JackDoe wrote:boomerang wrote:jd the eu is not gonna dump turkey at anytime...the eu being a service economy needs a manufacturing hub and turkey today fills the role via the trade agreement...what will damage turkey in the long run is trade agreements with other countries...
for starters this trade agreement
http://www.europeanvoice.com/article/im ... 69176.aspx has spooked turkey a little and a i say a little because sth korea is both a manufacturing hub and a service economy...
the eu is always looking to expand her economy for the benefit of her own... there was another trade agreement, don't quote me on this but i think mexico...this also spooked the turks as the trade agreements are in such a way that the countries that sign with the eu are also covering as far as importing but it does not extend to the signed countries...this exludes any agreements for instance turkey in exporting to sth korea...
if the eu tomorrow signs a trade agreement with china and they are talking btw, the turkey investment will be gone eastwards...living turkey out in the cold...
it is to turkey's best intereset in joining the eu provided she understands it's turkey joining the eu and not the eu joining turkey...until this happens turkey wil find herself out in the cold one sunny day blaming everyone except herself...
the reason turkey became a manufacturing hub is because business invested in turkey because of the trade agreement...big business will always look for investements with greater returns...now do you think if there was a trade agreement signed tomorrow between china and the eu, business will not pull out of turkey?...you know and i know turkey not only can't compete with china but china will run circles around turkey...
so yes today the eu will keep turkey on the sidelines...but i do see a problem arising with the roc taking the eu helm next year...i see turkey accession frozen...but the turks are proud people and it's anyones guess how they will react...
This is about the best reply I've had so far, thanks boomerang.
Another question, is it up to the EU presidency to freeze the accession talks with any country or is it a joint decision of all the EU countries?
An you are right, Turkey can't compete with China but Turkey being at the border of the EU, would it not be more profitable in the long run for big businesses to stay in Turkey and save on time and money transporting all the way from China?
OTOH, it might stop the Chinese flooding the worlds markets with cheap and dangerous products, or at least reduce it.
the answer to the freezing regarding accession is totally dependable upon eu memebers, the way i see it is between states...any state can freeze certain negotiations form the aspiring country...not dependable on eu presidency...here comes the problem in case turkey vs cyprus...turkey doesn't recognise the roc as a sovereign state...in other words turkey is gonna blacklist herself when the time comes...
regarding trade, the reason turkey attracted a huge eu investment thus far is due to the trade agreement...noone can deny this...lets look at the recent example of foxconn opening a new plan in turkey for hp contract manufacturing...the only reason foxconn came to turkey is because of the trade agreement just so the shareholders back in taiwan will get a bigger dividend...foxconn is probably one of the biggest contract manufacturers in the world...even though no one has ever heard of them..
freight is totally irrelevant, as the cost per unit shipped out of china vs turkey will only come to about $10 per hp computer...but the labour in turkey is higher than china so this takes the freifght component out of it since higher salaries are paid in turkey...but when it comes to tariffs is a different ball game...
Trade agreements will open china to eu technology and this is what counts as far as the eu is concerned...the eu would like to open china and modernize their factories and believe me there are heaps to modernize...big bucks involved...so it's good for the eu to have an agreement with china...as it's stands to gain one hell of a lot...modernizing chinese factories means better quality goods for europe...a two way stream...eu and china joinly gain...
as far as cheap chinese products flooding the market, is only a misconception found at markets...in china there are 6-7 tier levels of manufacturing...lets look at apple for example...foxconn employes 500,000 people at it's various plans in china just to produce apple products...you can't say these are cheap and dangerous products...yes there cheap and nasty products coming out of china, but similar products come out of everywhere and turkey is no exemption...you would need to differentiate between products and big business...the standards are way different...I for example just signed a distibution agreement with a US company...now everything is coming out of china...so you ask yourself why would i do that when i get the same product out of china without paying the extra marging to the us company...here it is...for me to deal with 1 and 2 tier manufacturer in china ensuring top quality, yes they will deal with me, but my volume is tiny comparing to their output...so I would need lots of money which i haven't got and secondly a market to sell these goods...the US company has both so they are able to meet both requirements...and believe it or not the price differential between the 1-7 tier manufacturing companies is not that great ...we are talking cents...so in other words i was forced to go to the US...to get top notch product at a comparable price...
the 1-3 tier manufacturing companies in china compete head on with sony, samsung, lg etc...the few that come to mind are hisence and tcl...their output is higher than samsung, lg and sony when it comes to tvs and white goods...but yes no one is ever heard of them...they have a foothold in a more than a billion people market and this is only in china...these companies are slowly flexing their mussles in the international arena...keep in mind there are 6 billion people world wide...1.3 billion live in china...
as far as turkey is concerned she needs to evaluate where she wants to bethe next 10-20 years...she has a chance to join the eu and herself become a service economy like the rest of the eu countries...if she choses otherwise, i can't see a future for turkey as she will be locked out...
you see jd, economics will dictate the future of turkey...but she needs to understand she is joining the eu and not the other way around...