Is Turkey Turning Its Face Away From Japan to China and Korea? Evidence from Trade Relations

Abstract

The economic relations between Turkey and\rJapan have recently been on the decline. This\ris partly a reflection of the ongoing economic\rtransformation in the East Asian region,\rwhere China and Korea have caught up\rwith Japanese industries and technology in\rmost sectors. Korean and Chinese firms have\rgained competitive power over Japanese firms,\rwhich have traditionally been champions of\rmanufacturing. Partly as a consequence of\rthe ailing Japanese economy, Turkish industry\rhas recently turned to Korea and China as\rsources of industrial supplies. This paper shows\rthe extent to which the Turkish economy has\rbecome more dependent on industrial inputs\rfrom Korea and China at the expense of the\rdeclining importance of Japan. This is discussed\rin conjunction with the ongoing free trade\rnegotiations between Turkey and Japan.