Israel’s economic office in Istanbul will resume its operations on August 1 after it drastically downgraded its activities in Turkey in recent years due to the diplomatic fallout between the countries, Economy Minister Orna Barbivai announced Tuesday.
The Economy Ministry's Foreign Trade Administration noted that Turkey’s economy combines advanced industry with agriculture based on traditional farming methods. Turkey is considered the 19th largest economy in the world and serves as a platform for the activities of many multinational companies.
The resumption of operations of Jerusalem's economic attachés in Istanbul will affect some 1,540 Israeli companies currently exporting to the Turkish market and help strengthen their business activity in this lucrative market. Turkey is the fourth most important trading partner for the Israeli economy and was the fifth most important export destination in 2021.
Israel and Turkey have had a Free trade Agreement (FTA) in effect since May 1997. By virtue of the trade agreement, a joint economic committee for both countries has held four rounds of meetings, the last of which took place in Jerusalem in July 2009. In light of the recent rapprochement between the countries, a fifth round was slated for fall 2022.
Ohad Cohen, Director of the Foreign Trade Administration at the Economy Ministry, said that Turkey “is a significant economy for Israel’s foreign trade. Today’s exports to Turkey are concentrated and there is great potential for expansion. The potential inherent in the cooperation, for the benefit of the two countries.”
Trade data shows that the mutual trade of goods and business services between Israel and Turkey has reached $7.7 billion in 2021, nearly a 30% increase compared to the year before.
The volume of exports of goods to Turkey in 2021 stood at around $1.9 billion, making up 34% of Israeli exports to Eurasia and other European countries, an increase of about 30% compared to 2020's $1.4 billion in exports.
Israel's exports to Turkey mainly consist of chemicals, which comprise 52% of Israel's total exports to the country, then followed by base metals with 14%, and rubber and plastics with 10%. The Jewish state's imports from Turkey consist of 27% base metals, 11% machinery, 9% transportation products, and 7% fresh agricultural produce.
The Foreign Trade Administration says that the trade deficit with Turkey stood at about $5.7 billion, while Israeli exports to Turkey amounted to about $2 billion.
This latest positive diplomatic development is the latest phase in the warming ties between Jerusalem and Ankara.
4 View gallery
Then-Foreign Minister Yair Lapid meets with Turkish counterpart Mevlüt Çavuşoğlu in Jerusalem
(Photo: GPO)
Then-Foreign Minister Yair Lapid visited Turkey last month and met with his Turkish counterpart Mevlüt Çavuşoğlu.
Çavuşoğlu was in Jerusalem in May for a diplomatic visit, the first such high-level visit by a Turkish official in Israel in 15 years. The focus of his visit was the normalization of bilateral ties between the two countries, the return of the two countries’ ambassadors, and the potential expansion of collaboration after years of cooled and sour relations.
Çavuşoğlu’s visit follows President Isaac Herzog’s visit to Turkey in March, the first Israeli leader to visit the country since 2008. When Herzog entered office, Turkish President Recep Tayyip Erdoğan called him to congratulate him on his election in a conversation that led to a resumption of dialogue between Jerusalem and Ankara after a years-long fallout.
The relations between Israel and Turkey have soured in recent years as Erdoğan and his Islamist ruling party have drawn the country closer to the Muslim Brotherhood and espoused anti-Israel rhetoric.
4 View gallery
President Isaac Herzog and Turkish counterpart Recep Tayyip Erdoğan in Ankara
(Photo: AFP)
Turkey has also become home to Hamas’ headquarters, further exacerbating tensions between the nations. Turkey is facing a complex financial situation in the country, as well as tense relations with the United States and Europe. Erdoğan may attempt to improve his situation through mending the rift with Israel.
While Israel is emphasizing the need to expel Hamas from Turkey, Ankara is underscoring its desire to integrate into the Israeli gas project. Turkish Energy Minister Fatih Dönmez arrived with Çavuşoğlu in Israel. Erdoğan said he was prepared to work with Israel on reviving an old plan to ship gas to Europe through Turkey.
After Israel signed an agreement with the European Union last month to export natural gas to Europe, Turkey is sure to be interested in joining it.