Diversification of the supply chain after the pandemic and the creation of new regional lines are on the agenda. Northern European countries are considering taking steps in the medium and long term to reduce the Far East dependency in production and supply.
In the seventh leg of the webinar series, "The course of the coronavirus in our target markets" organized by the Aegean Exporters' Associations, Brussels Trade Chief Advisor İsmail Gencay Oğuz and Copenhagen Trade Advisor Çağrı Alpgiray Kale made a presentation about the developments in the foreign trade of Belgium and Denmark after the pandemic and answered the questions of the exporters.
Jak Eskinazi, the head of the Aegean Exporters' Associations Coordinator, said that the exports, which declined in March, April and May due to restrictions, started to recover with gradual normalization steps and that they concentrated on Europe.
"Turkey, the European Union, in the first quarter of 20 was between G2020 and OECD countries showing the strongest growth performance. The re-opening of customs gates to international freight transportation in a controlled manner and the ending of travel restrictions will put our exports back on the attack. The coronavirus export process contactless, virtual fairs, Turkey's major manufacturing power in the world with both its geographical location and market successfully manages to leap like a virtual trade mission is being expressed would be an alternative. This mainly EU countries, including a very strong message in favor of increasing the bilateral trade and investment relations with Turkey in the international arena. In the coming period, Turkey's global supply chain positioning itself can be a very powerful way, we think the new normal will bring positive reflection on the global positions. We will rapidly implement our plans for neighboring countries, the hinterland we export and our target markets. Lately it happened and showed the changing world order of which is Turkey's largest trading partner in the 24 years of the Customs Union with the EU, updating and broadening the scope inevitable. We realize 50 percent of our exports to European Union countries. We would like to continue exporting without paying customs duties with many more countries, especially the Northern Europe region. Free Trade Agreements are of great importance for Turkey. "
Assessing exports to Belgium and Denmark, Eskinazi said, “We have a trade volume of about 7 billion dollars with Belgium. We also export $ 3,5 billion. Automotive, zinc, jewelery, textile, ready-to-wear are the most exported sectors. Turkey has 5 percent decline in the first 11 months of data according to the general. Our exports are around 1,3 billion dollars in January-May period. As EİB, we have a 10 percent share. The export of chemical products, ready-to-wear food products is among the most common. We have an export of 1 billion dollars with Denmark. Our imports are between 800-850 million dollars. Vehicles, electrical devices, machinery, ready-to-wear products come to the fore in our exports. During the pandemic, our exports to Denmark decreased by 16 percent. In the first 5 months of the year, we had an export of 330 million dollars. EIB members make 9 percent of this export. Most of our members have exports in ready-to-wear food products, air conditioners, ventilation sector. ” said.
Recommendations for the Belgian market are as follows;
- It has been decided to remove the measures in three stages as of May 4. As of May 11, shops opened. As of June 8, restaurants and cafes have been opened. Festivals and collective events are prohibited until August 31.
- As of 15 June, the European Union and Britain lifted a ban on 4 Schengen countries. There are up to 250 thousand Turkish populations in Belgium. Victims mutual flights from Turkey to Belgium was launched in Turkey not to be but there's citizenship and residence permit requirement.
- 125 billion euro economic measure package was announced. Gross domestic product contracted by 2,4 percent in the first quarter. The main effect is expected to be seen in the second quarter. There is a 24 percent drop in industrial production. There is a 39 percent decrease in construction production. Unemployment rates rose to 5,6 percent. Decline in inflation continues.
- Exports decreased by 24 percent and imports dropped by 28,8 percent. There is a 17-point decline in retail trade volume linked to consumer confidence. The largest ever figure in business confidence was seen, a 25 point decline. There is a 30 percent increase in e-commerce in March, 50 percent in April.
Belgium is one of Europe's most open economies, with a national income of 473 billion euros, a competitive country. The service sector accounts for 75 percent of GDP. The share of the manufacturing industry in the total economy remains at 21 percent, while maintaining its added value and weight in exports. The strong sectors of the Belgian industry are chemistry, pharmacy, food and beverage. Metals and metal products make up 60 percent of the added value of the manufacturing industry.
