An exodus from Russia over its invasion of Ukraine may drive American firms’ to switch to Turkey, according to U.S. officials and executives, who also see it as a unique opportunity for greater partnership between the two countries.
“Some of the U.S. companies are leaving Russia. And some have said they would shift a part of their productions to Turkey,” Jeffrey Flake, the U.S. ambassador to Ankara, said on Wednesday.
“I also think American companies should consider the Turkish market,” Flake told a meeting in the capital Ankara.
In a swift withdrawal, a wave of western companies has limited, put on hold or exited business activities in Russia following a series of sanctions imposed on Moscow after it launched its invasion of Ukraine last month.
In addition to all the challenges, the conflict has also brought along strategic opportunities for Turkey, said Myron Brilliant, executive vice president and head of the International Affairs Division at the U.S. Chamber of Commerce.
Turkey could attract some investments and trade, Brilliant noted, also praising the assistance deployed by the Turkish government and private sector to alleviate the humanitarian crisis in Ukraine.
“We need to be aware of the current situation and really focus more on this partnership. This poses an opportunity that has not previously arisen in terms of U.S.-Turkey relations,” Brilliant noted.
“I must say that this situation creates an opportunity for both the U.S. and Turkey.”
“If Turkey sets the right economic policies and continues to improve its digital and physical infrastructure, there is an opportunity for the U.S. companies to expand their presence here and deepen their investments,” he said.
The U.S. officials’ remarks came on the sidelines of a signing ceremony of a memorandum of understanding (MoU) between the Union of Chambers and Commodity Exchanges of Turkey (TOBB) and the U.S. Chamber of Commerce, as they seek to lay the ground to further boost commercial links.
Brilliant stressed the importance of Turkey’s strategic location, saying it is a center that connects to Europe, the Middle East and Central Asia.
But he also said the country needs to improve its digital framework and infrastructure and also ensure a more attractive regulatory environment for investors.
“Along with the challenges that emerged due to the Russian invasion of Ukraine, we think that there are also various opportunities that Turkey can take advantage of here.”
Flake said there would be some disruptions in trade in the near term stemming from sanctions, but stressed the need to strengthen trade and commercial links as partners and allies.
“Around 1,100 American companies were doing business in Russia. Some of them are leaving now. Some also said they would shift some of their operations to Turkey,” the ambassador noted.
“I always tell American companies that Turkey is a market they should think about for their products, services and investments.”
Stronger trade links
He dubbed this an opportunity while also drawing attention to the increasing trade links between Turkey and the U.S.
The trade volume between the two NATO allies reached $28 billion in 2021, a nearly 30% year-over-year increase.
“Of course, the increase in Turkey’s exports to the U.S. had a contribution to this. It’s very impressive. During the pandemic, Turkey’s exports to the U.S. increased by 45%,” Flake said.
The two countries aim for $100 billion in bilateral trade, a target endorsed by President Recep Tayyip Erdoğan and his American counterpart, Joe Biden.
Stressing the invasion would have a tragic outcome from both human and economic perspectives, Brilliant said despite all this, “we think that there is an opportunity to further develop our trade relations and existing partnerships.”
“We can evaluate these opportunities together. There may be new trading models, especially in the areas of digital health, energy transformation, supply chain, durability, agriculture and commodities,” he added.
“We have been investing in this country for a very long time and we will continue to do so.”
For his part, TOBB Chair Rifat Hisarcıklıoğlu stressed Turkey was an attractive regional production center, calling on the U.S. investors to evaluate the country as an investment and trade hub.
“We should increase Turkey-U.S. trade to a level befitting the two allied countries,” Hisarcıklıoğlu also said.
“I want to emphasize it again. The Turkish and U.S. business world will be able to achieve the $ 100 billion trade goal. We believe that this goal is realistic. There are serious opportunities for U.S. investors in Turkey.”
