With a view to reaching $75 billion in bilateral trade, a target set by President Recep Tayyip Erdoğan and U.S. President Donald Trump in February, Turkish and American authorities are setting up a joint working up. Organized by the Turkey-U.S. Business Council (TAİK) and America-Turkish Council (ATC), the 37th Annual Conference on Turkey-U.S. Relations in Washington, D.C., last week highlighted that the two allies must expand economic partnerships to fortify their political relations, which have soured in the recent years. Trade Minister Ruhsar Pekcan said her meetings with U.S. Secretary of Commerce Wilbur Ross and Trump's senior adviser Jared Kushner were very productive. Pointing to the fact that Turkey and the U.S. are allies, Pekcan said both countries have major trade relations that carry huge potential.
Trade Minister Pekcan said that the trade volume between the two countries is currently $20.7 billion. "We will accelerate our efforts to raise the trade volume to $75 billion, as agreed by President Erdoğan and President Trump. We agreed with the U.S. secretary of commerce that there is a need to collaborate on the diversification of tradable products and a better use of the existing potential. We are forming a joint technical working group between the U.S. Department of Commerce and our Ministry of Trade, in line with the objective of increasing the trade volume between the two countries to $75 billion," she told Anadolu Agency (AA) in a statement.
According to Pekcan, industries such as aerospace, defense, automotive, steel, jewelry, clothing, carpets, machinery and parts, olive oil, ceramics, marble and cement, hold significant potential for Turkey-U.S. trade.
"We are working on programs that would increase our exports to the U.S., particularly the common trade potential report and high-tech products," she said.
From a historical perspective, early economic dialogue between Turkey and the U.S. began with the Economic and Technical Cooperation agreement signed in 1947 with a view of implementing the Truman Doctrine in the aftermath of World War II. While the strategic political and military cooperation expanded with Turkey's membership in NATO in 1952, the economic partnership grew exponentially as Turkey welcomed more American companies.
Currently, 1,853 American companies operate in Turkey's retail, e-commerce, finance, energy and technology sectors. The U.S. also ranked second in Turkey's foreign direct investors with $11.8 billion in the period of 2002 to January 2019, according to the foreign direct investment (FDI) statistics released by the Industry and Technology Ministry. It is reported that U.S. direct investment in Turkey is led by manufacturing, wholesale trade, finance and insurance.
Although overall U.S.-Turkey bilateral trade jumped from $10.8 billion in 2009 to $20.5 billion in 2018, it remains modest compared to its potential. Therefore, President Erdoğan and U.S. President Donald Trump agreed to raise the trade volume to $75 billion.
American companies invited to specialized free zones
According to the minister, the Trade Ministry aims to establish free zones, specialized in research and development (R&D)-intense, high-tech and high added-value activities.
Emphasizing that they invited American companies to invest in these zones, Pekcan said: "In our meetings, there were also U.S. investors interested in specialized free zones that the Ministry of Trade will establish. These places may be Turkish-American cooperation zones. American high-tech companies can invest in these zones either on their own or together with Turkish companies. We are ready to provide support to those who will invest in our free zones," Pekcan said.
She underlined that while continuing to make trade easier and improve the business environment, they will focus on new areas such as the digital economy in which U.S. companies are strong. Indicating that they agreed with the U.S. to carry out joint studies on the digital economy during meetings, Pekcan said that a U.S. delegation that would focus on the digital economy is set to visit Turkey next month.
During her meetings, Pekcan conveyed Turkey's request to remove additional customs duties imposed on Turkish iron and steel products by the U.S., which has long-dominated the trade agenda between the two countries; Turkey remaining in the U.S. Generalized System of Preferences and being exempt from the measures introduced in the automotive industry were also discussed.
Pekcan said they decided to make channels of dialogue like the U.S.-Turkey Business Council (TAİK) more effective under the presidency of the two ministries, expressing that the objective is to remove all barriers to trade.
She added that they will seize every opportunity to achieve a trading volume of $75 billion, balanced trade and a two-sided increase in investments, industrial products and tourism, and they will focus on all products and sectors within this scope.
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