- According to the forecasts of 2020 and later, a contraction of -6 percent -11 percent is expected. One of the common thoughts is that the recovery in 2021 will not be at the end of 2019. OECD's report confirms this. Belgium does not seem to reach the value of growth in the last quarter of 2019 until the end of 2021 even if there is no second wave. Depending on the developments in those countries, Germany France Netherlands main trade partners are expected to decrease 2020% in exports and 11,9% in imports in 11,5.
Belgium is highly dependent on foreign trade. Exports of goods and services constitute an important part of GDP. It has a trade volume of 2019 billion euros in 800. It gave foreign trade surplus of 16,7 billion euro. It has 397,7 billion euro exports and 381 billion euro imports. It is also a transit trade and distribution center for other EU countries.
- Motor land vehicles, pharmaceutical products, mineral fuels, machinery, organic chemicals make up 47 percent of total exports and 51 percent of imports. There are products such as medicines, passenger cars, immune products, vaccines, petroleum oils, diamonds, auto parts and parts, medical tools and devices, steel, sports shoes and tractors in its export.
- Crude oil imports are important. Foreign trade concentrated on EU member countries. Neighboring countries, Germany, France and the Netherlands make up 40 percent of the total trade. foreign trade of Turkey and Belgium in recent years have given more than $ 100 million. Motor vehicles account for 30 percent of exports. Secondly, zinc, ore and concentrates are among the products we export too much. Yarns, petroleum oils, knitwear, plastics and steel are other top 10 products.
- US steel imports, Belgium is one of the most important country for Turkey in the supply of scrap. Thanks to its sophistication in recycling and collecting Europe's scrap, our biggest import item is scrap steel. Unprocessed gold imports differ. Products used in the production of synthetic fibers, cleaning preparations, vaccines and serums, petroleum oils, medicines and other products.
- Our exports increased in the first two months. In April, there was a decline close to 50 percent. Imports of motor vehicles, flat steel (hot rolling), petroleum oils, auto parts and parts, yarn, knitted clothing decreased, while imports of PTA, weaving machines, flat steel (cold rolling) tractors and chemical fertilizers increased.
- There is an increase in the investment of intermediate and investment goods. Along with the recovery in industry in Turkey in 2020 with growth seen this item. The decline in May fell to 16 percent. As the month of June coincides with the holiday, there is a momentum, but there is an acceleration.
- Belgium The Belgian economy firms dominate the culture of doing business in Turkey, and they follow. $ 2002 billion of direct investment in Turkey between the years 2019-8,7. There are 680 Belgian companies that have investments in our country.
- The Turkish population in Belgium is close to 250 thousand. Our companies wishing to export from Turkey to Belgium, including Belgium built primarily Turkish citizens are targeting. They need to target the European market in the medium and long term.
- There is a significant trade volume between the Turkish populations between the Netherlands and Belgium in Germany. An important customs gate of the EU is the Port of Antwerp. An important point in both intra-EU transit trade and EU trade with third countries. It is the second largest port in Europe. Considering not only the Belgian market, but also the European market, and evaluating it within the scope of Europe's trade with third countries, it is useful to look at its potential in this respect.
Cooperation areas; chemistry, pharmaceutical industry, information technologies, contracting projects with third countries. Diversification of the supply chain after the pandemic is on the agenda of creating new regional lines. Steps can be taken in the medium and long term to reduce the dependence on Far East in production and supply. Turkey integrated structure of the EU economy and trade, poses potential production capabilities.
Belgians are more online than ever. There is a significant increase in e-commerce. This situation will reflect on the future. While small and less important products were preferred before. Home garden products, higher amount products started to be purchased.
Recommendations for the Danish market are as follows;
- GYSİH is around 350 billion dollars. Its exports of approximately 110 billion dollars are imports of 100 billion dollars. The country's economy contracted by 2,1 percent during the pandemic period. Denmark was less affected when compared to other European countries. Export products did not shrink as they were products such as pharmaceuticals. Flights started, but tourist visits are prohibited until 31 August. It is possible to go for a job interview provided that you document it.
