This week the U.S.-Turkey Business Roundtable convened near the Bosporus in Istanbul. Executives from both countries met to discuss how best to grow their business relationships. The conference was headlined by former U.S Congressman and former U.S. Interior Secretary Ryan Zinke and Former Transportation Secretary and Prime Minister Binali Yildirim. Yildirim addressed the participants with a commitment to help increase bilateral trade from $19 billion annually to over $100 billion. Yildirim reiterated Turkey's unique position as America's first trading partner in the Mediterranean, with Turkey signing trade agreements with the U.S. over 200 years ago.
Hosted by "Invest in Turkey," the conference kicked off with comments from its Vice President Ahmet Burak Dağlıoğlu. Dağlıoğlu drew attention to the incredible growth in foreign direct investment to Turkey, saying: "In terms of investments, 2018 was a fruitful year for Turkey. We attracted around $13 billion in FDI last year. This is an increase of 11 percent year-on-year, where global foreign direct investment [FDI] shrank by around 20 percent."
I had a chance to speak to various executives at the conference and the sentiment was very positive. The current levels of trade are an underachievement at best especially as the U.S. is now the world's largest energy producer. Speaking on this point, energy expert Kadri Kaleli remarked: "The U.S. oil and gas industry, now the largest in the world, is seeking opportunities not only in terms of exporting liquefied natural gas [LNG] and light oil, but joint ventures and strategic partnerships in the Black Sea and Mediterranean. These include onshore exploration and production as well as midstream, downstream and petrochemical opportunities." He went on to add that, "The presence of U.S. oil companies is encouraging as the secular growth in the energy consumption in Turkey in the last 15 years has not gone unnoticed. Diesel consumption in Turkey is still in a growth phase despite economic growth being perceived as sluggish." Should the world reenter a period of inexpensive financing, as it appears to be doing, this growth will only accelerate and along with it demand.
One of the participants in the conference, Capt. Suat Dincelek of Istanbul 34, is pleased with the results. Dincelek says his firm was motivated to invest in Houston by expanding his operations there following a meeting with Zinke in April in Washington. Dincelek went on to say: "I was surprised to learn of the sharp drop in Turkish steel, cement and boron exports to the port of Houston in the last year. Now with the Trump administration's lower steel tariffs, there's an opportunity to increase exports and invest in Houston."
Another conference attendee Gokhan Alpman, managing partner of Eurasia Invest, was also pleased with the results of the conference. It was a great opportunity to meet with U.S. investors from various industries. Also, the desire of U.S. investors to invest in various opportunities in Turkey was a good sign of the long-term sustainable relationship between Turkey and the U.S."
The sectors that will most benefit from this conference appear to be shipbuilding and LNG. Turkey is a shipbuilding powerhouse, and the U.S. has a major surplus of LNG currently being wasted with the practice of flaring, essentially burning off gas that can't be stored. Turkey's ability to build specialized LNG carrying ships for the LNG exporters in the U.S. may be an opportunity for both countries, promoting high-paying jobs in both countries and helping to decrease energy prices for consumers in Turkey.
After having attended the conference it appears that both countries and their respective chambers of commerce are focusing on the growing positive investment climate in both countries and potential for increased trade.