Israel to end free trade deal with Türkiye

TEL AVIV

Israel plans to terminate its free trade agreement with Türkiye in response to Ankara’s cessation of trade ties with Tel Aviv, the Israeli finance minister has announced.

In a social media post late on May 16, Bezalel Smotrich announced that his country would also impose a 100 percent tariff on other imports from Türkiye.

The Israeli Minister will soon present the proposal to the Israeli government, without specifying a timeline.

He noted that instructions have been given to the economy, finance and foreign ministries to take necessary steps to create alternatives for the Israeli economy and reduce dependence on Turkish products.

According to a survey by the Israel Manufacturers Association and an analysis, countries such as China, Eastern Europe, Greece, Germany and Taiwan were identified as potential alternatives for Israeli producers.

Initially restricting exports to Israel for certain product categories on April 9, Ankara escalated to a complete halt of trade between the two nations by May 2, vowing to continue to impose the measures until the Israeli government allows the flow of humanitarian aid to the war-torn Gaza Strip.

According to data from the Turkish Statistical Institute, Türkiye exported goods worth $5.43 billion to Israel in 2023, a decrease from $7.03 billion in 2022 and $6.36 billion in 2021.

"We had a trade volume of $9.5 billion between us. Disregarding this trade volume, we have closed this door," Turkish President Recep Tayyip Erdoğan said on May 3.

Following Ankara’s announcement, Israeli Foreign Minister Israel Katz accused Ankara of blocking Israeli imports and exports from Turkish ports and “breaking agreements.”

Numerous reports indicated that the financial fallout following the Turkish ban will soon be felt in Israel, with the cessation of basic raw materials, leading to a rise in the prices of essential goods and food.