34

**Table 20:** _Direction of trade in ‘producer-driven’ networks in 1995, 2000 and 2004 (in percent)_

||**EU-25**|||**Other P**|**an-Euro**|**pean**|**ROW**|||
|---|---|---|---|---|---|---|---|---|---|
||1995|2000|2004|1995|2000|2004|1995|2000|2004|
|**Automobile network**||||||||||
|Network exports|57.8|63.8|72.8|3.2|2.4|4.0|39.1|33.7|23.2|
|Exports of parts|63.6|65.2|65.1|2.0|1.0|1.8|34.5|33.8|33.1|
|Network imports|75.5|80.0|81.3|0.9|0.5|0.6|23.6|19.6|18.1|
|Imports ofparts|79.6|70.6|79.7|1.2|0.8|0.6|19.2|28.6|19.7|
|**ICT network**||||||||||
|Network exports|78.0|81.3|87.2|5.4|1.9|4.4|16.6|16.8|8.4|
|Exports of parts|36.1|28.7|49.1|16.4|0.8|2.8|47.5|70.5|48.1|
|Network imports|56.9|68.5|48.0|0.8|0.3|0.2|42.3|31.3|51.7|
|Imports ofparts|59.4|63.1|54.0|0.7|0.5|0.2|40.0|36.5|45.9|

Source: Computations based on Turkey reporting to UN COMTRADE Statistics.

Turkish firms entered ‘producer-driven’ networks with a big bang in 2001 and 2002. In 2001 the value of exports of automotive networks surged 64 percent. So did the value of ICT exports but a year later in 2002—it had the same increase. The surge in automotive exports raised their share in EU external imports 59 percent from 2.9 percent in 2000 to 4.6 percent in 2001. The expansion continued in 2002—2004, with the share growing to 5.5 percent in 2002 and 9 percent in 2004. The sudden explosion in ICT exports resulted in a 71 percent increase in their share in EU imports of these products from 0.7 percent in 2001 to 1.2 percent in 2002 (Table 21). The share of these two sectors in Turkey’s total EU-destined exports increased from 14 percent in 2000 to 23 percent in 2003 and 27 percent in 2004.

Although final products were behind the sudden surge of exports of both networks indicating specialization in assembly operations in the last stage of production process, there seem to be significant differences between two sectors in their modes of integration into global networks. ICT activities appear to consist mainly of assembly operations for exports. The share of parts in total ICT imports increased pointing to their growing use in assembly operations destined for exports. Another indication of specialization in the last stage of production process is the relatively low level of exports of parts and components. This suggests that there are few firms involved in supply chains of EU-based multinationals.

In contrast, firms of the automotive network appear to display much wider specialization spanning across parts, components and assembly operations of motor vehicles. But the two sectors also vary greatly in terms of size and specialization profile. The automotive sector in terms of its exports is much larger than ICT. The former accounted for 20 percent of Turkish total exports in 2004 and 9 percent of EU external imports, whereas the latter contributed respectable 7 percent but accounted only for 1.2 percent of EU imports of ICT products. The boost in exports of the automotive sector came mainly from exports of motor vehicles indicating the expansion in assembly operations. Yet, exports of parts and components doubled in terms of value rising from US$ 1,269 million (of which US$ 704 million went to the EU-25) in 2000 to US$ 2.5 billion with the EU taking US$ 1.4 billion in 2003 and US$ 2.7 billion with the EU purchasing US$ 1.8 billion in 2004 . Exports of motor vehicles more than quadrupled over the same period increasing from US$ 1.2 billion (US$ 653 million to EU) to US$ 5.3 billion (EU-25 took US$ 2.9 billion) and US$ 7 billion (the EU US$ 5.4 billion) in respective years. In consequence, the share of parts in total automotive network exports fell from 52 percent in 2000 to 32 percent in 2003 and 28 percent in 2004. During the same period, the share of parts in ITC exports was at around 2 percent. In brief, the involvement of producers of automotive parts in international supply networks exceeds significantly that of producers in the ITC sector.