TURKEY SEEKS TO INCREASE TRADE WITH LATIN AMERICA

Publication: Eurasia Daily Monitor Volume: 5 Issue: 77

Until a decade ago, Turkey’s interest in the Western hemisphere was focused almost exclusively on its relationship with the United States. Over the past 10 years, however, Ankara has grown increasingly interested in Central and Latin America, even though its trade with the region is currently less than 1 percent of its total foreign trade volume (Today’s Zaman, April 22). Turkey’s exports to Mexico stand at $135 million, Panama $40 million, Argentina $35 million and Venezuela $32 million. Turkish imports from Mexico are worth $185 million, Panama $40 million, Argentina $221 million and Venezuela $62 million. Turkish trade with Latin America rose from $600 million in 1995 to $2.2 billion a decade later

Interestingly, according to recently released Turkish Labor Ministry statistics on Turkish workers abroad, there is no significant Turkish labor force present in any Central or Latin American nation, despite the figures showing that by the end of 2006 nearly 1.2 million Turks worked abroad (Anadolu Ajansi, April 8).

As an indication of Ankara’s growing interest in Latin America’s largest economy, the Brazilian-Turkish Business Council was founded in January 2006 under Turkey’s Foreign Economic Relations Board (DEIK). The same month Foreign Minister Abdullah Gul accompanied by a large retinue, including Ministry of Foreign Trade representatives, MPs and businessmen, visited Brazil.

Later that year The Prime Minister’s Office Permanent Under Secretariat for Foreign Trade General Directorate issued “Turkey’s Trade Development Strategy Towards the Americas,” which outlined the government’s “Trade Enhancement Strategy” towards not only the U.S. but Latin America as well. The document noted, “Through the Latin America Strategy we aim at increasing our exports to $3-4 billion in 5 years time and ensure a sustainable presence in the region, including contracting services and investments” (http://www.dtm.gov.tr).

The interest was reciprocated: Last year Turkey and its vibrant economy began to attract the interest of Brazil’s Federal Council of Economics (COFECON). A delegation led by COFECON President Synesio Batista da Costa undertook a 10-day trip to Turkey for high-level meetings in Istanbul and Ankara with government officials, industrialists, and Central Bank officials. The Brazilian government saw its outreach efforts towards Turkey as part of its larger policy towards the “New Eleven,” a group of 11 countries, which, in addition to Turkey, includes Vietnam, South Korea, Egypt and Thailand. The delegation was under the official sponsorship of Brazil’s Ministry of Foreign Relations, and delegates received staff support from the Brazilian embassy in Ankara (Conselho Federal de Economia, January 29, 2007). Among the economic factors the Brazilians discussed with their Turkish counterparts was inflation, a problem at the time afflicting both nations’ economies.

In 2007 bilateral Turkish-Brazilian trade was worth approximately $900 million; in a lopsided trade imbalance greatly favoring Brazil. Latin America’s largest economy exported $800 million worth of goods and services to Turkey while buying only $100 million (Conselho Federal de Economia, April 20, 2007). Turkey is pressing to deepen its trade ties with Brazil; according to Foreign Trade Undersecretary Tuncer Kayalar. “We will organize a joint economic committee meeting with Brazil in May,” he said (Anadolu Ajansi, April 21).

Mexico, currently Turkey’s second-largest Latin American trading partner, offers many advantages to Turkey, not least its geographic proximity to the U.S. Mexico’s economy is now the world’s 13th largest; and the country’s 110 million citizens, propelled by record-high energy prices, now have Latin America’s highest per capita income (World Development Indicators Database, World Bank, 11 April). Wall Street is betting on Mexico’s future prosperity; in studying the world’s largest and emerging economies. Goldman Sachs predicts that in 2050 the globe’s most prosperous nations will be China, the U.S., India, Japan, Brazil and Mexico, respectively (Global Economics Paper, No. 134, December 1, 2005). Another report two years later from the accounting firm Grant Thornton included Turkey along with Mexico, Indonesia and Pakistan in the “next generation” of emerging markets with the ability to rival or even overtake some of the “BRIC” developing economies (International Business Report, supplement, Grant Thornton, May 1, 2007).

Besides bilateral trade, several years ago Mexico showed solidarity with Turkey over commercial issues. In early March 2004 the American Textile Manufacturers Institute (ATMI), the American Manufacturing Trade Action Coalition (AMTAC) and the Istanbul Textile and Apparel Exporters Association (ITKIB) drafted a memorandum to the World Trade Organization urging it to reconsider phasing out textile quotas, as precipitous action would only hasten China’s domination of the global textiles market, urging that quota phase-out be extended until December 31, 2007, rather than implemented on January 1, 2005 under the WTO Agreement on Textiles and Clothing (ATC). ATMI, AMTAC and ITKIB signed the “Istanbul Declaration” on March 4; the next day the Mexican National Chamber of Textile Industry (CANAINTEX) added its endorsement (Hong Kong Trade Development Council, March 25, 2004).

Ankara has not limited its interest to Mexico and Brazil. In its efforts to improve bilateral economic relations, Turkey has been busily holding joint economic commission meetings as well as negotiating or signing Economic and Commercial Cooperation Agreements with Argentina, Bolivia, Costa Rica, Jamaica, the Dominican Republic, Paraguay, Guyana, Chile, Colombia, Venezuela, Guatemala, Ecuador, El Salvador, Honduras, Nicaragua, Panama and Peru.

Peru in particular reciprocates Ankara’s interest in bolstering trade links. Earlier this month Peru’s Deputy Foreign Minister Gonzalo Gutierrez Reinel said during a discussion on the forthcoming fifth Summit of Heads of State and Governments of the European Union, Latin America and the Caribbean (EU-LAC), “We have an interest in developing a commercial relationship with Turkey, a country of enormous industrial potential, and the Turks also very are interested in us. It is possible that before the summit the Turkish Prime Minister will visit Peru” (El Commercial, April 5).

While Washington can hardly be threatened by its stalwart NATO ally’s interest in its southern neighbors, the fact that Turkey held a joint economic commission meeting with Cuba and includes it in its “Trade Enhancement Strategy” is likely to annoy the U.S. administration, which has boycotted the island since February 1962.

Worse, Turkish Energy and Natural Resources Minister Hilmi Guler said last month after meeting Cuba’s Minister of Foreign Investments and Economic Cooperation Marta Lomas Morales that the country’s national petroleum company, Turkiye Petrolleri Anonim Ortakligi (TPAO), ” is eager to join natural gas and oil exploration tenders in Venezuela, Colombia, Mexico and Ecuador,” adding, “We may cooperate with Cuba in oil and natural gas exploration. Turkey will set up a technical team to deal with joint energy projects with Cuba and it will visit Cuba in the coming days” (Anadolu Ajansi, March 25).

If Washington is going to have sleepless nights over Muslims south of the Rio Grande, at least they come from a democratic, secularist free-market NATO ally, and even if they show some inclination to import rum and cigars, they seem unlikely to become a stalking horse for a Communist bridgehead in the Middle East, much less covert importers of radicalism to the Caribbean. Turkish textile exporters, along with their Mexican companeros, seem to feel that the real enemy is China rather than Uncle Sam.