Turkey Israel Hit Peak Point in Trade
Despite their political relationship hitting rock bottom, it is business as usual when it comes to trade flow between the Turkey and Israel.
The number of Israeli tourists visiting Turkey has plunged since the notorious flotilla incident; however, the trade volume between the two countries and Turkey’s exports to Israel are at their highest level since the two started trading after Israel was established in the late 1940s
The rosy decades-long relationship between Turkey and Israel took a big hit in May 2010 when Israeli soldiers attacked the Mavi Marmara, one of the vessels in a humanitarian aid convoy heading to Gaza. The incident threw the two countries’ warm relations deep into cold water, with a heated period of diplomacy on both sides.
The immediate result was a sharp decline in the number of Israeli tourists visiting Turkey, which had been steadily increasing before the Mavi Marmara incident. According to data released by the Ministry of Culture and Tourism, the number of Israeli tourists visiting Turkey saw steady growth until 2010, reaching more than half a million per annum by 2008. However, the surge was reversed by 50 percent in the first two months of 2011, compared to the same period a year before.
However, such a sharp decline in the number of Israeli tourists was not echoed in the two countries’ the bilateral trade activities. Despite their political relationship hitting rock bottom, it is business as usual when it comes to trade flow between the two countries. The two countries developed strong grounds for trade over more than half a century of relations, with a number of trade agreements signed. Of those, several were signed in 1996 such as a free trade agreement; cooperation agreements in the fields of trade, industry, economy and science; an agreement on the prevention of double taxation and finally an investment promotion and protection agreement.
Speaking to Sunday’s Zaman, Ekrem Güvendiren, the co-chair of the Turkish-Israeli Business Council, said that the continuing lively trade between Turkey and Israel despite the Gaza flotilla incident last year is simply a matter of supply and demand. He thinks that despite political tension, business will follow its natural course. “Our policy is and has always been to work in coordination with Palestinian leaders [the late Yasser] Arafat and [Mahmoud] Abbas, as well as with Israel. The normalization of political relationships will further boost trade relationships between Turkey and Israel,” Güvendiren concluded. After the bilateral free trade agreement that lifted the customs tax on approximately 200 items between the two countries came into effect in 1997, the trade volume between Turkey and Israel almost doubled in the next two years and was followed a steady upward trend. According to data released by the Undersecretariat of Foreign Trade (DTM), trade volume between the two countries has constantly increased since the early years of the economic relations between the two nations. The trade volume of $1.3 billion in the year 2001 had nearly tripled in 2010, reaching $3.5 billion. Turkey’s exports to Israel have steadily followed an upward trend, exceeding the $2 billion mark for the first time in 2010.
In the first month of 2011, Turkish exports to Israel, reaching $166 million, marked a 20.1 percent increase over the same month in the previous year. However, imports from Israel in January 2011, compared to the same period a year earlier, fell by almost 15 percent to $77 million.
According to the DTM’s bilateral trade reports, Turkey’s main exports to Israel are land transport vehicles, construction materials, such as iron and steel products, electronic devices, textiles and accessories. In return, Turkey mainly imports crude oil, coal tar products, plastic and its derivative products, scrap metal, metal ore and organic chemical products from Israel.
According to a Foreign Economic Relations Board (DEİK) report released late in January, due to the lower cost of labor and its close proximity to both the EU and former Soviet countries, Turkey offers a unique opportunity for Israeli firms, primarily in the textile and industrial sectors. The same report also notes that the number of Israeli firms investing in Turkey is almost 200.
03 April 2011
SOURCE: TODAYS ZAMAN
