The analysis of intra industry trade in the agricultural sector Turkey

The primary objective of this study is to examine the structure of Turkey's foreign trade by pursuing the theory of Intra-Industry Trade (IIT) that has been taking on a growing significance. Intra-industry Trade is of a great importance in understanding the current trends in the world trade. This paper emphasizes the prominence of IIT in Turkish general and agricultural foreign trade. Turkey's intra-industry trade levels with the EU members and the other countries have been calculated by deploying 3 digit levels of SITC data and Grubel-Lloyd index. Since the ratio of IIT in Turkey's total trade is at 78% and in total agricultural foreign trade, at 80%; it is discerned that the development of its foreign trade demonstrates a predominantly IIT-driven trade structure. Hence, the ultimate conclusion of this paper is that instead of being complementary for its trading partners, Turkey is more like in the position of a rival economy against them. Turkey requires substantially higher IIT ratios to be able to become a global, competitive and more robust market player. In this way, transfer of technology and economic structural transformation will be facilitated. As economies of scope and product differentiation become comparatively important, IIT will assume even greater significance. With the gains granted by the increasing IIT, Turkey's development level and international competitiveness will rise. The study foresees that it can be important in terms of Turkey's agricultural trade structure and policy-making processes.