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February 17, 2015

Turkey’s inclusion in TTIP will bolster exports, leading Turkish-American businessman says

Turkey’s exports to the U.S. have been constantly increasing for the last five years. Recent data showed on Friday that Turkey’s market share in the U.S. at least, increased 12 percent and broke through the $6 billion barrier for the first time. İbrahim Uyar, Executive Director of a D.C.-based business association, MUSIAD USA, said that the inclusion of Turkey in the Transatlantic Trade and Investment Partnership would increase exports to the U.S. and help to create a more balanced trade in favor of Turkey. Uyar himself is a Turkish-American businessman, owning a successful Maryland-based firm “NT Recycling,” and has been living in D.C. for more than seven years. He is one of a small group of professionals who can see both the political and business dimensions of Turkish-American trade relations.

Daily Sabah: How do you interpret the latest substantial increase in Turkish exports to the United States?

İbrahim Uyar: Numbers are promising, but the bilateral economic relations of the two countries are not at the level they should be. When we examine the numbers closely, we will see that the Turkish export market in the U.S. presents a highly diverse product portfolio consisting of many large and small shares.

This portfolio consists of motor vehicles, machinery, iron-steel, stone-cement, aeronautics, carpets, textiles, tobacco, firearms, mineral-fuels-oils, animal and vegetable fats, oil, confectionery, and paper.

According to the Turkish Statistical Institute (Turk Stat), motor vehicles and machinery hold the lion share of the U.S. market, with shares of 11 percent and 9 percent, followed by the iron and steel sector with 8 percent. The remaining groups mentioned above are seen to be around between two and 5 percent.

One of the biggest problems is the anti-dumping investigations in the steel industry. As you know, local producers thought that foreign exporter firms were being supported by their governments via export subsidies. That is why the International Trade Commission (USITC) decided to impose anti-dumping duties on Turkish steel pipes following an investigation into export prices. When we examine the old reports, we can see that the tariff applied by the U.S. on Turkish steel was in effect for over 10 years from 1997 to 2008. After a detailed investigation, the International Trade Commission ruled that exports from Turkey would not harm local U.S. producers, so it removed the tariff. We believe that the U.S. authorities will be just as careful in this case and make a correct and fair decision.

D.S.: Do you think the Framework for Strategic Economic & Commercial signed by President Obama and the-then PM Erdogan in 2009 helped to achieve this increasing balance in favor of Turkey?

Uyar: I believe that the FSECC signed by the-then PM Erdogan and President Obama led to the increase in export numbers for Turkey after the FSECC, U.S. and the Turkish trade delegations began travelling with their officials to each other’s countries with the aim of improving trade relations. Let’s give a couple of examples, in 2014 Sikorsky announced a major 30-year co-production partnership for the Turkish Utility Helicopter Program, worth up to $8 billion over its life cycle. Boeing continues its strategic partnership with Turkish Airlines, which now flies to more countries than any airline in the world. Pratt and Whitney opened a new engine parts facility in Izmir that will supply the Joint Strike Fighter, in which Turkey has partnered. General Electric announced a $900 million investment in Turkey across several of its business lines. American firms are pursuing energy, aerospace, defense and health care projects throughout the country. Since 2011, over 50 American firms, mostly small and medium-size companies have brought their campaigns to the Turkish market through the U.S. Department of Commerce Executive-Led Trade Missions. Turkey sends more students to the U.S. than any other country in Europe, and two-way tourism is vibrant.

MUSIAD USA supports these kinds of economic activities between the U.S. and Turkey by collaborating with Turkish and American Business Organizations to organize events which bring importer and exporter together. Thanks to FSECC, there has been much progress.

D.S.: What should Turkey do to increase Turkish exports to the U.S. even further?

Uyar: To add to the progress already made, Turkey should not only rely on the government’s efforts, but also the private sector. Partnerships with private sectors are what encourage more relationships between American and Turkish businessmen leading to a growth in exports. Turkey should look into investment opportunities in each state in the U.S. Every state in the U.S could offer a specific business opportunity and investment for Turkey, therefore contributing to the partnership with the U.S as a whole rather than to just one side. Sister City Programs with the 50 states in the U.S need to be established, linking local governments and strengthening economic, trade and business partnerships.

More businessmen from Turkey and the U.S. need to come together to discuss possible investments and opportunities. There should be business trips held for the businessmen of Turkey and the U.S. to come together and have meetings to discuss these investments in cities such as: Washington D.C., New York, Chicago, Dallas, Los Angeles…

D.S.: Do you think possible inclusion of Turkey in the TTIP would increase Turkish exports to the U.S. or decrease Turkey’s competitiveness in this market?

Uyar: The inclusion of Turkey, as a transatlantic ally and a loyal member of NATO since 1952 in the Transatlantic Trade and Investment Partnership (TTIP) could increase exports to the U.S. The TTIP is a Free Trade Agreement between the U.S. and EU the goal to increase trade. The TTIP could end up causing some trade deflection, trade diversion and welfare loss for Turkey because of its position with the Customs Union (CU). An FTA with the U.S could allow Turkey to follow the guidelines and obligations of the Customs Union, but also counteract the negative effects it could cause. A potential FTA negotiation would put Turkey in a position to be able to reap the benefits of trade with the U.S. and therefore increase exports and relations with the U.S. If Turkey is able to negotiate this, it would be an ideal compromise and hopefully lead to the continuing progress we have seen and hopefully even further progress.

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