A new global trading system is needed

This week Turkey will sign a new free trade agreement (FTA) with South Korea involving the service sector in addition to the previous agreement that covered industrial products. Thanks to the FTAs, Turkey's foreign trade with 17 countries and groups of countries has surged by 50 percent, reaching $39 billion in the past five years. It is expected that Turkey will also sign a FTA with Mexico in the near future as the result of President Recep Tayyip Erdoğan's recent visit to Latin America. Meanwhile, it is also anticipated that the FTAs Turkey signed with Lebanon, Kosovo, Malaysia, Moldova and the Faroe Islands will enter into force after their approval processes are completed.

We anticipate that a new world trade order will arise out of the FTAs signed between developing countries at the end of the first quarter of the 21st century.

Today, the General Agreement on Tariffs and Trade (GATT) falls far short of satisfying the requirements of world trade. The current world trading system is a mechanism that works in favor of developed countries, pushing aside the interests of developing countries. The legal and institutional structure of the multilateral trading system was formally created with the establishment of the World Trade Organization (WTO) in 1994. However, the system is still working to the detriment of developing countries because the WTO has failed to balance rights and laws in favor of developing countries during Development Negotiations, which commenced in Doha, Qatar in 2001.

From this point of view, it should be noted that the FTA process will gain momentum in the upcoming period. From now on, world trade will run via free-trade zone agreements, which will constitute the legal structure of a global and integrated market. Here, we will face two basic processes. The first one concerns the Transatlantic Trade and Investment Partnership (TTIP) that was initiated between the EU and U.S., and the Trans-Pacific Partnership (TPP), which complements the TTIP and has been initiated by the U.S. and Asian countries. The second one concerns Pacific-European trade and the energy transmission lines that China wants to develop as a part of a new Silk Road by supplying energy from Russia.

These two fundamental global trade axes are already struggling with each other for market acquisition, but at the same time they complement each other. This situation, which seems to be paradoxical at first, actually illustrates the multifaceted and current dynamics of globalization.

As the EU and Japan have entered a recession, everyone is aware that there is a single way out of this global crisis - moving away from so-called globalization and forming a truly global economy and politics. Certainly, economic and political structures that go back to the 20th century will resist this change, and it would be difficult for the system to adopt an economy, politics and laws in line with accelerating globalism. But now this has become an inevitable reality which should be acknowledged by everyone. More precisely, the world should be ready to face this reality, because ignoring it would mean deepening the world economic crisis indefinitely. This is the economic interpretation of Turkey's thesis that "the world is bigger than five."

In parallel with this, let us take a look at China and Japan, the two major powers of the Asian and world economies. The Bank of Japan (BOJ) needs to maintain its expansionary policy. Japanese Prime Minister Shinzo Abe will not compromise on fiscal policies and Japan will support leading domestic technological sectors and other sectors that export capital, including space, nuclear and defense technologies. So far, Japan has failed to support these fields sufficiently and was not able to export sufficient capital in such fields due to Western pressure. But this period is ending and we hope that Japan will make a strong alliance with Turkey in these fields. On the other hand, even though China's overall growth is dropping, it is also heading toward a new path that will eliminate inter-regional disparities. Thus, while China is entering a new phase that will boost prosperity within the country, it will also orientate its exports toward higher value-added goods, and it will bring forward the growth with capital exports instead of growing by exporting cheap goods. Certainly, the fact that China is beginning to export intense capital tells us that it is a new period. But this will not be like the previous limited capital exports of the West - this is a new development and integration paradigm based on the unlimited sharing of technology.

All the problems we face at the moment have always existed in different guises. The energy problems regarding the Levant, Cyprus and Iraq and the problems in the Balkans and Russia are still there in other forms. This does not mean that history repeats itself, but it has this single meaning: Those who seized the resources of these territories centuries ago established an unfair and deceptive order, which did not work for the benefit of the true owners of these resources. Now this is being destroyed and the game is being reestablished.

Turkey and Asia are meeting again, but this meeting is more realistic and profound than that which occurred in the 19th century. We need a new economy and politics that will change the overall economy, energy, markets and defense technologies that are established in a vast territory from the Adriatic Sea to the Persian Gulf and up to the Caucasus. This new economy and politics will not ostracize the EU. On the contrary, it will help the EU overcome its current crisis.