In the intricate tapestry of global trade, the fabric representing Türkiye-US bilateral ties reveals an enormous potential that remains largely unexplored. Currently, the trade statistics between these two nations, while robust, don’t scratch the surface of what’s possible. Bilateral trade volume exceeded 32 billion last year – Türkiye exported 16.9 billion while the US did 15.2billion.
Imagine a world where this trade surges three-fold within just three years. Sounds audacious? Absolutely. Achievable? Let’s dissect the challenges and drivers.
Tariff and Non-tariff Barriers:
It’s not just about numbers. Tariffs, quotas, and licenses as the legacy of Trump administration have long stifled the full bloom of trade. The labyrinth of import restrictions, while designed to protect local industries, can be detrimental to free-flowing commerce. As the US is headed to a bitter, high-tension presidential elections next year with Trump as a strong contender, populism may prevail.
Political Tensions and Trust Deficit:
Let’s face it: political disagreements from the past linger, casting shadows on current collaborations. This trust deficit can be a significant roadblock.
Ankara’s friends with benefits foreign diplomacy to pursue own interests in the region by balancing the US against China and Russia has grown two NATO partners apart. Ankara has yet to ratify Sweeden’s NATO membership in exchange for Senate’s approval of 20 billion F16 sale.
Parties have a long list of long-standing issues that can now only be addressed should they overlap.
Think of two dance partners following different beats. The diverging product standards and regulatory measures in both countries make synchronization challenging. Ankara’s pursuit of forced localization in the pharma sector to lose enforcement of Eu’s intellectual property legislation has been a challenge.
Currency Volatility and Economic Instabilities:
The roller-coaster ride of the Turkish Lira against the US Dollar, coupled with respective macroeconomic hurdles, presents a turbulent backdrop to the trade canvas.
The single biggest risk factor we encounter when discussing Türkiye with potential investments is macroeconomic instability where only a year ago Türkiye was taking interest rates down to 8.5% to combat a historic inflation rate of over 100%. A new cabinet of ministers with competent, seasoned members are shifting the economy toward more conventional policymaking but sovereign governance risks remain in the wake of local elections in March.
Infrastructure and Logistics Challenges:
A chain is only as strong as its weakest link. Transportation inefficiencies, compounded by port and customs delays, can seriously throttle trade momentum.
Weaponization of Dollar and SWIFT:
The US has pursued economic sanctions as foreign policy tool against even own partners such as Türkiye. All its traditional regional partners in the Mideast – Israel, Egypt, KSA, UAE and Türkiye have been aggressively hedging the future of bilateral relations.
Cultural and Business Norm Differences:
Business isn’t just about numbers; it’s about people. The unique etiquette and distinct consumer tastes in both nations can sometimes be more of a barrier than a bridge.
Turks feel closer to home in Europe than the US. Several challenges remain from English speaking to basic understanding of local laws, financial systems and business norms.
Trade Agreements and Partnerships:
Potential FTAs or PTAs are like trade adrenaline, boosting the flow of goods and investments. It’s high time for both nations to pen such growth-inducing scripts.
The most effective way to ensure stable commercial relationships is to pursue FTAs. While next year’s presidential elections in the US could make this challenging, Ankara needs to make it a high priority.
Strategic Sectoral Collaborations:
From tech to textiles, avenues for symbiotic growth are everywhere. It’s about identifying the intersections of interest and capitalizing on them.
Turks think trade while Americans think business development. Given the market characteristics of the US market, parties should agree upon a short list of sectors to collaborate on and deepen the trade volume. Our initial candidates include renewables and electric vehicles.
Infrastructure Development and Investment:
Trade travels on the rails of robust infrastructure. By ramping up transport links and upgrading ports, both countries can turbocharge their trade vehicle.
Turkish cement makers purchasing ports in the US or building a new dedicated local terminal for US LNG imports will help a great deal.
Fostering Cultural and Business Exchanges:
Building bridges isn’t just about concrete and steel; it’s about understanding and empathy. Exchange programs and joint business fairs can be the glue binding trade aspirations.
We observe too many Turkish associations, think tanks, groups pursuing own agenda, messaging and advocacy capacity in Washington DC. Every year a large delegation of businesspeople, politicians and diplomats parachute in NYC and DC, have meet-and-greet visits, organize gala dinners with the majority of the attendees are folks flying in from Türkiye.
Easing Regulatory Procedures:
Red tape is the antithesis of brisk business. Streamlined procedures, coupled with mutual recognition of standards, can pave the way for smoother trade operations.
Unpredictable lawmaking via overnight decrees and omnibus bills in Türkiye has created major uncertainty and burden on foreign investors. The periodic threat of economic sanctions on Türkiye has scared new and add-on investments from US businesses.
Promoting Investments and Joint Ventures:
Shared endeavors foster mutual growth. By seeding joint ventures and incentivizing investments, both nations can weave a richer trade narrative.
Any Turkish groups like Koç or Sabancı with long standing US partners have a major role to play here by helping seed the next set of JVs among medium to small size companies from Türkiye and the US.
Policy Interventions:
Both Ankara and Washington need to don the caps of trade visionaries, sculpting policies that elevate bilateral trade to new zeniths.
Business Strategies:
From tapping into niche markets to leveraging tech innovations, businesses on both sides should reimagine their trade game plans.
Community and Public Engagement:
The heart of trade beats in its people. Public support and community buy-in can supercharge trade endeavors.
Technology and Innovation as Catalysts:
In today’s digital era, technology is the magic wand turning trade hurdles into highways.
We do believe entrepreneurs form both countries can significantly contribute to bilateral economic relations between the US and Türkiye as we have seen it from Israel.
Trade is more than a transaction; it’s a relationship. By addressing barriers and harnessing enablers, Türkiye and the US can redefine their economic partnership. A three-fold increase in three years isn’t just a number—it’s a statement.
It’s time to roll up our sleeves and make this vision a vibrant reality.
