After nearly two years of tension, Turkey and Germany have recently taken steps to ameliorate ties and capitalize on mutual gains by reinforcing political and economic rapport. The invitation of German President Frank Walter Steinmeier to President Recep Tayyip Erdoğan has been regarded as a crucial step to remedy the strained ties. The visit is the president's first official state visit in Turkey's new era of presidential governance. This particular aspect of President Erdoğan's visit demonstrates the importance Turkey attributes to its ties with Germany. During his three-day visit, the president is also being accompanied by a large delegation of businesspeople.
Therefore, the Berlin visit is also expected to upgrade bilateral economic relations. Following the political meetings, Erdoğan is scheduled to meet with CEOs of leading German firms. In an atmosphere swayed by trade tensions due to the protectionist stance of U.S. President Donald Trump's policies as well as political conflicts and wars on a global scale, Turkey and Germany are encouraged to institute closer cooperation to unclog the deadlock in political and economic crises. Ahead of his arrival in Berlin yesterday, President Recep Tayyip Erdoğan penned an article for the German daily Frankfurter Allgemeine Zeitung (FAZ), in which he stressed that Germany and Turkey are opening up a new page in bilateral relations and putting aside disagreements to focus on common interests, which is crucial for both sides with the recent dramatic global events.
"We are committed to continuing our relationship in a rational way based on mutual interests. Let us focus on our common interests, shared challenges and common threats. In doing so, we should always keep open all channels of dialogue and exchange. In case of disagreement, we should understand our mutual sensitivities with the utmost empathy," President Erdoğan wrote in Germany daily FAZ.
In a particular reference to the U.S. government's unilateral policies that have led to global trade conflicts, the president underscored that it was a necessity for Turkey and Germany to stand together with other states and protect their common commercial interests.
"Germany, as a global trading state, and Turkey, which is taking an export-oriented growth model for its economy, are jointly urged to join forces together with other responsible states to launch multi-perspective steps in order to prevent such destructive trade conflicts," he stressed.
Referring to potential areas of economic cooperation between Turkey and Germany, Erdoğan said tourism, renewable energy, infrastructure and the automotive sector offer a wide area of cooperation and highlighted Turkey's massive efforts to boost power generation from domestic sources while making significant contributions to the fight against climate change.
The German energy giant Siemens, together with its two Turkish partners, was awarded the contract for a 1,000 megawatt onshore wind power plant project in a tender organized by the Energy and Natural Resources Ministry last year in August.
In a bid to stress the importance of Turkish-German ties, Foreign Economic Relations Board (DEİK) Turkey-Germany Business Council Chairman Steven Young, who is also the president of Bosch Turkey and Middle East, said both countries are valuable strategic partners. "DEİK and the Association of German Chambers of Industry and Commerce (DIHK) in Turkey are working to lead efforts to improve bilateral economic relations. "I believe that the meeting in Berlin will provide a platform to reinforce cooperation," Young said, emphasizing the significance of the Berlin visit for economic ties.
Independent Industrialists and Businessmen Association (MÜSİAD) Europe Director Burhan Sağlam stressed that the number of German companies operating in Turkey and that of the companies in Germany that belong to Turkish entrepreneurs demonstrate how developed Turkish-German economic ties are.
"We are at the dawn of an era in which tensions have been left behind and both countries are looking to increase mutual gains. We hope that President Erdoğan's meeting with German Chancellor Merkel and President Steinmeier will give momentum to bilateral economic ties," Sağlam said.
About 80,000 Turkish-German businesses operate in Germany with an annual turnover of approximately 52 billion euros ($60.78 billion), while employing almost 500,000 people in 50 different sectors.
According to Trade Ministry data, 7,227 German firms operated in Turkey as of the end of April and Germany tops the list of companies with foreign capital in Turkey.
Turkey is Germany's 17th largest trade partner
Europe's largest economy, Germany, recorded $1.2 trillion in exports and $1.3 trillion in imports.
Germany is the top destination for Turkish exports, making it Turkey's biggest trading partner.
Bilateral trade between Turkey and Germany in 2016 totaled $35 billion. Turkey's exports to Germany amounted to $13.9 billion, while imports were $21.4 billion. Bilateral trade between the countries increased, reaching $36.4 billion in 2017, according to data compiled by the Turkish Statistical Institute (TurkStat). Turkey ranked 17th among Germany's 239 trade partners.
Last year, Turkish exports to Germany rose to $15.1 billion and imports from Germany fell slightly to $21.3 billion.
During the January-August period this year, Turkey's exports to Germany rose to $10.4 billion, a 9 percent increase compared to the same period last year.
In particular, Turkey's exports to Germany consist of road vehicles, parts and accessories for motor vehicles and parts for piston engines, while the main imports from Germany are road vehicles, medicaments and parts and accessories for motor vehicles.
For the period from 2002 to April 2018, direct investments from Germany to Turkey amounted to $9.2 billion. This figure is $2.2 billion from Turkey to Germany in the same period.
Foreign Direct Investment (FDI) from Germany, which generally invests in the energy, insurance and manufacturing sectors, is at least 6.2 percent of total FDI in Turkey.
Meanwhile, more than 3.5 million German tourists visited Turkey in 2017.
German economy minister to visit Turkey in October
Germany Economy and Energy Minister Peter Altmaier is scheduled to pay a visit to Turkey on Oct. 25-26. During his visit, he will be accompanied by 86 German businesspeople. As part of the visit, the first Joint Economic and Trade Commission (JETCO) meeting will be held.
During the JETCO meeting, a forum evaluating Turkish-German economic relations and investments will be held. German companies investing and operating in Turkey will explain the opportunities in the country to new potential investors.
