Gazi University Journal of Science

GU J Sci
29(4): 751-767 (2016)

Using Cluster Analysis to Define the Position of a

Developing Country in Global Transportation Services
Trade Environment

Ebru V. CALIR-AKNAL1, , Serpil EROL2

Gazi University Faculty of Architecture Department of City and Regional Planning, Ankara 06570,Turkey
2

Gazi University Faculty of Engineering Department of Industrial Engineering, Ankara 06570,Turkey

Received: 09/05/2016

Revised:31/08/2016

Accepted: 11/10/2016

ABSTRACT
Liberalization of services brought a competitive environment where governments on the one hand try to get access
to the markets of the most competitive sectors for them, and on the other hand they try to protect their local suppliers
against sectors global giants. Although several developing countries have participated in the globalization of
services, still some developing countries show resistance to process of liberalization in services, as they do not see
themselves as possessing much of comparative advantage in the production and exchange of services. In recent
years, publication of statistical data on services trade, has allowed researchers make international comparisons in
macro level. In this study, Turkeys position in global services trade environment is explored in the case of transport
sector. The place of Turkey among 148 member countries of World Trade Organization is evaluated by cluster
analysis with respect to transportation services trade indicators.
The results show that current position of Turkey in global services trade market is far from being competitive. The
recruitments necessary for Turkey to gain its competitiveness are proved by a scenario analysis.
Keywords: Liberalization of services; GATS; transport sector; cluster analysis; Turkey

1. INTRODUCTION
The services sector has now gained a global character as
conservative policies have left their places to liberal
policies and trade agreements in recent decades. The
first attempts of developed economies to present
services as tradable objects have now returned to a

Corresponding author, e-mail: [email protected]

global competition among many countries from all over

the World to increase the share of benefits from services
sector. Although many variables such as differential
productivity growth, outsourcing of service tasks from
manufacturing industries, shifts in the composition of

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GU J Sci, 29(4):751-767 (2016)/ Ebru V. CALIR-AKNAL , Serpil EROL

final demand etc., influence service sector, it is observed

that employment in the advanced economies shifts with
a remarkable regularity towards services as income per
capita rises (Schettkat and Yocarini, 2006). In this
competitive environment, governments on the one hand
try to get access to the markets of the most competitive
sectors for them, and on the other hand they try to
protect their local suppliers against sectors global
giants.
Several developing countries have participated in the
globalization of services. Developing countries (and
also some developed countries) have shown resistance
to process of liberalization in services. These countries
did not see themselves as possessing much of
comparative advantage in the production and exchange
of services (Sauv, 2002). One of the main reasons is
the domestic characteristic of the services which could
possibly not completely fit to the global trading system.
Another problem is the feeling that the establishment of
multilateral rules and disciplines for services would hurt
their pursuit of development goals and public policy
objectives by forcing them to open up and deregulate
their service sectors. There is also concern that the
inclusion of services would enable developed countries
to leverage across sectors, by making their concessions
in traditional areas like textiles and agriculture, where
developing countries had a comparative advantage,
conditional upon concessions by developing countries in
the service sector. The commitments allow governments
to preserve the degree of market access provided by
current regulations. The negotiations provide some
flexibility to countries in choosing the service sectors
they wished to liberalize and the limitations they wanted
to maintain on specific subsectors, activities, and modes
of supply (Chanda, 2002).
Services are seen as a key determinant of the
competitiveness of all firms in open economies.
Different sectors in services have different roles in the
economy with distinct market structures (Francois and
Hoekman, 2010). Transportation, as one of the sectors
covered by GATS, has been researched with its
subsectors. Francois and Wooton (2001) examine the
importance of market structure in the transport sector for
the distribution of gains from trade and the benefits of
trade liberalization. The paper is concerned with trade in
maritime transport services (international shipping,
transport, and related logistical services) and the
importance of competition and market structure in the
sector. Oum et al. (2001) research role of alliances in
expanding and strengthening airline global service
networks in the air transport industry which is
considered as one of the most regulated and restrictive
industries in international trade. In the study, some
issues about asymmetries in domestic regulatory policy
which make direct application of GATS concepts to air
services problematic are discussed. Zhang and Zhang
(2002) provide a general discussion of various issues
related to the liberalization of air cargo services in
international aviation. Customs and inter-modal
transportation are also discussed in the context of cargo
liberalization in the study. Kimura et al. (2004) present
the results of their analysis on the maritime and air
transportation sectors in Russia, which did not have a
membership of the World Trade Organization (WTO)

on that date (The Russian Federation has been a member

of WTO since 22 August 2012). The study depends on
questionnaire surveys. Restrictiveness index tables for
two transportation sectors with scoring weights from
literature are listed and restrictiveness indexes of
barriers to trade are estimated, which reflect the
collected information on the regulatory environment in
Russia.
The statistical issues entailing trade in services have
become important during the last decades, which helped
rise of international comparisons. A matrix summarizing
the status of the trade in services data publication by
international organizations is available at the UNSD
website
(http://unstats.un.org/unsd/tradeserv/TFSITS/matrix.htm
). A manual is first published by the UN (2002)
followed by a review in 2010 (UN, 2012) to set out an
internationally agreed framework for the compilation
and reporting of statistics of international trade in
services in a broad sense. WTO (World Trade
Organization) publishes exports and imports of total
commercial services, transport, travel and other
commercial services, by region and selected economy
for the years 1980-2013. Data for the breakdown of
other commercial services is also available as from 2000
(http://stat.wto.org). The services delivered through
enterprises that are locally established but foreigncontrolled are covered by FATS, which is the term
foreign affiliates trade in services statistics that has
been superseded by the more general term foreign
affiliates statistics, with 2007 as the first reference year
(http://ec.europa.eu/).
Clusters define the extent to which results should be
generalized to other countries (Ronen and Shenkar,
1985). In scientific literature there are studies on some
macro level interrelationships, in which cluster analysis
is used to group countries in a systematic manner, in
terms of their selected characteristics and the focused
research criteria. Fritz and Koch (2014) attempt to
empirical identify structural potentials and policy
challenges for prosperity at scales, where economic
development remains within ecological carrying
capacities. The results of cluster and correspondence
analyses for 38 countries indicate the existence of five
'prosperity regimes' and demonstrate that all aspects of
prosperity - including (unsatisfactory) ecological
performance - are linked to economic development.
Montalbano and Nenci (2014) investigate the trade
competitiveness of the new emerging Southern
economies China, India, Brazil and South Africa
(CIBS) with respect to their main global partners, with
a sample of 46 countries. Das and DiRienzo (2014)
perform a cluster analysis to group the countries into
three distinct clusters based on their similarities in the
three diversity measures. Given these country clusters,
this study examines how these different clusters
perform, on average, in regard to thirteen different
economic and political indicators. Dunning (1981)
explores the preposition of a countrys international
direct investment position, and changes in that position,
with a data set of 67 countries. Leuz et al. (2003) use
cluster analysis to define systematic differences in
earnings management across 31 countries. They perform
a descriptive cluster analysis to identify groupings of

