Bilateral relations with UAE, Egypt, Israel, Saudi Arabia and Armenia to be heart of new economic era
With its new economic strategy, Turkiye is opening the door to cooperation in foreign trade with the United Arab Emirates, Egypt, Israel, Saudi Arabia and Armenia, marking a new era that is expected to have a positive impact on bilateral trade.
New economic agreements are expected to be signed during high-level contacts between Turkiye and these countries in February and the ensuing months.
Turkish President Recep Tayyip Erdogan previously said that his Israeli counterpart Isaac Herzog is expected to visit Turkiye in February and that it could usher in a new era in bilateral relations.
Erdogan is expected to visit the UAE in February.
Noting that there has been good momentum in Turkiye’s relations with the Gulf countries recently, Erdogan drew attention to the fact that the new dynamics emerging in the region played an important role in this.
Erdogan is also expected to pay a visit to Saudi Arabia in the coming months.
In addition, an embargo imposed by Saudi Arabia on Turkish products may be lifted in the near future.
Regarding Armenia, the first flight between the two countries was planned to take place on Feb. 2 after Armenian and Turkish authorities made mutual calls to improve relations.
While diplomatic relations with Egypt have been mutually maintained at the chargé d’affaires level since 2013, official contacts were held last year.
Egyptian businesspeople visited Turkiye at the end of last month to strengthen commercial relations and mutual expectations and possible steps were discussed during the meeting.
Trade with Egypt reaches highest value
According to data from the Turkish Statistical Institute, recent developments with these countries have also had a positive effect on bilateral trade.
Turkiye’s diplomatic relations with Egypt came to a standstill after the 2013 military coup in the country.
The developments had an impact on bilateral trade, and a fluctuating course was observed in the trade volume over the years.
While the foreign trade volume of Turkiye and Egypt totaled $4.8 billion in 2013, it reached its highest level at $6.1 billion last year, $4 billion of which consisted of exports while $2.1 billion comprised imports.
Foreign trade with UAE and Saudi Arabia
Relations with the UAE and Saudi Arabia were strained after the coup attempt in Turkiye on July 15, 2016.
The murder of journalist Jamal Khashoggi in 2018 heightened tensions with Saudi Arabia.
Foreign trade volume between Turkiye and the UAE reached its highest level in 2017 at $14.7 billion.
Last year, mutual official visits were made between the two countries after a long time.
While Turkiye exported $5.2 billion worth of goods to the UAE last year, it bought $2.4 billion of products from the country.
The trade volume between Turkiye and Saudi Arabia was around $5.6 billion in 2015 before the diplomatic problems.
With the embargo decision of Saudi Arabia on Turkish products in the last quarter of 2020, there was a significant decrease in exports to the country.
While Turkiye sold approximately $2.4 billion worth of products to Saudi Arabia in 2020, the figure fell to $215.1 million last year.
Bilateral trade volume in 2021 amounted to $3.5 billion.
Bilateral trade with Israel
Tensions in Turkiye’s relations with Israel, which rose with the Israeli attack on the Mavi Marmara ship in 2010, were also affected by the Israeli-Palestinian conflict.
From 2010-2021, the trade volume between the two countries continued to increase in general, rising from $3.4 billion in 2010 to $8.1 billion in 2021, breaking a record.
Last year, approximately $6.1 billion worth of products were sold to Israel, while $1.9 billion worth of products were purchased from the country.
In the final months of 2021, high-level phone conversations were held between Turkiye and Israel.
Trade with Armenia limited
The doors of a new era are also opening in relations between Turkiye and Armenia.
With the occupation of Azerbaijan’s lands in the Karabakh region after the country’s independence, direct trade between Turkiye and Armenia was ended, the border between the two countries was closed, and land, rail and air links were cut off.
The trade volume between the two countries remained around the level of $15.3 million in the 2012-2021 period.
While exports to the country were at a very limited level, approximately $15 million worth of products were purchased from Armenia in the period.
Normalization to contribute positively to Turkiye’s foreign trade
Middle East Specialist Haydar Oruc told Anadolu Agency that the recent progress in diplomacy with Egypt, Israel, the UAE and Saudi Arabia will also reflect on bilateral economic relations in the future.
Noting that the export figures will increase in case of normalization, Oruc said that thanks to the energy agreements to be concluded with Egypt and Israel, a diversity of energy sources will be provided and the sale of energy resources from these countries to third countries will be profitable.
Egypt important alternative for LNG imports
Oruc said Egypt is a promising market for Turkiye with its population of over 100 million.
Pointing out that the natural gas that Egypt extracts from the Eastern Mediterranean can also be a new source of supply for Turkiye, Oruc said Egypt will be an important alternative for LNG imports due to its geographical proximity.
When Egypt’s recent defense industry purchases are also taken into account, it is clear that Turkiye will be a good market in this area, where it is on the rise, he added.
Oruc pointed out that Turkiye’s commercial relations with Israel are progressing independently of politics, saying that if an agreement is reached, a significant volume can be achieved in tourism, health, agriculture, natural mines and other intermediate products.
Saying that commercial relations were not affected much by tensions with the UAE, he said the country is also closely interested in the defense industry and some retail and technology companies in Turkiye.
The normalization process that Turkiye started with Egypt, Israel, the UAE and Saudi Arabia will have economic benefits as well as political ones, he underlined.
“There is no doubt that Turkiye’s existing customer portfolios in these countries will increase beyond their previous level after the removal of political obstacles,” he said.
Trade with Armenia to have impact on border cities
Prof. Kutay Karaca from Istanbul Aydin University also evaluated the impact of the dialogue with Armenia on economic relations.
Pointing out that Armenia’s economy is dependent on Russia, Karaca said: “If Armenia wants to get rid of these economic conditions and increase its welfare level, there are two countries that it has to turn to. These are Turkiye and Azerbaijan, which make up 85% of its land borders.”
Noting that there are many Turkish goods being sold in Armenia, Karaca said that although the country wanted to boycott Turkish goods during the war,these goods entered via Iran and Georgia.
Opening the borders will also enable Armenia to have an impact on the trade and energy resources routes from Central Asia and to gain profits, he said.
“Maybe it will reduce its dependence on Russia. Armenia is not a country that can directly affect the Turkish economy, but at least it will have an impact on our border cities.”