- 12 billion euro cash aid and economic support including tax deferral, credit expansion, etc. over 40 billion euro were offered. It is thought that 50 thousand people lost their jobs.
- There was an increase in shopping for home renovations and household goods. The most affected sectors are clothing, shoes, bags, jewelry. There is vitality now recovering. Spending on cosmetics and furniture also increased. Apart from transportation, entertainment and tourism, there is a normalization trend in the services sector. Tourism expense was $ 2019 billion in 7. The share of 5 percent in Turkey.
- According to the IMF estimate, the country's economy is expected to contract by -2020 percent in 6,5 and -5 percent according to the Danish Ministry of Finance. An expansion of 2021 percent is expected in 6. Even if this happens, it will be back to its 2018 situation. This year, the budget is expected to give a deficit of around 7 percent. This will be the highest budget deficit after 1983.
- Pharmaceuticals, machinery and accessories, electrical machinery and equipment, mineral fuels, optical devices, meats and offal, land vehicles and accessories, furniture, fish and crustaceans, dairy products.
- Its imports consist of machinery and accessories, electrical machinery and equipment, land vehicles and accessories, mineral fuels, pharmaceutical products, plastics and products, optical devices, iron and steel articles, unwrapped clothing and accessories, furniture.
- Top 5 countries in exports and imports close to their geography are Germany, Sweden, Norway, England, Netherlands. The country excluding only its own hinterland ranks fourth in Chinese imports.
Turkey and Denmark have a balanced trade. We are exporting 1 billion dollars and importing 800 billion dollars.
- There was an increase in our imports on ship. It has become normal this year. There is a 4 percent decrease in imports for the first 30 months. There is also a decrease of 6 percent in exports. Products that we are strong in exports, clothing and land transportation make up 60 percent of exports.
- There is a decrease in clothing in the first 4 months. As in Belgium, scraps and pharmacy stand out in our imports. Energy is in third place.
- Weaknesses are low population growth rate is slow, not a dynamic market, high domestic taxes are not heavy practice as in other Scandinavian countries.
- There are over 100 Turks resident and Danish citizens. Considering the people whose consumption habits are similar to the Turks, it has a potential of 200 thousand, which is close to 5 percent of the population. The increase in demand in the second half of 2020 can be seen as an opportunity.
- If they did business to reference countries for Denmark, it could be impressive on the Danish client. Design matters. Scandinavian geography has a unique design culture, the apparel industry knows it very well. Natural products, ecological, environmentally friendly products, colorless odorless soaps, ecological foods, packages dissolved in nature affect the end consumer. They attach importance to small details; paint, package, etc. of the product ..
- Being physically located in the nearby geography, ease of transportation, face to face contact, building warehouses are important in terms of building trust.
- There are two big supermarkets dominating over 90 percent of the market. The product range of the markets is very wide. Everything from sports to cosmetics is sold. There are also e-commerce sites. They have many markets within their body and they have market chains for every economic group. In 2019, the two groups had a turnover of $ 15 billion. If there is access to these markets, it will be useful in terms of launch.
- There is a potential market for natural stone used in home furniture for the natural stone industry. If the design is expected, marble decorated products are sold.
- Since the number of cases was normal at Denmark, no mask was used. Therefore, there was no demand for medical supplies.
- There have been fraud activities in Denmark for the past few years. There are fraudsters who imitate the companies. It will be healthy for the firms that make import to contact the Trade Counselors.
- E-commerce volume is projected to approach 2019 billion euros in 20 and 25 billion euros this year. 37 percent are normal products, 60 percent are services, and 3 percent are internet series, movies and music platforms. The prominent products in online sales are electronics, ready-made clothing, footwear, sports equipment, white goods, building materials, cosmetic products and jewelry, home accessories, health and hygiene products, furniture, games and toys.
- Online sales to Denmark from European Union countries are exempt from VAT with customs tax, but VAT on sales of over 80 Danish Kroner from outside the EU; For sales over 1, 50 DKK, customs tax is collected with VAT. In Denmark, VAT is charged at 25 percent.
Hibya News Agency