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753

countries with similar institutional characteristics and

then show that earnings management varies
systematically across these institutional clusters. SaintArnaud and Bernard (2003) perform cluster analysis to
identify the regimes, which display specific
arrangements between markets, the state and families in
the production and distribution of the resources required
for the well-being of people. The authors' comparative
analysis allows them to identify Canada's place in the
worlds of welfare capitalism. Hirschberg et al. (1991)
propose statistical cluster analysis methods to explore
different ways and levels for clustering of 23 diverse
attributes such as political rights, civil liberties, life
expectancy, literacy, real domestic product, etc. for
measuring quality of life attributes across countries. In
the study, aggregate measures of welfare are computed
for many countries, and the sensitivity of several key
inequality measures with respect to clustering and
degrees of aggregation is studied. Boreiko (2003)
researches the Central and Eastern Europe Countries
(CEEC) readiness to join the Economic and Monetary
Union (EMU) using a fuzzy clustering algorithm to
identify the groups of countries that are closer to being
ready. Artis and Zhang (2001) look for inhomogeneity
in the actual and prospective membership of the EMU
by applying techniques of cluster analysis to a set of
variables suggested by the theory of Optimal Currency
Areas. The analysis reveals that the member countries
may be divided into a core and two periphery clusters.

Once a service is bound after negotiations in a country,

it is nearly impossible to unbound it again. For this
reason, in countries where liberalization would destroy
internal structures of the economy, the negotiations
should be followed carefully.

The literature survey shows that there are some doubts

among developing countries about liberalization in
services. National studies give clues of the possible
problems which would new partners of the market face,
but international comparisons should give a better
description of the situation. The statistical data which
have been collected by some related organizations in
recent decades would give rise to studies in macro level.

The General Agreement on Trade in Services has three

elements: the main text containing general obligations
and disciplines; annexes dealing with rules for specific
sectors; and individual countries specific commitments
to provide access to their markets, including indications
of where countries are temporarily not applying the
most-favoured-nation principle of non-discrimination
(www. wto.org).

The literature survey also shows that earlier studies have

used cluster analysis in macro level to define the
clusters which have similar characteristics. Therefore, in
this study a cluster analysis is performed.

The agreement covers all internationally-traded

services-business, communication, construction and
engineering, distribution, education, environment,
financial, health, tourism and travel, recreational,
cultural and sporting, transport and others.

Another result derived from literature survey is, sector

specific studies help better understand the dynamics of
the very comprehensive services. Transport specific
studies in this context are needed to be developed.
In Section 2, brief information on legal basis of
liberalization in trade of services is given. In Section 3,
the research related to the case study Turkey is given in
detail. In Section 4, a scenario to increase the chance of
competitiveness of Turkey in transportation services
trade sector is presented. Finally in Section 5, we
provide our conclusions and suggestions for future
studies.
2. LEGAL BASIS OF LIBERALISATION IN
TRADE OF SERVICES
Services make up over 70% of world production and
employment in advanced industrial societies although
they account only 20% of world trade (Sauv and Stern,
2010; Freund and Weinhold, 2002). The GATS brought
a new ground by broadening the scope of world trade
rules to cover trade areas never before subject to
multilateral disciplines.

The most well-known and wide-reaching agreement

involving services is the General Agreement on Trade in
Services (GATS), which became effective in 1995. The
GATS is the first and only set of multilateral rules
governing international trade in services. Negotiated in
the Uruguay Round, it was developed in response to the
huge growth of the services economy over the past 30
years and the greater potential for trading services
brought about by the communications revolution (www.
wto.org).
Services represent the fastest growing sector of the
global economy and account for two thirds of global
output, one third of global employment and nearly 20%
of global trade. When the idea of bringing rules on
services into the multilateral trading system was floated
in the early to mid-1980s, a number of countries were
not sure and even opposed. They believed such an
agreement could undermine governments ability to
pursue national policy objectives and constrain their
regulatory powers. The agreement that was developed,
however, allows a high degree of flexibility, both within
the framework of rules and also in terms of the market
access commitments (www. wto.org).

