Trade now the driving force in ties between US, Turkey

BARÇIN YİNANÇ ISTANBUL – Hürriyet Daily News

Rather than joining US-EU free trade talks, it would be better for Ankara to engage in separate trade negotiations with Washington so that it can tailor any pact to its needs, says Zeynep Dereli (L). HÜRRİYET photos, Levent KULU

Ankara and Washington might not always see eye to eye politically, but the countries’ trade relations represent an opportunity to cement ties between the distant allies, according to a businesswoman working to bring the Unites States and Turkey closer in terms of trade.

“Turkey is now realizing that business diplomacy is the real driver of political decisions – that is why businesses shouldn’t be affected by the political issues and businesses should always be decided upon by the people,” said Zeynep Dereli of the Turkish American Business Association.

Let’s start with an overview of how you see the current state of affairs in Turkish-American trade relations.

Trade relations have been improving. The number of American companies that are working in Turkey, that are using Turkey as a hub for the rest of the region, are increasing. But they are currently not at the state that they should be. For years, there have been many reasons for the lack of trade. One of them is of course the geographical distance. Both countries, Turkey and the United States, have their natural trading partners in their vicinity. But with increased global trade and the patterns that we see in the business world, we realize now that all companies need to be able to function all across [the world]. The request that we get from business leaders is that they want to see global access. This global access means that you need to start increasing the trade for Turkish companies in the U.S. and for U.S. companies to trade with Turkey.

A study that was conducted in 2012 by the Turkish Industry and Business Association (TÜSİAD) and the American Chamber, actually suggested that there has been a loss of momentum.

I don’t think there is a loss of momentum. I think the momentum is more increased, right now. Now the U.S. is in better shape and is coming out stronger from the recession. There are more Turkish companies that are investing in the U.S. We can give two examples. Borusan recently bought a factory in the U.S. while Eczacıbaşı also made a huge investment in the U.S. These companies are game-setters. Sometimes you need the role models for other companies to follow suit, and we are seeing more and more of these trend-setters in Turkey, investing directly in the U.S., which means that there is going to be an increased interest. We work with a lot of American companies and funds. We see that they are really extremely keen on Turkey and interested in investing here.

What makes them so keen on Turkey?

Right now we are going through a very difficult period from a political perspective. I’m very saddened by everything that is happening around us. I wish we lived in a different world, but this is the reality. Within this reality, Turkey is indeed a safe haven for everyone. But this is also a growing region. The amount of consumer drive in the region and [there is a lack of] access to certain products and goods and what such opportunities could bring. There is turmoil but within every turmoil, there is an opportunity. And Turkey stands out as the safe haven within a turbulent region.

Some people would claim that Turkey has contributed to that turmoil in a way, but you say in the eyes of the American companies, in this turbulent region, Turkey still stands out as a stable heaven.

Definitely. Right now, we are not talking about political issues, I’m talking purely about how business regards Turkey. And they are really looking at Turkey as this potential to export to all of the countries around. It is easier to do business here, let’s be frank. It’s more predictable, and predictability is good.

Tell us more about what issues are hampering trade between the two countries.

First of all, it is the geographical distance. Unless you take a strategic decision from government to government to increase trade between the countries, the natural instinct of the people is not to trade with one another.

The second one is, the lack of knowledge of the people and the countries from both sides. There is very little information and … limited understanding of how Americans do business for Turkey, and for Americans, about how Turkey does business. We need a one-stop-shop that’s going to help companies maneuver.

Where do you see the two governments standing?

They have taken that decision. That’s why we are going to see increased change. We have been seeing it.

But some are arguing that despite this decision, there’s still not enough coordination or not enough joint action.

As you know, these things take time. You make a strategic decision but implementing that normally takes over a decade. I think both sides are committed. After that, there is the whole message-building part; afterward, you have the whole stakeholder outreach, you need to convince all of the different stakeholders.

Tell us what else you think needs to be done to increase trade.

Another point concerns the regulations; I think there needs to be more cohesiveness for the two countries to trade because it is one thing having the regulations, and it is another one having them implemented. Transparency is important. Intellectual property is very important, and we need to drive home this message. Turks also need to know about the way the American system works.

Where are the areas of opportunity?

Personally, I think the areas of opportunity are in terms of combining the innovation capabilities of the U.S. companies, with the manufacturing capabilities of the Turkish. If we can create a hybrid model, where this together can be marketed to our part of the world, this would be a great opportunity. And for the Turkish companies, this would bring about a change in our way of doing business as well. It will be a catalyst for that change from within.

Where are we as far as the Transatlantic Trade and Investment Partnership (TTIP) between the U.S. and the European Union is concerned?

The Turkish side feels like we are being left out. I personally do not think so. The U.S. is being very cautious and careful to make sure that Turkey is included in the whole discussion. The negotiation is ultimately between two legal entities, and Turkey is not a member of either of them. However, the U.S. is now very eager to start talking about a free trade agreement with Turkey. This free trade agreement, if we could facilitate that, would be the game changer.

Would that alleviate the fears of Turks, though?

Frankly, I think it would be better for Turkey because we can tailor it according to what our country and what the Americans need from one another, as opposed to the whole continent. The TTIP, I suspect, might take even longer to negotiate than a free trade agreement between the U.S. and Turkey.

It will be a game changer, for instance, if we are going to utilize any of the newly found U.S. shale gas, since you need it to be a country that has an FTA with the U.S. That’s a game changer. And the other one is, if you have an FTA, you are suddenly much more interested in finding out about the details, and the regulations become much less and it is so much easier to do trade.

How do you think political relations between the two capitals affect economic relations?

I don’t think they are affected politically. Economic relations are the drivers of political relationships. Business diplomacy is the one that leads because of the way the Americans work.

But it has never been the case as far as Turkey is concerned.

I think we are at an inflection point. We are changing. We are realizing that business does indeed drive diplomacy.

In the past, politics were the main component of relations, which had a push factor for economics. I think the inflection point is that, Turkey is now realizing that business diplomacy is the real driver of political decisions – that is why businesses shouldn’t be affected by the political issues and businesses should always be decided upon by the people. And if there is any mutual benefit to be gained within the business transaction, then we should let that happen. We have been seeing this change since the 1980s, but it is just now that we are realizing how important this is.