The effect of the structural change in Turkish foreign trade on its terms of trade since 1980s

The foreign terms of trade have become a means of analysis getting animportance and being taken into consideration with attention in the foreign tradeanalysis and in the last years especially emphasizing the subjects of the economicdevelopment, economic construction changes etc..In the world market, the foreign terms of trade are defined as the ratio of theexport goods price index to the import goods price index. Generally speaking, we cansay that the foreign terms of trade is a concept showing whether a country isadvantageous or losing from the foreign trade because of the changes in the prices of thegoods sold and purchased by that country.As we know that the evaluation of the terms of trade being only as a price ratiocan be a missing form of analysis, it is necessary to examine the terms of trade from thestandpoint of the price, quantity, income and profitability depending on theclassification of the terms of trade in the literature.If we make an evaluation in the general meaning, as it is defined in the Singer-Prebisch thesis, the foreign terms of trade on the one side are progressing in the long runagainst the countries that are defined as their agricultural product and raw materialexporters are less-developed or under development, on the other side they areprogressing in favour of the countries of which the industrial product exporters aredeveloped. Although we can go out of the generalization made in the Singer-Prebischthesis regarding the terms of trade in some periods of the oil crisis and similardisturbances, these situations are valid for only very exceptional and spesific cases.In our thesis, we calculated the foreign terms of trade of Turkey separately fromthe standpoint of the barter (commodity) terms of trade, gross barter terms of trade andincome terms of trade, and we made analysis of and comment on the relations of theseelements with each other in the period beginning from the early 1980?s up today whichis the period transforming from the industrialization strategy depended on the importsubstitution to the export-oriented industrialization strategy.As the results of our analyses made in our thesis regarding the foreign terms oftrade of Turkey, we can summarize the findings as follows:The deterioration in the barter (commodity) terms of trade of Turkey in recentyears has been compensated by the increase both in the income terms of trade and in thesingle factoral terms of trade.The deteriorated foreign exchange parity created in recent years by the excessappreciation of the Turkish Lira, has been compensated by the income effect of theforeign trade getting a positive value and this shows an affirmative progress drawing theattention in the foreign trade of Turkey.