The reform to be made in Customs shall make Turkey Fly

The World Bank conducted a research on the impact of logistics costs on foreign trade. Countries that control and manage their expenses in their ports, especially during crisis periods, increase their revenues. If not, it brings a heavy burden on companies that import and export with increasing costs. This makes the country lose. The prominent topics in the World Bank's Logistics Performance Index Report are as follows;

  • Fast and regular transactions, especially at ports, increase the country's competitive power.
  • The cost of a one-day delay in the transportation of a good means 1 percent contraction in the trade of that good.
  • A 10 percent reduction in export costs in a country provides an increase of 4.7 percent in the country's total exports.
  • The return of a country delivering its goods one day before rival countries provides an advantage and profitability between 0.6 percent and 2.3 percent from these transactions. Likewise, a 10 percent increase in the transportation costs of a good means a 20 percent decrease in the trade of that good.
  • The one-day delay in the delivery of goods is a 7 percent reduction in that country's time-based exports. On the other hand, the national income and foreign trade of countries with good logistics performance are growing more.
  • In addition, the share of logistics costs in the final product in developed countries is 10-15 percent on average, while in developing countries this rate is around 15-25 percent due to inefficiencies that occur due to various reasons. In another study conducted by the International Land Transport Association, it was revealed that 40 percent of the total time spent in transportation was due to the waiting at the border gates.
  • According to the Logistics Performance Index Report prepared by the World Bank, it is predicted that if the speed of customs transactions is increased by half, a worldwide growth of 33 billion dollars will occur.
  • Therefore, customs have a great importance and potential, especially in increasing logistics efficiency.
  • The impact of border crossings and customs procedures on logistics processes makes customs an important actor in the logistics chain.
  • Countries are trying to reduce logistics costs and activate the supply chain in order to increase their share of global trade.
  • Turkey also needs to reform customs in order to transform its geographical superiority into foreign currency.
  • In Turkey, the average waiting time at the borders for export transactions is 10 hours and 7 hours for imports. While the time required for the completion of document transactions in export is 4 hours, this time for import is 2 hours.
  • While the average container expenditure per truck for the transaction costs at the border in exports is 338 dollars, this figure is 46 dollars for imports. While the average expenditure for documents in exports is 55 dollars, this amount remains at 55 dollars for imports.
  • At this point, Turkey shows the worst performance with 68.1 points in terms of expenses spent on border transactions for exports.

I wanted to share this report of the World Bank with you. In 2018, Turkey ranked 47th among 160 countries in terms of performance. It ranked 43 among 190 countries in the ease of doing business index.

As of 2019, 7 million 482 thousand 588 containers were handled in a total of 20 ports in Turkey, adding the invented costs of $ 200 for each container, an additional cost of $ 1.5 billion adds to foreign trade companies. This number also differs from port to port.

We must pay attention to the authority confusion in Turkey's ports and to the voices of our companies stuck between the Ministry of Commerce and the Ministry of Transport. Therefore, the implementation of the reforms and rules to be made in the customs in order to decrease the costs and increase the foreign exchange revenues without ignoring the arbitrariness will make Turkey fly.

Yakınlaşan doğu pazarından pay almak Dünyada dengeler değişti. The capitalist USA turned to a closed economic model with decisions that made imports difficult. Communist China, on the other hand, made decisions that would surprise everyone in the economy to become more integrated with the world. The trade wars between the USA and China left their mark on 2019. In 2020, this war continues to increase. We are in a period where the concept of the Far East has disappeared, and China is referred to as the eastern market. Considering that a cargo from Beijing will arrive in London in 12 days, we have to find ways to benefit from the European-China rapprochement. In 2019, we imported 18.497 billion dollars from China, while our exports remained at 2.587 billion dollars. We must hurry to close this foreign trade deficit. For this, it is necessary to analyze the Chinese foreign trade correctly. When the customs tax rates of 8 thousand 258 goods in the tariff schedule in China are examined, we see that the average protection rate in the agricultural products of the People's Republic of China is 15.1 percent. This rate is 8.9 percent in industrial products. When we examine the customs tax rate of the first 100 products in Turkey's exports to China, it can be said that the customs tax rates are very low in raw materials and chemicals needed by the Chinese economy. Tax rates reach 30 percent in high value added products and goods and agricultural products. China has free trade agreements with many countries including Pakistan, ASEAN (Southeast Asian Nations) countries, Chile and South American countries.


The limits of the Chinese economy

Customs tax rates in China, especially on agricultural products, are significantly higher than industrial products. 10-25 percent in meat products, 10-17.5 percent in fish products. While this rate is 10-20 percent in dairy products, it is between 5-30 percent in fresh vegetables and fruits. Customs taxes are 4-25 percent on oils, 5-15 percent on processed meat and fish products, 40 percent on alcoholic beverages, and 10-57 percent on tobacco and products. It is also useful to remind that the VAT is 17 percent for many products. In addition to marble and other mining products, which are our classic export products to China, the sectors that can be seen as target, especially for the final consumer, bring foreign currency to our country. All kinds of products with high added value, appealing to middle and upper groups, can be sold. Among these, we can export all kinds of processed food products, ready-made clothing, fur and leather products, home textiles and carpets, jewelery products, boilers used in heating, bathroom water heaters and radiators, furniture products to China.

China's place in global trade

If we look at the trade volume between China and the USA, it was $ 560 billion in 2018. While China's exports to the USA are 431 billion dollars, its imports are seen to be 130 billion dollars. In 2019, exports increased by 0.5 percent, while imports declined by 2.8 percent.

The European Union continues to be China's largest trade partner. The USA, on the other hand, ranks third after ASEAN countries. We can do more trade with China, which is $ 556 billion in Hong Kong, $ 203 billion with Singapore, $ 346 billion with the United Arab Emirates, which is a transit trade. By establishing logistics centers that will serve at a global level, we can position global logistics and e-commerce companies that will operate there. This should be the goal of the logistics industry in the next 10 years. There are many examples of this in the world. Amazon company started its business by selling books on the internet. Seeing the opportunity in the field of logistics, it reached 310 customers worldwide, 658 thousand employees and a net turnover of 233 billion dollars. Today, it has become the fourth largest publicly traded company in the world with a market value of $ 865 billion. While these were happening in the west, Alibaba wrote another success story in the east. Reaching a turnover of approximately 55 billion dollars, the market value of the company has exceeded 550 billion dollars. In the next 10 years, both companies are expected to reach sales of 1 trillion dollars each. Turkey also has the potential to be the world's distribution base with the logistics centers it will establish.