Individual countries commitments to open markets in

specific sectors-and how open those markets will be are the outcome of negotiations. The commitments
appear in schedules that list the sectors being opened,
the extent of market access being given in those sectors
(e.g. whether there are any restrictions on foreign
ownership), and any limitations on national treatment
(whether some rights granted to local companies will
not be granted to foreign companies). So, for example, if
a government commits itself to allow foreign banks to
operate in its domestic market, that is a market-access
commitment. And if the government limits the number
of licenses it will issue, then that is a market-access
limitation. If it also says foreign banks are only allowed
one branch while domestic banks are allowed numerous
branches, which is an exception to the national
treatment principle (www. wto.org).
These clearly defined commitments are bound: like
bound tariffs for trade in goods, they can only be
modified after negotiations with affected countries.
Because unbinding is difficult, the commitments are

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virtually guaranteed conditions for foreign exporters and

importers of services and investors in the sector to do
business (www. wto.org).
The study is performed only for transportation
services in the WTO database. Transportation covers all
transportation services that are performed by residents
of one economy for those of another and that involve the
carriage of passengers, the movement of goods (freight),
rentals (charters) of carriers with crew, and related
supporting and auxiliary services. Some related items
that are excluded from transportation services are freight
insurance (included in insurance services); goods
procured in ports by non-resident carriers and repairs of
transportation equipment (both are treated as goods, not
services); repairs of railway facilities, harbors and
airfield facilities (included in construction services); and
rentals or charters of carriers without crew (included in
operational leasing services) (UN, 2002).
There are also some concerns about the GATS (Sinclair,
2000):
The GATS exposes virtually any government
action affecting services to WTO oversight and
potential challenge.
Any government action, whatever its policy
objective, that arguably alters the conditions of
competition in favour of either domestic service
providers or in favour of some foreign service
providers over others, is exposed to challenge under
a very tough test of de facto discrimination.
The GATS prohibits certain types of public
policies, absolutely diminishing democratic
governmental authority.
The GATS is designed to enable transnational
corporations, in collaboration with foreign
governments, to attack general, non-discriminatory
public interest regulations as unnecessary or
burdensome.
The GATS is hostile to public services, treating
them as, at best, missed commercial opportunities
and, at worst, unfair competition or barriers to entry
for foreign services and suppliers.
The GATS investment restrictions demolish
industrial policy whether primarily aimed at goods
or services, closing off the path to development.
3. A CASE STUDY: TURKEY
3.1. Methodology and analysis
This study is concerned with the international (macro)
and national levels (micro). In international (macro)
level cluster analysis is performed to group linkages in
the transportation services trade indicators as a whole.
The analysis is focused on definition of clusters thus the
linkages among countries. A meso level of analysis for
regional blocks is not in the scope of this study. In
national (micro) level, and the competitiveness of a
single country (Turkey) in the global transportation
services trade environment is evaluated by country
specific services trade indicators of the WTO (Table 1).

Table 1. Methodology and focus of analysis

Level of
Analysis

Methodology

Focus of Analysis

National level
(micro)

Literature survey
(country specific
services
trade
indicators)

Competitiveness
of
Turkeys
economy
Need
for
innovation
and
structural reforms

International
level (macro)

Cluster
analysis(Group
linkages in the
transportation
services trade
indicators as a
whole)

Definition
of
(leading) clusters

In order to define the Turkeys position in worlds

services trade environment, cluster analysis has been
performed to group countries with similar transportation
services indicators characteristics. The aim is first to
identify country clusters with similar features such as
the market indicators of transportation sector,
investment in economy (mill.US$) in the sector,
production and employment, number of passengers,
amount of freight, freight, investment in transportation
services imports, investment in transportation services
exports, and investment abroad, and then to examine
whether a shift to a more competitive cluster is possible.
The database is derived from WTO (World Trade
Organization) for 148 member countries. The cluster
analyses are performed for valid cases that have relevant
data for the last possible year. The criteria for cluster
analysis for transportation services sector are given in
Table 2.
The n<300, so a hierarchical cluster analysis with an
agglomerative model is performed. For distances
between clusters, Wards method, that for each cluster,
the means for all variables are calculated, has been
selected. In this method, for each case, the squared
Euclidean distance to the cluster means is calculated.
These distances are summed for all of the cases. At each
step, the two clusters that merge are those that result in
the smallest increase in the overall sum of the squared
within-cluster distances. The coefficient in the
agglomeration schedule is the within-cluster sum of
squares at that step, not the distance at which clusters
are joined. Values are standardized by Z scores because
the measurement scales are different from each other.

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Table 2. The criteria for cluster analysis for

transportation services sector
Variable

Items

market indicators of
transportation sector

number of international
airports, airplanes fleet
(no), maritime merchant
fleet (000 DWT) rail
lines (km), road lines
(km)

investment in economy
(mill.US$)

inward FDI stocks,

inward FDI flows

production and employment

value added (mill. US$),

% of total value added,
employment (% of tot.
employment, container
port traffic ('000 TEUs)

The share of employment in services is commonly

given as a good proxy for an economys level of
development as it tends to rise with per capita incomes
(OECD, 2002). According to WTO data for the year
2011, Turkeys share of employment in services is
43.8% and GNP per capita in thousands of USD has
raised to 18,800 from 8,190 in 1999 (Worldbank data,
http://data.worldbank.org/indicator/NY.GNP.PCAP.PP.
CD).
In Figure 1, GNI per capita, PPP (current international
$) of Turkey between 1998 and 2010 is given. PPP GNI
is the gross national income (GNI) converted to
international dollars using purchasing power parity
rates.
16,000
14,000

passengers

by air, by rail, by road

freight

by air, by rail, by road

transportation services imports

(mill.US$)

by sea, by air, by other

transport

8,000

transportation services exports

(mill.US$)

by sea, by air, by other

transport

4,000

investment abroad (mill.US$)

stocks, flows

12,000
10,000
6,000
2,000
0,000
1998

Some detailed information regarding country specific

services trade indicators of Turkey is also gathered from
WTO and some indicators are presented in graphics.

