U.S.-Turkish Economic Partnership and Opportunities in Third Countries
US-Turkey bilateral trade relations have been somewhat imbalanced as most of the bilateral trade has been based on defense related purchases on Turkey’s part. The fact that Turkey’s reliance on the US for advanced technological defense-related products hampered the possibility for a diversified bilateral trade relationship led to recent efforts to strengthen US-Turkey relations through supporting trade in other areas. Given the shifting regional dynamics in the Middle East, there are also opportunities for US-Turkey cooperation in third countries. Our panelists will be discussing the challenges and opportunities before a more balanced US-Turkey economic relationship and its possible contribution to regional economic development.
Gokhan Muran Kalsin, Vice-President, MUSIAD & President, ARKON Construction Industry Trade Co.
Charles Johnston, Chair, U.S.-Turkey Business Council & Senior VP of International Government Affairs, Citigroup
Moderator: Erol Cebeci, Executive Director, SETA Foundation
by Maggie Simon
Moderated by Erol Cebeci, the discussion focused on the imbalance and need for diversification in Turkish-US trade relations, the implications of recent regional changes and new opportunities and challenges in working with third countries. Touching on the differences between Turkish and American business practices, the speakers both emphasized the substantial possibilities for cooperation and collaboration between the Turkish and American business.
Gökhan Murat Kalsın noted that despite the strong ties between the US and Turkey, trade relations between the two countries have not yet reached their full potential. Considering the outstanding growth of Turkey’s economy in the last decade, Kalsın said, the level of bilateral trade seems inadequate and insufficient, describing US-Turkish trade relations as ‘undiversified’ and noting that 25% of US imports in Turkey are military goods. At 10.2%, Kalsın said, Turkey’s GDP growth is the highest in the world, and Turkey’s economy has continued to grow despite the recent global economic turmoil. Discussing Turkey’s strong financial sector, he explained that policy changes in the last 10 years have solved Turkey’s inflation problem. Referring to the Arab Spring, the speaker contended that such political transformation will only survive with comparable economic transformation, and noted the opportunities for US-Turkish cooperation in the Middle East and North Africa. Kalsın said that a strategic model, strong reforms and global economic integration are needed for the stagnated economies in the Middle East, emphasizing the importance of trade over aid and of investment over economic assistance. Citing Indonesia’s economic growth as an example, Kalsın contended that a similar transformation could be possible for the Middle East countries undergoing political unrest and change. The speaker recommended that American businesspeople make more of an effort to understand and respect Turkish business and industry to mirror the efforts of Turkish businesses toward the US.
Charles Johnston began by emphasizing the need for fresh, new ideas on how to improve the balance in trade and investment between Turkish and American businesses. Considering Turkey’s growth and the level of entrepreneurship in the United States, Johnston stated, it is somewhat surprising that there has not been more cooperation between Turkish and American businesses. Johnston accounted for this by noting that the increased capacity of Turkey’s economy has been unrealized, unpublicized, and unrecognized in the US. He acknowledged that the two countries have different business perspectives and practices, and urged businesspeople to bridge this divide. Johnston recommended findings ways to promote collaboration through incentives, especially in third countries with substantial potential markets, like Iraq. The speaker made the case that job creation in countries undergoing political change will not be organically driven, but instead will need foreign and external input, providing the opportunity for Turkish-American business collaboration. By combining the strengths of both Turkish and American business, the high level of risk can be reduced, Johnston said, noting that Turkey has experience in the Middle East, other countries find Turkish entrepreneurship ‘exhilarating’ andAmerican companies can provide credibility. Johnston offered advice for Turkish businesses on working with US companies, particularly how to address American companies’ strong aversion to risk and what to understand about the different roles the Turkish and US governments play in business.