principles-countries-history/country-profiles_en?
page=0
Turkey Geographical Importance-
http://sam.gov.tr/pdf/perceptions/Volume-III/june-august-1998/NezihiCakar.pdf
Turkey Trade Volume - https://data.tuik.gov.tr/Bulten/Index?p=Foreign-Trade-Statistics-January-2022-
45536 HYPERLINK "https://data.tuik.gov.tr/Bulten/Index?p=Foreign-Trade-Statistics-January-2022-
45536&dil=2"& HYPERLINK "https://data.tuik.gov.tr/Bulten/Index?p=Foreign-Trade-Statistics-January-
2022-45536&dil=2"dil=2
Turkey Commodity Imports and exports - https://commodity.com/data/turkey/
Which goods Turkey imports and exports -https://oec.world/en/profile/country/tur#:~:text=In
%20December%202022%20the%20top,(%242.07B).
What is European Union - https://en.wikipedia.org/wiki/European_Union
European Union Aims and Values - https://european-union.europa.eu/principles-countries-
history/principles-and-values/aims-and-values_en
Eu Ex Im Volume - https://tradingeconomics.com/european-union/exports-by-country
Eu Raw Materials - https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Extra-
EU_trade_in_raw_materials#General_view_on_EU_trade_in_raw_materials
Eu Enterprises - https://ec.europa.eu/eurostat/statistics-explained/index.php?
title=International_trade_in_goods_by_economic_sector#Declining_share_of_number_of_enterprises_in
_both_.27industry.27_and_.27wholesale_and_retail_trade.27
EU Product Type - https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Intra-
EU_trade_in_goods_-_main_features#Intra-EU_trade_in_goods_by_main_product_groups
Value of international trade in goods and services- https://ec.europa.eu/eurostat/statistics-explained/index.php?
title=World_trade_in_goods_and_services_-_an_overview

EU Products - https://ec.europa.eu/eurostat/statistics-explained/index.php?
title=International_trade_in_goods_by_type_of_good#International_trade_in_goods_-
_developments_by_broad_economic_category

Firm samples –
Bulung Logistics : If the container goes around France, firm uses Yalova Port to France Sete Port route to
deliver goods as fishy back transportation combination but if it is far from France, goods go with just
highway mode. This depends on the number of dozvola, the amount of fuel consumption, the availability
of the drivers, the constraints of foreign states and the distance.
Mars Logistics:
Flash Logistics:
Türkiye Lojistik Coğrafyası : https://prezi.com/iv9qgxf-0lr8/turkiye-lojistik-cografyasi/
Turkiye – EU trade relationship
Türkiye altyapı moller - https://dergipark.org.tr/tr/download/article-file/451535