2002

2002

2004

2006

2008

2010

In Figure 2, services value added (% of GDP) in Turkey

between 1998 and 2010 is given. Services include value
added in wholesale and retail trade (including hotels
and restaurants), transport, and government, financial,
professional, and personal services such as education,
health care, and real estate services. Also included are
imputed bank service charges, import duties, and any
statistical discrepancies noted by national compilers as
well as discrepancies arising from rescaling. Value
added is the net output of a sector after adding up all
outputs and subtracting intermediate inputs. It is
calculated without making deductions for depreciation
of fabricated assets or depletion and degradation of
natural resources.

Turkeys
commitment
list
covers
business,
communication, construction & engineering, education,
environment, financial, health, tourism & travel and
transport services. As a developing country Turkey
needs to define its role and position in global services
trade environment before completing negotiations and
making structural reforms in its legal procedures. In this
study, Turkeys position in global services trade
environment is explored in the case of transport sector.
In transportation sector, Turkeys GATS commitments
cover maritime transport, airway transport, railway
transport and road transport.

2000

2000

Figure 1. GNI per capita, PPP (current international $)

of Turkey
Worldbank data, http://data.worldbank.org/

3.1.1. Micro Level Analysis: A General Overview of

Turkeys Transportation Services Trade

66,0
65,0
64,0
63,0
62,0
61,0
60,0
59,0
58,0
57,0
1998

755

2004

2006

Figure 2. Services value added (% of GDP) in Turkey

Worldbank Data, http://data.worldbank.org

2008

2010

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756

In Figure 3, trade in services (% of GDP) in Turkey

between 2005 and 2013 is given. Trade in services is

the sum of service exports and imports divided by the

value of GDP, all in current U.S. dollars.

10,0
9,0
8,0
7,0
6,0
5,0
4,0
3,0
2,0
1,0
0,0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Figure 3. Trade in services (% of GDP) in Turkey

Worldbank Data, http://data.worldbank.org/indicator/BG.GSR.NFSV.GD.ZS/countries
In Figure 4, investment in transport with private
participation is given. Investment in transport projects
with private participation covers infrastructure projects
in transport that have reached financial closure and
directly or indirectly serve the public. Movable assets
and small projects are excluded. The types of projects
included are operations and management contracts,
operations and management contracts with major capital
expenditure, greenfield projects (in which a private
entity or a public-private joint venture builds and
operates a new facility), and divestitures. Investment
commitments are the sum of investments in facilities
and investments in government assets. Investments in
facilities are the resources the project company commits
to invest during the contract period either in new
facilities or in expansion and modernization of existing
facilities. Investments in government assets are the
resources the project company spends on acquiring
government assets such as state-owned enterprises,
rights to provide services in a specific area, or the use of
specific radio spectrums. Data are in current U.S.
dollars.
14000

3000000
2500000
2000000
1500000
1000000
500000
0
2002

2004

2006

2008

2010

2012

2014

Figure 4. Investment in transport with private

participation (current 1.000 US$)
Figure 5 shows that, exports in transportation services
sector in Turkey have a tendency to increase in a linear
trend. The figure also shows that a gap between imports
and exports are growing. The increase in imports
follows
a
polinomial
trend.

y = 1090,1x + 6548,1
R = 0,9521

12000

y = 128x2 - 453,03x + 7900,6

R = 0,7114

10000
8000
6000
4000
export
s

2000

0
2008 2009 2010 2011 2012 2013

Figure 5. Exports and imports (in Mill.US$) in transportation services sector in Turkey
According to the World Trade Organizations data,
import and export in transportation services in Turkey
are given as a time series between 2006 and 2011 in
Figure 5. The subsectors are given in Figure 6. Figure

shows that airway is the leading subsector in exports in

transportation services. Maritime subsector is the leader
in imports in transportation services.

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757

Mill.US$

Mill.US$
10000

10000
9000

9000

exports

8000
7000

maritime

6000

air

5000

rail

4000

road

7000

maritime

6000

air

5000

rail

4000

3000

3000

2000

2000

1000

1000

imports

8000

road

0
2007

2008

2009

2010

2011

2012

2007

2008

2009

2010

2011

2012

Figure 6. Exports and imports (in Mill.US$) in transportation services by sub-sectors in Turkey
The results of the micro level analysis show that, Turkey
has a potential to increase the income from services
activities. The tendencies in recent years show that
investment in private sector does not follow a regular
development, which can be an obstacle against expected
growth.
A list of general indicators of Turkeys transportation
services trade is given in Appendix 1.
3.1.2. Macro level analysis: Results of cluster analysis
A cluster analysis was run on 65 valid cases (countries)
each responding to items on market indicators of
transportation sector (number of international airports,
airplanes fleet (no), maritime merchant fleet (000
DWT) rail lines (km), road lines (km)). A hierarchical
cluster analysis using Wards method produced four
clusters, between which the variables were significantly
different in the main. USA is alone in the cluster with
highest comparative advantage. Turkey is in the most
populated cluster.
A cluster analysis was run on 93 valid cases (countries)
each responding to items on investment in economy
(mill.US$) in transportation sector (inward FDI stocks,
inward FDI flows. The analysis produced two clusters,
between which the variables were significantly different
in the main. Turkey is in the most populated cluster.
A cluster analysis was run on 84 valid cases (countries)
each responding to items on investment in transportation
production and employment (value added (mill. US$),
% of total value added, employment (% of tot.
employment, container port traffic ('000 TEUs)). The
analysis produced three clusters, between which the
variables were significantly different in the main.
Turkey is in the second cluster.

