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Jordan and Djibouti alternatives for Egypt Ro-Ro deal

by Metin Can - Özge Yavuz

Mar 14, 2015 - 12:00 am GMT+3
by Metin Can - Özge Yavuz Mar 14, 2015 12:00 am
The Egyptian government under President Abdel-Fattah el-Sissi, who headed a bloody military coup in 2013, announced in October that it would suspend the sea and land freight transport agreements between Turkey and Egypt and Egypt and Saudi Arabia on April 24. Egypt has served as the only transition gate to the Middle East due to the ongoing conflicts in Syria and Libya, but the latest news has thrown the Turkish business sector and shipping industry, which makes billions of dollars exporting in the Middle East and Africa, into turmoil.

The agreement is renewed every three years and will end on April 23, but the suspension will cause a sudden loss of billions of dollars in exports. Government officials and industry professionals are also concerned about the upcoming phase. Mehmet Büyükekşi, chairman of the Turkish Exporters Assembly (TİM), said the suspension would do more harm than good to Egypt. "What we prioritize is the cancellation of this decision. Turkey has currently made a $2 billion investment in Egypt. There is active reciprocal trade between the two countries," he said. Büyükekşi said that Turkey is ready even for the worst-case scenario: "Turkey has made significant transportation investments in Djibouti, which is an important trading hub for Africa.

In addition, Jordan could be the next alternative," he continued. İbrahim Güler, the CEO of Hatay Ro-Ro A.Ş., said the present problem has become a crisis in the regional economy, drawing all companies into difficulties. Güler said an urgent common solution must be found. "This problem is not only about shipping companies, but it also affects exporters, the tourism industry, shop owners and even ordinary citizens. Production is reduced if export activities slow down. This is because many firms face the risk of closure," Güler reiterated, adding that more trouble might lie ahead for Turkey unless a common solution is found. "The renewal of the agreement is very important for our region's balance of trade and finance. The transportation line must be active, at any rate. Otherwise, we may lose the Middle Eastern market," he added. The Egyptian crisis has also been on the agenda of textile manufacturers in recent days. Istanbul Ready-Made Garment and Apparel Exporters' Association President Hikmet Tanrıverdi said that the announcement by the Egyptian government has been submitted to the Ministry of Finance. The closure of the transportation line will create huge difficulties for Middle Eastern exports, Tanrıverdi said. "Turkey's export market is problematic due to the financial and political environment of our neighbors. If this line is closed, then export expenditure to the Middle East will increase, and there will be delays in deliveries. We are still dealing with Turkey's loss in exports to Russia, Libya, Ukraine and Egypt," he said, adding that the suspension of the agreement will negatively affect the country. Meanwhile, Turkish Economy Minister Nihat Zeybekci stated that negotiations are continuing between Turkey and Egypt and that the problem will be solved one way or the other. However, the minister further added that if no agreement can be reached, Turkey could find other alternatives, just like it did after the trouble started in Iraq.
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