The main theme of this year's G-20 Summit, for which Japan is the term president, is preservation of the international liberal order. Countries such as Germany, China and Japan, which have significant weight in the world economy, are worried about protectionist measures, which have been gradually increasing since U.S. President Donald Trump took office. France, on the other hand, is avoiding this issue as a confused economy. Moreover, due to troubles in its economy and its governmental policies, the yellow vest protestors have been in the streets for months. Trade wars that the U.S. has hardened step by step to close its foreign trade deficit with the European Union and China have reached such a level that they are forcing companies exporting to the U.S. to establish factories in the country or prohibit their cooperation with American companies.
Google, ARM, Intel, Qualcomm, Microsoft, Panasonic and other brands have suspended their business with Huawei. International Monetary Fund (IMF) President Christine Lagarde, who issued an evaluation note before the G-20 meetings, which will take place one after the other in Japan and end with the Leaders' Summit on June 28-29, pointed out that if the trade wars' reach includes additional taxes on all trade between the U.S. and China, the loss in gross domestic product (GDP) could reach $455 billion, which is greater than G-20 member South Africa's GDP.
Japan's Foreign Minister Taro Kono, the host of the G-20 Summit, noted that the G-20, which is at a turning point in the international community, was founded at a time when confidence in international order was shaken and that it has been providing global prosperity since WWII. Kono, who stressed that the highest priorities at the G-20 Summit were to support the liberal international order, including a free and fair trade system, referred to the increasing trade and technological tension between the U.S. and China.
The IMF side, on the one hand, raised the potential loss from escalating trade tensions between the U.S. and China in the world's GDP from 0.3 percent to 0.5 percent for 2020. The biggest U.S. expectation of China is to let the yuan fluctuate freely. The Chinese side, on the other hand, does not want to lose the advantage of the yuan's low value. After the holidays, we will carefully monitor the reflections from the G-20 finance and treasury ministers meeting.
Turkish exports rack up records
Turkish exporters, the field soldiers of Turkey's trade diplomacy, broke two records in the republic's history in May. One was on a daily basis. The previous daily record was on Aug. 17, 2018 at $1.2 billion. The new daily export record was broken by reaching $1.3 billion on May 31. On a monthly basis, on the other hand, according to private trade system calculations, the monthly record was previously broken at $15.6 billion in October 2018; this record was carried to $15.9 billion and has leaned on the psychological limit of $16 billion. According to the general trade system calculation method, the new record is $16.8 billion.
The records are, of course, not limited to this. Ten of our provinces and seven sectors reached all-time-high monthly export figures in May. Of the 41,326 firms exporting in May, 5,076 exported for the first time ever in May. These firms did not export in the first four months of the year. More importantly, 1,874 Turkish companies exported for the very first time. In May, Ankara, Denizli, Gaziantep, Istanbul, İzmir, Kayseri, Konya, Kütahya, Tekirdağ and Van realized the highest monthly export figures in their history.
Chad, Singapore, Malta, Liberia and Mauritania, on the other hand, were the countries with the highest share of export volume. Germany, Italy, the U.K., the U.S. and Iraq were the countries we exported the most to, ranging between $1.5 billion and $784 million on a monthly basis. One interesting detail is also the parity effect. If the euro had not depreciated against the dollar, our exports would be $437 million higher, and the $16 billion bar would have been broken. Due to the depreciation of the euro since the beginning of the year, our exports are $2.8 billion lower than they should be.
While Trade Minister Ruhsar Pekcan pointed out that the rapid decrease in the foreign trade deficit reduced the economy's need for external financing, Treasury and Finance Minister Berat Albayrak emphasized that Turkey will have a current account surplus over the summer. Turkish Exporters' Assembly (TİM) President İsmail Gülle, on the other hand, said that, as the large exporter family, they provide the strongest contribution to Turkey's production, employment and growth and that they will continue to serve Turkey in every field with exports of goods and services to primarily diminish the current account deficit and to sustain investments to maintain our competitiveness in global trade. The success of our exports will be critically important for growth in 2019.