A cluster analysis was run on 44 valid cases (countries)

each responding to items on passengers (by air, by rail,
by road). The analysis produced three clusters, between
which the variables were significantly different in the
main. Turkey is in the most populated cluster.
A cluster analysis was run on 36 valid cases (countries)
each responding to items on freight (by air, by rail, by
road). The analysis produced three clusters, between
which the variables were significantly different in the
main. Turkey is in the most populated cluster.
A cluster analysis was run on 86 valid cases (countries)
each responding to items on investment in transportation
services imports (mill.US$) (by sea, by air, by other
transport). The analysis produced five clusters, between
which the variables were significantly different in the
main. Turkey is in the most populated cluster.
A cluster analysis was run on 81 valid cases (countries)
each responding to items on investment in transportation
services exports (mill.US$) (by sea, by air, by other
transport). The analysis produced five clusters, between
which the variables were significantly different in the
main. Turkey is in the most populated cluster.
A cluster analysis was run on 43 valid cases (countries)
each responding to items on investment abroad
(mill.US$) (flows, stocks). The analysis produced three
clusters, between which the variables were significantly
different in the main. Turkey is in the most populated
cluster.
The results of the macro analysis show for each of the
given criteria Turkey takes place on crowded clusters
with many other countries. Some countries on the other
hand take place in more competitive clusters.

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758

Australia

TOTAL

investment abroad

transportation services export

transportation services import

freight

passengers

production and employment

investment in economy

market indicators

Table 3. A comparison of clusters according to all criteria

Austria

Belgium

Canada

China

Colombia

+
+

2
+

8
1

Denmark

France

Germany

Greece

India

Italy

Japan

+
+

2
+

Malaysia
Mexico

Netherlands

1
+

Norway

Poland

Russian Federation

Singapore
Spain

+
+

Switzerland

United Kingdom

USA

TOTAL

13

In Table 3, 25 countries which do not belong to the

crowded clusters of each criterion take place. In the
right column, the sum of the criteria that a country
meets as a competitive advantage is given. We see that,
only two countries, China and the USA, are far from all
other countries for all of the given criteria. The nearest
countries are Japan and United Kingdom, showing
uniqueness in only 5 criteria. Australia, Colombia,
Malaysia, Mexico, Poland and Singapore, as potential

3
+

15

16

11

66

competitors, show their competitiveness in just one

criterion at the moment.
3.2. Scenarios to increase Turkeys chance in
services trade in transportation sector
The results of the macro analysis show that for the given
criteria, most countries tend to take place in large
clusters. According to the cluster analyses, Turkey takes
place in crowded clusters with many other countries

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(Appendix B). For none of the given criteria a relative

competitiveness is observed. For a competition, Turkey
needs to make a jump to the league of these 25
countries.
Among the 8 criteria, 3 of them are mostly observed in
most of the countries. Transportation services imports
(15 countries), transportation services exports (16
countries), and market indicators (13 countries) are three

759

of the criteria which can be used to change a countrys

position in clusters for future scenarios.
3.2.1.Scenario 1. increase transportation services
imports (mill.US$)
A scenario study with transportation services imports
(mill.US$) is examined to change a Turkeys position in
clusters for future scenarios.

Table 4. A scenario study with transportation services imports (mill.US$)

Transportation services imports

Current situation
(mil.ABD$)

Hypothetical
(1000 increase )
(mil.ABD$)

Hypothetical (2000
increase ) (mil.ABD$)

Hypothetical (3000
increase )
(mil.ABD$)

Maritime

5293

6293

7793

8293

Air

3078

4078

5078

6078

Other

442

1442

2442

3442

CLUSTER

(no change)

(no change)

4 (shift from 5)

Step 1: The transportation services imports of Turkey

are hypothetically increased by 1000 (mill.US$) for
each iteration and a possible breakdown is searched to
shift Turkey to a better (more competitive) cluster.

sub-sector (sea, air, other), then Turkey moves to the

Cluster 2 with Austria, Belgium, Canada, Italy,
Netherlands, Russian Fed, Spain and United Kingdom,
which is a more competitive place (Appendix C).

Step 2: The transportation services imports of Turkey

are hypothetically increased by 2000 (mill.US$) for
each iteration and a possible breakdown is searched to
shift Turkey to a better (more competitive) cluster.

3.2.2. Scenario 2. increase transportation services

exports (mill.US$)

Step 3: It is found that if transportation services imports

(mill.US$) can be increased by 3000 (mill.US$) in each

A scenario study with transportation services exports

(mill.US$) is examined to change a Turkeys position in
clusters
for
future
scenarios

.
Table 4. A scenario study with transportation services exports (mill.US$)
Transportation services exports

Current situation
(mil.ABD$)

Hypothetical
(1000 increase )
(mil.ABD$)

Hypothetical (2000
increase ) (mil.ABD$)

Maritime

1666

2666

3666

Air

8763

9763

10763

3038

4038

Other

2038

CLUSTER

Step1: The transportation services exports of Turkey are

hypothetically increased by 1000 (mill.US$) for each
iteration and a possible breakdown is searched to shift
Turkey to a better (more competitive) cluster.
Step 2: In the second step it is found that If
transportation services exports (mill.US$) can be
increased by 2000 (mill.US$) in each sub-sector (sea,
air, other), then Turkey moves to the Cluster 2 with
Austria, Belgium, France, Netherlands, Poland, Russian
Fed and Spain (Appendix C).

(no change)

4 (shift from 5)

3.2.3. Scenario 3. Increase market indicators of

transportation sector
A scenario study with market indicators of
transportation sector is examined to change a Turkeys
position in clusters for future scenarios.
Step 1: Market indicators of transportation sector
(International airports (nr), airplanes (nr), maritime fleet
(DWT), rail lines (km), road lines (km)) are
hypothetically increased by 10%. Unfortunately these
changes are not enough to change the related cluster.
Step 2: Market indicators of transportation sector
(International airports (nr), airplanes (nr), maritime fleet

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(DWT), rail lines (km), road lines (km)) are

hypothetically increased by 20%. If these numbers
increase, then Turkey moves to the Cluster 2 with

Canada, France, Germany, Italy, Japan, Mexico,

Russian Fed, Spain and Indonesia (Appendix C).

