Investigation of tobacco foreign trade with gravity model: The case of Turkey, China and USA

Within the scope of the study, the commercial value and economic added value created by the cultivation of tobacco plant, which is a commercial agricultural product, were examined for Turkey. While Turkey was the world's 5th largest producer in 1980, its share in tobacco production was 4%. In 2000, this rate decreased to 3% and its place among countries to 6th. In 2020, its rank among tobacco producers in the world decreased to 14th with a share of 1.4%. In the mentioned period, while China is the largest tobacco producer in the world, the USA is in the sixth place according to 2020 data. It was primarily intended to determine the socioeconomic, political and social variables that affected this declination in tobacco cultivation in Turkey within the scope of the study. By determining the effects and changes, it was aimed to express the opinions that are thought to increase Turkey's tobacco export income. In this direction, the export income of China, the USA and Turkey, which have an important place in the tobacco market, obtained from their trade partners and the factors affecting this income were analysed. Gravity model was used in the estimation of the trade income of the countries, and the secondary data of the study were obtained from official secondary data sources, especially FAO. In the study, Turkey's export income between 1990-2018 was analysed according to 28 years and 9 importing countries. The data set included 6 countries between 1987-2018 for China and 10 countries between 1988-2018 for the USA. Within the scope of the study, the factors that are considered to affect the tobacco export income were determined and analysed within the economic, political and global effects. According to the results of the study, the increase in the amount of exported tobacco positively affects the export income of Turkey and the USA. While the increases in the population of other countries affect Turkey's export income negatively, the distance variable gives results that increase the export income for three countries. While the depreciation experienced by Turkey and China in their local currencies increases export revenues, it causes the opposite effect for the USA. While the increase in national incomes of the trading partner countries decreases Turkey's export income, it is concluded that as the per capita income in the USA increases, the export amount and therefore the export revenue decreases. Considering the impact of policy changes, the effect of the Alternative Product Support implemented in 2002 and the Tobacco Trade Authorization Certificate implemented in 2010 in Turkey determined as positive independent from importing countries. After 2010, when both practices were implemented together, the realization rate of independent tobacco trade increased by 3%. It is understood from this that alternative product support, which is expected to have a negative effect, has also positively affected export revenues thanks to the increase in registration. This policy change has been associated with the signing of the World Health Organization Framework Convention on Tobacco Control for the USA. As in the case of Turkey, it has been observed that the signing of the contract has a positive effect on tobacco export revenue. However, the statistical effect here is negligible. As it can be understood from these political effects, it is seen that even if tobacco consumption decreases, tobacco demand does not decrease due to the markets of developing countries. Here, the necessity of sustaining the sector with its added value and employment dimensions, especially for Turkey, comes to the fore. It is envisaged that studies on controlled production and marketing and the development of alternative uses of tobacco leaves and tobacco are required.