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| The Grand Turk | |||||||||
| Israeli PM Katz calls not to give in: Erdogan declares a trade war on Israel | |||||||||
| 2024-05-17 | |||||||||
| Direct Translation via Google Translate. Edited. by Dmitry Polyakov [REGNUM] At the beginning of May this year, the Turkish Ministry of Trade announced the suspension of trade relations with Israel. The decision is the second stage of the policy of economic pressure on the Jewish state - earlier in April, Ankara introduced restrictions on the export of 54 groups of goods. However, these measures did not lead to any results. Therefore, this time the Republic of Turkey decided to toughen its course. An official statement from the Ministry of Commerce said that “ export-import transactions related to Israel have been stopped, the decision applies to all types of goods. Turkey will strictly and resolutely implement these measures until the Israeli government allows a continuous and sufficient flow of humanitarian aid into Gaza." Meanwhile, the ministry clarified that it has already begun to work with colleagues from the Palestinian Authority to ensure that the measures taken do not affect the population of the West Bank. This is because Türkiye exported goods to the Palestinian territories through Israeli customs.
Since the spring of this year, Ankara has decided to raise rates.
Therefore, measures aimed at restricting trade are in line with Turkey’s course towards a consistent weakening of ties with the Jewish state. THE ROLE OF ELECTIONS In this context, it is important to trace the chronology of Turkey’s actions - precisely from April 2024. Turkish authorities began to put pressure on Israel after the failure of the ruling Justice and Development Party (AKP) in municipal elections in all major cities in March this year. In addition, in the districts of Sanliurfa and Yozga (considered the main electoral centers of the AKP), the New Welfare Party (NPP), which takes a tougher stance against Gaza, won. In previous years, Erdogan’s image as a protector of Muslims in the region added some support for the ruling party in elections, which made it possible to mobilize the conservative electorate to vote for the AKP. However, since the new stage of the Palestinian-Israeli confrontation, the current president has been losing political points. Today, Turkish society actively criticizes the authorities for maintaining trade ties with Israel. Therefore, Erdogan was forced to act and began a policy of pressure.
The decline began even before the COVID-19 pandemic. Formally, in 2023, the country's economy grew by 4.5%. In reality, this came at a rather high cost—the price was a currency crisis. The lira has lost nearly half its value in five years, leading to hyperinflation that reached nearly 70% in May. The weak currency has caused prices for manufactured goods to rise, with the manufacturing sector, which accounts for a fifth of the country's GDP, hit hardest.
It was against this background that Erdogan decided to suspend trade ties with Israel, one of Turkey’s key trade and economic partners in the region. Is it a long term solution? Indeed, trade and economics are the basis of Turkish-Israeli relations. The free trade agreement between the parties has been in force since 1997. In 2023, Ankara was the fifth-largest exporter to the Jewish State, with exports reaching $4.6 billion—about 76% percent of total bilateral trade, which stood at $6.3 billion. Given the existing trade imbalance, the greatest harm from the measures taken will not be Israel, but Türkiye itself. In order to have at least some impact, Ankara decided to limit access to Turkish ports, through which the Jewish state also traded with third countries. For example, Azerbaijani oil comes to Israel through the Mediterranean port of Ceyhan. Realizing that local businesses would suffer from the sudden stop in trade, the Turkish Ministry of Trade granted a three-month grace period to exporters to Israel. The ministerial directive states that companies must complete contract transactions through third countries. It is noteworthy that the released document became a reason for speculation. In Israel they immediately started talking about the fact that Türkiye had lifted many trade restrictions. Foreign Minister Israel Katz made a statement with the following content: “The lesson is clear: we must not give in to the dictator’s threats.” This suggests that the country did not feel the consequences of the suspension of trade, and the postponement for Turkish companies is regarded as a victory in this confrontation. As a result, it is not the Israeli economy that suffers from Ankara’s policies, but the Turkish one.
Given the existing problems in the Turkish economy, the trade ban may remain at the formal level, but export companies will receive various concessions to conduct their activities.
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| Posted by:badanov |