Table 5. A scenario study with market indicators of transportation sector

Market indicators of
transportation sector

Current situation

Int_airports (nr)

Hypothetical (10% increase in

each item)

Hypothetical (20% increase in each

item)

13

14

16

526

579

631

10123

11135

12148

Rail_lines (km)

9718

10690

11662

Road_lines (km)

37027

40729

4 (no change)

Airplanes (nr)
Maritime_fleet (DWT)

CLUSTER

444331
3

(shift from 4)

4. RESULTS AND DISCUSSION

This study intends to show the position of a country
among other World Trade Organization members in the
GATS negotiations process in the transport sector. The
results show that the current position of Turkey in
global services trade market is ordinary and far from
being competitive, despite its growth in the transport
services trade. Turkey, as a case study, needs to make
some improvements in selected criteria to get a better
position, thus cluster, in the giants world. The scenario
studies show that it is possible to shift to better clusters
if some structural changes are to be made.
Transportation services include aviation, ocean
shipping, inland waterways, railroads, trucking,
pipelines, and intermodal services as well as ancillary
and support services in ports, airports, railyards, and
truck terminals. High transport costs, together with
shipping costs are a barrier to international trade. GATS
regulations can help reduce barriers to trade if managed
well. Countries can define their level of liberalization
and protect their local market conditions accordingly.
On the other hand, an increase in export and import of
transportation services, in addition to increasing
capacity of transport infrastructure, would provide an
attractive environment also for merchandise trade.
Transportation is the indispensable service for

international trade in goods moving all manufactured,

mining, and agriculture products to market as well as
transporting business and leisure travelers around the
World and level of transport costs determine the
potential access to foreign markets. In Turkey there are
some restrictions for a more liberalised supply of
transport services. Cabotage restrictions in maritime
transport and more strict regulations in railway transport
aim to protect local conditions. These restrictions are at
the same time barriers to international trade of transport
services. So, in order to increase Turkeys position in
Worlds transportation services trade, regulations to
allow foreign investors should be prepared. Competition
with foreign firms in market should be allowed. Some
targeted infrastructure investments should be realized.
Regional cooperation on transportation and trade
facilitation initiatives together with some neighbouring
countries should be supplied.
Further studies could focus on developing new scenarios
to change the cluster profiles. Each of the criteria can be
examined to see the possibility to change the position of
Turkey in global competitive market.
This study has been performed for transport specific
services. The study can be extended to each of the
service sectors.
The study can also be performed for any other country
which has part in the database.

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Appendix A. General indicators of Turkeys transportation services trade

Value % Change
2013 2005-13
2013
Investment in economy (mill. US$)
Gross fixed capital formation
Inward FDI
Stocks (2011)
Flows (2011)

Share
in world

...

...

...

1253
214

...
-

1
-

13
526
10123
9718
370276

...
...
5
1
1

...
...
5
1
1

105157
15.3
4.7
6230

8
0
...
10

9
4
-4
4

116867
3775
242265

...
-4
5

21
-18
7

2.0%
0.1%

2349
10244
203072

25
2
3

21
-4
7

1.3%
0.1%

9656
5293
3078
442

8
8
8
6

10
6
4
-21

0.8%

Transportation services exports

By sea (2012)
By air (2012)
By other transport (rail, road, ...) (2012)

13066
1666
8763
2038

13
8
15
12

5
17
16
10

1.4%

Other trade-related indicators

International freight
By sea (mill. tons)
By air (mill.ton-km)
By road (mill.ton-km)
Intl. passengers - By air (mill. P-Km)

...
2325
...
93450

...
25
...
...

...
22
...
22

357
587

...
-

22
-

Market indicators
International airports (no., 2005)
Airplanes fleet (no., 2005)
Maritime merchant fleet ('000 DWT)
Rail lines, tot. network (km)
Road lines, tot. network (km, 2011)
Production and Employment
Value added (mill. US$, 2011) a
% of total value added (2011) a
Employment (% of tot. employment, 2011)
Container port traffic ('000 TEUs, 2012)
Passengers (mill. P-Km)
By air
By rail
By road (2011)
Freight (mill. ton-km)
By air
By rail
By road (2011)
Trade - Balance of Payments (mill. US$)
Transportation services imports
By sea (2012)
By air (2012)
By other transport (rail, road, ...) (2012)

Investment abroad (mill. US$)

Outward FDI
Stocks (2011)
Flows (2011)

1.1%
1.9%
0.6%
0.9%

1.0%

1.5%
2.6%

http://stat.wto.org/ServiceProfile/WSDBServicePFView.aspx?Language=E&Country=TR

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762

Appendix B. Country clusters

Variable

Cluster 1

Cluster 2

Cluster 3

Cluster 4

Canada, France,
Germany, Italy, Japan,
Mexico, Russian Fed,
Spain

Argentina, Australia,
Austria, Azerbaijan,
Bangladesh, Belarus,
Belgium, Bolivia,
Brazil, Bulgaria,
Cambodia,
Cameroon, Chile,
Colombia, Congo,
Croatia, Denmark,
Egypt, Estonia,
Finland, Georgia,
Indonesia, Ireland,
Israel, Jordan,
Kazakhstan, Korea,
Latvia, Lithuania,
Luxembourg,
Madagascar,
Malaysia, Morocco,
Mozambique,
Netherlands,
Norway, Pakistan,
Peru, Poland,
Portugal, Romania,
Saudi Arabia, Slovak
Rep, Slovenia, Sri
Lanka, Sweden,
Switzerland,
Thailand, Tunisia,
Turkey, Ukraine,
Viet Nam

Countries sorted by
market indicators of
transportation sector
(number of
international
airports, airplanes
fleet (no), maritime
merchant fleet (000
DWT) rail lines
(km), road lines
(km))

USA

China, Greece, India,

United Kingdom

Countries sorted by
investment in
economy (inward
FDI stocks, inward
FDI flows)

