Business world: Turkey to dodge Britain's referendum chaos

Published 26.06.2016 23:33
Updated 26.06.2016 23:35
Turkey’s second biggest export market, Britain said goodbye to the EU, recalling that Britain’s share of Turkey’s automotive exports is 10 percent
Turkey’s second biggest export market, Britain said goodbye to the EU, recalling that Britain’s share of Turkey’s automotive exports is 10 percent

Following Britain's decision to leave the EU, Turkish industrialists think the process ahead will not negatively affect their production, and they will easily overcome any potential fallout

As Turkey's second biggest export market said goodbye to the EU, the Turkish business world noted Britain would continue to be a crucial market and that they would overcome the process unharmed.

Turkey spent $61.9 billion in exports to the EU last year, with $9.2 billion going to the U.K. as the second largest market following Germany. An economic decline in the country is expected to put Turkish exporting companies in jeopardy and companies will closely monitor whether Britain will sign a Customs Union deal with the EU, in the wake of uncertainty regarding expected changes in customs taxes.

Turkey is doing business with the U.K. customs tax-free in accordance with the current Customs Union deal with the country. Industrialists are worried that the possibility of this deal being jeopardized will create problems for both countries, while the devaluation of the pound against the dollar means a decrease in industrialist income as British companies will spend less.

In a written statement on Friday, Turkish Exporters' Association (TIM) President Mehmet Büyükekşi said Brexit would have a limited effect on exports in the short-term. Automotive Exporters' Association President Orhan Sabuncu noted that there is growing concern of the incidents in Britain spreading to other countries. Stating that Turkey would enter into a new agreement if the commercial status between the EU and the U.K. were to change, Sabuncu said: "Britain's share in our automotive exports is 10 percent. This share will decrease if a customs tax hits the commerce between the two countries." The secretary general of the Small Domestic Appliances Industrialists Association (KESID) Sabri Erdil pointed out that Britain is their largest market in small domestic appliances and that they do not expect any changes regarding the Customs Union. According to Footwear Industrialists' Association (TASD) President Hüseyin Çetin, their exports will increase by 20 percent in the upcoming period.

Britain's decision to leave the EU will have a huge impact on the tourism sector. It hosted 2.5 million British tourists in 2015 and the sector's representatives think the number of British tourists will decrease if the country's economy goes through a recession over the middle and long term. Tourism officials noted that British tourists would direct their routes to Turkey if the EU decided to apply visa restrictions to British citizens. Pointing out that most Britons went to European countries since transportation was subsidized by the EU fund, Turkish Hotel Association President Timur Bayındır said, if the EU lifts this funding, the situation will be in Turkey's favor. Turkish Hoteliers' Association (TÜROFED) President Osman Ayık stressed that Britain's exit from the EU would not directly affect Turkey. The president of the Association of Turkish Travel Agencies (TÜRSAB) Başaran Ulusoy stated that Brexit would not disrupt Turkish tourism and there may be an increase in tourist numbers along with the visa decision. According to Pronto Tour Chairman Ali Onaran, if the British economy shrinks, British tourists will prefer Spain due to its proximity.

Last year, $2.2 billion of Turkey's exports to the U.K. consisted of ready-made clothing. Istanbul Textile and Apparel Exporter Associations (ITKIP) President Hikmet Tanrıverdi said: "During the first five months of 2016, our ready-made clothing exports to Britain maintained a positive graphic." United Brands Association of Turkey (BMD) President Sami Kariyo stressed that commercial relations between the two countries would not go sideways while Turkish Clothing Manufacturers' Association (TGSD) President Şeref Fayat said the U.K. is the only country Turkey had a foreign trade surplus with, making a possible exit from the Customs Union of crucial importance to the sector.

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