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**Table 17:** _Characteristics of ‘buyer-driven’ chains in terms of exports and imports in 1995, 2000 and 2004 (in percent and million of US dollars)_

|||**T&C ch**|**ain**||**Footwea**|**rchain**|<br>**F**|**urniture **|**network**||
|---|---|---|---|---|---|---|---|---|---|---|
|||1995|2000|2004|1995|2000|2004|1995|2000|2004|
|Network exports|(US$ mill)|8,650|10,223|17,662|114|114|205|75|179|611|
||shareintotal 'buyer-driven'|97.9|97.2|95.6|1.3|1.1|1.1|0.8|1.7|3.3|
|Exports of parts|(US$ mill.)|2,525|3,672|6,429|1|13|23|18|38|129|
||shareintotal 'buyer-driven'|99.2|98.6|97.7|0.1|0.4|0.3|0.7|1.0|2.0|
|Network imports|(US$ mill)|1,924|2,469|5,005|46|114|303|73|201|296|
||shareintotal 'buyer-driven'|94.2|88.7|89.3|2.2|4.1|5.4|3.6|7.2|5.3|
|Imports of parts (|US$ mill.)|1,833|2,150|4,226|12|12|16|27|59|154|
||share in total 'buyer-driven'|97.9|96.8|96.1|0.6|0.5|0.4|1.4|2.7|3.5|

Source: Computations based on UN COMTRADE Statistics.

Export growth rates of each network exceeded the growth of the EU’s external import demand for these products. As a result, producers in ‘buyer-driven’ networks have succeeded in increasing their share in EU external imports through the combination of increases of exports of both parts and final products. Suppliers of footwear had the largest increase but from a very small base. Turkish T&C chain accounting now for around 15 percent of EU imports of textiles and clothing has also seen a substantial, 25 percent increase in its share in 2000-03. The presence of furniture network in EU markets is also visible, as suppliers of furniture parts account for more than 5 percent of these EU external imports (Table 18).

It appears that Turkish firms operating in ‘buyer-driven’ chains are not merely assembly shops for EU multinationals taking advantage of cheap labor. While without the survey of firms in sectors or access to input-output tables it would be impossible to provide an unequivocal proof of this assertion, an examination of trade data tabulated in Table 18 suggests a two-way involvement going beyond simple outward processing.

In fact, trade flows, encompassing two-way movements of both parts and final products within each chain point to the development of backward linkages. Import intensities in each chain, i.e., imports of parts/inputs relative to exports of final products and parts, have been declining. This indicates increase in local content, with parts domestically produced replacing imports. It appears that domestic suppliers of the T&C network were in business in 1996, as the import content of inputs in T&C exports was already very low then. Import intensity of T&C exports has remained at a low level of around 20 percent.<sup>16</sup> The import intensity of footwear and parts is relatively low. It fell from 13 percent in 1996 to 7 percent in 2001 and then increased to 10 percent in 2004. In contrast, the import intensity of total furniture network exports fell between 1996 (50 percent) and 2003 (19 percent), but it rose to 34 percent in 2004. This ratio has been remarkably stable in the T&C chain. Its low level suggests a high value added domestically to its exports. While no firm conclusions can be drawn on the basis of such a crude measure, part of it can be attributable to more developed backward linkages in the Turkish T&C chains.

Another feature shared by all networks except footwear, but only in 2003, is that they are net exporters. Exports from T&C network were consistently around four times higher than their imports in 1996-2003 and rose to more than six times higher in 2004. Except for furniture, other sectors increased their respective positive trade balances. The ratio of exports to imports for the furniture sector fell from 250 in 2003 to 161 percent in 2004.

16 Its import intensity of 23 percent is much lower than the same ratio for Bulgaria’s TC chain of 55 percent. Although the higher level may be due to imported fabrics being used for producing more processed fabrics for exports, this probably does not explain the whole difference.