Australia,
Belarus,
China,
Colombia,
Netherlands,
Singapore,
Switzerland,
United
Kingdom,
USA

Argentina, Austria,
Bangladesh,
Belgium, Bolivia,
Bosnia, Botswana,
Brazil, Bulgaria,
Cabo Verde,
Cambodia, Canada,
Chile, Congo Dem.,
Croatia, Cyprus,
Denmark, Dominican
R, Ecuador, Egypt,
El Salvador, Estonia,
Ethiopia, Fiji,
Finland, France,
FYR Macedon,
Georgia, Germany,
Greece, Guatemala,
Honduras, Hungary,
Iceland, India,
Ireland, Israel, Italy,
Japan, Jordan,
Kazakhstan, Korea,
Kyrgyz Rep, Latvia,
Lithuania,
Luxembourg, Macao
Chin, Madagascar,
Malawi, Malaysia,
Malta, Mauritius,
Mexico, Morocco,
Mozambique,
Namibia, New
Zealand, Nicaragua,
Norway, Oman,
Pakistan, Panama,
Paraguay, Peru,
Philippines, Poland,
Qatar, Romania,
Russian Fed, Saudi
Arabia, Slovak Rep,

Cluster 5

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Slovenia, South
Africa, Spain,
Sweden, Tanzania,
Thailand, Turkey,
Uganda, Ukraine,
United Arab,
Uruguay, Viet Nam,
Zambia
Countries sorted by
production and
employment (value
added (mill. US$),
% of total value
added, employment
(% of tot.
employment,
container port
traffic ('000 TEUs))

China, Japan,
USA

Bahamas,
Bangladesh,
Barbados, Belize,
Chile, Colombia,
Cuba, Egypt,
Estonia, Jamaica,
Latvia, Lithuania,
Madagascar,
Maldives, Mauritius,
Norway, Pakistan,
Panama, Peru,
Philippines, Russian
Fed, Singapore,
South Africa, Sri
Lanka, Tanzania,
Turkey, Ukraine,
United Arab
Emirates

Argentina, Australia,
Austria, Belgium,
Brazil, Bulgaria,
Canada, Chinese
Taipei, Costa Rica,
Croatia, Cyprus,
Denmark, Dominican
Republic, Ecuador, El
Salvador, Finland,
France, Georgia,
Germany, Greece,
Guatemala, Honduras,
Iceland, Indonesia,
Ireland, Israel, Italy,
Korea Rep, Kuwait,
Malaysia, Malta,
Mexico, Morocco,
Netherlands, New
Zealand, Nicaragua,
Nigeria, Paraguay,
Poland, Portugal,
Qatar, Romania, Saudi
Arabia, Senegal,
Slovenia, Spain,
Sweden, Switzerland,
Thailand, United
Kingdom, Uruguay,
Venezuela, Yemen

Countries sorted by
passengers (by air,
by rail, by road)

USA

China

Argentina, Australia,
Austria, Azerbaijan,
Belarus, Belgium,
Bulgaria, Canada,
Croatia, Cuba,
Denmark, Egypt,
Finland, France,
Germany, Greece,
Hungary, Ireland, Italy,
Japan, Kazakhstan,
Korea, Kyrgyz Rep,
Latvia, Lithuania,
Luxembourg, Mexico,
Netherlands, Norway,
Pakistan, Poland,
Portugal, Romania,
Russian Federation,
Serbia, Spain, Sweden,
Switzerland, Turkey,
Ukraine, United
Kingdom, Viet Nam

Countries sorted by
freight (by air, by
rail, by road)

USA

China

Australia, Austria,
Azerbaijan, Belgium,
Bulgaria, Canada,
Colombia, Croatia,
Finland, France,
Germany, Greece,
India, Ireland, Italy,
Japan, Kazakhstan,
Kyrgyz Rep,
Luxembourg,
Mexico, Morocco,
Norway, Pakistan,
Poland, Portugal,
Romania, Russian Fed,

763

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764

Serbia, Spain,
Switzerland, Turkey,
Ukraine, United
Kingdom, Viet Nam
Countries sorted by
transportation
services imports (by
sea, by air, by other
transport)

France,
Germany,
USA

Denmark, India,
Japan

China

Austria, Belgium,
Canada, Italy,
Netherlands, Russian
Fed, Spain, United
Kingdom

Afghanistan,
Argentina,
Azerbaijan,
Bangladesh,
Barbados, Belarus,
Benin, Bolivia,
Bosnia, Brazil,
Bulgaria, Burkina
Fas, Burundi,
Cambodia,
Cameroon, Chile,
Chinese Tai,
Colombia, Costa
Rica, Croatia,
Cyprus, Ecuador,
Egypt, El
Salvador, Estonia,
Ethiopia, Finland,
FYR Macedon,
Georgia, Greece,
Guatemala,
Honduras,
Hungary, Iceland,
Ireland, Israel,
Kazakhstan,
Kenya, Latvia,
Lebanese Re,
Libya, Lithuania,
Luxembourg,
Malaysia, Mali,
Malta,
Montenegro,
Morocco,
Mozambique,
Namibia,
Nicaragua, Niger,
Norway, Pakistan,
Paraguay, Poland,
Portugal,
Romania, Rwanda,
Senegal, Serbia,
Slovak Rep,
Slovenia,
Swaziland,
Sweden, Tanzania,
Togo, Tunisia,
Turkey, Ukraine,
Venezuela

Countries sorted by
transportation
services exports (by
sea, by air, by other
transport)

