US-EU Free Trade deal from textile business’ perspective

Turkey definitely wants to be a party to the Transatlantic Free Trade Agreement that is to take place between the United States and the European Union. 

The Minister for Economy Zafer Çağlayan, who was in Washington last month, the government, and non-governmental organizations are pursuing their efforts to become a part of the agreement. 

I asked Nur Ger, the businesswoman whom I travelled to Gaziantep with, about the Transatlantic Free Trade Agreement that finds a spot on the economy pages lately. 

Nur Ger is the first woman president of the Turkish Clothing Manufacturers’ Association. 

She established the Suteks Textile Company 26 years ago with her mother’s support. 

Ger is as experienced in gender equality as she is in the textile business. Ger, who is the head of the gender equality working group of the Turkish Industry and Business Association (TÜSİAD), is the first SME manager to sign the U.N. Women’s Empowerment Principles. 

For this reason, she received an “honor award” from the United Nations in May 2013. 

Apart from implementing the wages equality principle and also abiding by the rules of equality when hiring and promoting employees, Ger also distributes bonuses every three months. She also gives courses on using technology. 

Overall, Suteks serves as a model for the textile business, with its high value added products based on innovation. 

That is why the company can compete in the international arena of ready textile and clothing. 

Let me remind the reader of one thing. 

Ready textiles and clothing are Turkey’s important export items. 

This sector, which reached $16 billion in 2012, is expected to reach a $20 billion export volume. 

E.U.’s seven countries, including Germany, the United Kingdom, Spain, are among the countries that purchase the most textiles from Turkey. 

“A 2 euros item but also a 200 euros item is being sold to Europe. We used to produce cheap products in the past. Now we can produce both cheap and expensive products,” said Ger. 

She mentioned ready wear brands like L.C. Waikiki and Koton that have opened up to world markets. 

“Unfortunately the incentives have been given late or else we could have competed with China long ago,” said Ger, referring to the incentive packages prepared for Turkey’s eastern and southeastern provinces in order to compete with the cheap Chinese products. 

Let us return to the main topic: the U.S.–EU Transatlantic Free Trade Agreement. 

“Zero customs” will be implemented between the parties once an agreement between the U.S. and the EU is reached as a result of negotiations that are expected to be finalized in four years. 

Turkey will encounter a profound loss in the ready wear industry if it stays out of this agreement. 

The U.S. implements taxes ranging between 8 to 30 percent for the Turkish ready wear products that enter its market. The average tax is between 15 to 18 percent. 

Once the free trade agreement between the U.S. and the EU is finalized, the products of countries like Bulgaria, Poland and Romania, which are our rivals in the international arena, will be cheaper than our products by 15 to 18 percent. 

“We should launch a campaign for a free trade agreement with the U.S. just like we launched a campaign to sign the Customs Union Agreement with the EU. The free trade agreement that the U.S. has with South Korea took eight years to finalize. If we do not act today, the ready wear sector, which is of strategic importance to Turkey, may well be endangered,” said Ger. 

“I may need to open factories in Romania or Poland,” she added.