USA

Greece, India,
Norway

China, Denmark,
Germany, Japan,
United Kingdom

Austria, Belgium,
France, Netherlands,
Poland, Russian Fed,
Spain

Argentina,
Azerbaijan,
Bangladesh,
Barbados, Belarus,
Benin, Bermuda,
Bosnia, Brazil,
Bulgaria, Burkina
Fas, Cambodia,
Cameroon,
Canada, Chile,
Chinese Tai,
Colombia, Costa
Rica, Croatia,
Cyprus, Djibouti,
Dominican R,
Egypt, El
Salvador, Estonia,
Ethiopia, Finland,
FYR Macedon,
Georgia,

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765

Guatemala,
Honduras,
Hungary, Iceland,
Ireland, Israel,
Italy, Kazakhstan,
Kenya, Latvia,
Lebanese Re,
Libya, Lithuania,
Luxembourg,
Malaysia, Mali,
Malta,
Montenegro,
Morocco,
Mozambique,
Nicaragua, Niger,
Portugal,
Romania, Rwanda,
Senegal, Serbia,
Slovak Rep,
Slovenia, Sudan,
Swaziland,
Sweden, Togo,
Tunisia, Turkey,
Ukraine
Countries sorted by
investment abroad
(flows, stocks)

Denmark,
France,
Germany,
Japan,
Malaysia,
Norway,
Switzerland,
United
Kingdom

China, Netherlands,
USA

Australia, Austria,
Belgium, Brazil,
Bulgaria, Chile,
Croatia, Cyprus,
Estonia, Finland, FYR
Macedon, Greece,
Hungary, Iceland,
Israel, Italy,
Kazakhstan, Korea,
Latvia, Lithuania,
Macao Chin, Malta,
Morocco, Poland,
Qatar, Romania,
Slovak Rep, Slovenia,
Spain, Sweden,
Thailand, Turkey

Appendix C. Cluster after scenario studies

Scenario 1
Variable
Countries sorted by
transportation
services exports (by
sea, by air, by other
transport)

Cluster 1
USA

Cluster 2
Greece,
India,
Norway

Cluster 3
China,
Denmark,
Germany,
Japan, United
Kingdom

Cluster 4
Austria,
Belgium,
France,
Netherlands,
Poland,
Russian Fed,
Spain, Turkey

Cluster 5
Argentina, Azerbaijan, Bangladesh, Barbados,
Belarus, Benin, Bermuda, Bosnia, Brazil,
Bulgaria, Burkina Fas, Cambodia, Cameroon,
Canada, Chile, Chinese Tai, Colombia, Costa
Rica, Croatia, Cyprus, Djibouti, Dominican R,
Egypt, El Salvador, Estonia, Ethiopia, Finland,
FYR Macedon, Georgia, Guatemala, Honduras,
Hungary, Iceland, Ireland, Israel, Italy,
Kazakhstan, Kenya, Latvia, Lebanese Re,
Libya, Lithuania, Luxembourg, Malaysia, Mali,
Malta, Montenegro, Morocco, Mozambique,
Nicaragua, Niger, Portugal, Romania, Rwanda,
Senegal, Serbia, Slovak Rep, Slovenia, Sudan,
Swaziland, Sweden, Togo, Tunisia, Ukraine

Scenario 2
Variable

Cluster 1

Cluster 2

Countries sorted by
transportation
services imports (by
sea, by air, by other

France,
Germany,
USA

Denmark,
India,
Japan

Cluster 3
China

Cluster 4
Austria,
Belgium,
Canada, Italy,
Netherlands,
Russian Fed,

Cluster 5
Afghanistan, Argentina, Azerbaijan,
Bangladesh, Barbados, Belarus, Benin, Bolivia,
Bosnia, Brazil, Bulgaria, Burkina Fas, Burundi,
Cambodia, Cameroon, Chile, Chinese Tai,
Colombia, Costa Rica, Croatia, Cyprus,

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766

transport)

Spain, United
Kingdom,
Turkey

Ecuador, Egypt, El Salvador, Estonia, Ethiopia,

Finland, FYR Macedon, Georgia, Greece,
Guatemala, Honduras, Hungary, Iceland,
Ireland, Israel, Kazakhstan, Kenya, Latvia,
Lebanese Re, Libya, Lithuania, Luxembourg,
Malaysia, Mali, Malta, Montenegro, Morocco,
Mozambique, Namibia, Nicaragua, Niger,
Norway, Pakistan, Paraguay, Poland, Portugal,
Romania, Rwanda, Senegal, Serbia, Slovak
Rep, Slovenia, Swaziland, Sweden, Tanzania,
Togo, Tunisia, Ukraine, Venezuela

Scenario 3
Variable
Countries sorted by
market indicators of
transportation sector
(number of
international airports,
airplanes fleet (no),
maritime merchant
fleet (000 DWT) rail
lines (km), road lines
(km))

Cluster 1
USA

Cluster 2
China, Greece,
India, United
Kingdom

CONFLICT OF INTEREST
No conflict of interest was declared by the authors.

Cluster 3

Cluster 4

Canada, France,
Germany, Italy,
Japan, Mexico,
Russian Fed, Spain,
Indonesia, Turkey

Argentina, Australia, Austria, Azerbaijan,

Bangladesh, Belarus, Belgium, Bolivia, Brazil,
Bulgaria, Cambodia, Cameroon, Chile, Colombia,
Congo, Croatia, Denmark, Egypt, Estonia,
Finland, Georgia, Ireland, Israel, Jordan,
Kazakhstan, Korea, Latvia, Lithuania,
Luxembourg, Madagascar, Malaysia, Morocco,
Mozambique, Netherlands, Norway, Pakistan,
Peru, Poland, Portugal, Romania, Saudi Arabia,
Slovak Rep, Slovenia, Sri Lanka, Sweden,
Switzerland, Thailand, Tunisia, Ukraine, Viet
Nam

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competition, Review of International
Economics, 9(2): 249-261. (2001).
[8] Freund, C., Weinhold, D., The Internet and
international trade in services, American
Economic Review, 236-240, (2002).

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