1. Historical Perspective of Economic Relations Between the US and Turkey
Economic relations between the United States and Turkey began to take shape in the early 20th century but these relationships became more prominent after the establishment of the Turkish Republic. In the early years of the Republic, Turkey focused more on economic policies oriented toward Europe, but during the Cold War period, the economic relations with the US intensified.
- 1950s and 1960s: During this period, Turkey and the US developed their economic ties, particularly with the Marshall Plan and Turkey’s participation in the Korean War. The US provided economic aid and investments to Turkey, contributing to its economic development.
- 1980s: In the 1980s, Turkey started adopting a more outward-looking economic policy. This period saw increased exports to the US, particularly in the textile and food sectors, and the Turkish share in the US market grew.
- 1990s and 2000s: The 1990s were marked by increased cooperation in defense and energy sectors, while the 2000s saw even more intensified economic relations, with both countries entering into new trade agreements and taking part in global trade systems.
2. Trade Agreements and Economic Cooperation
There are several key agreements and economic partnerships that have shaped US-Turkey trade relations over the years:
- Customs Union: Turkey entered into a Customs Union with the European Union in 1995, which has significantly affected trade with the US. Under the Customs Union, Turkey is part of a common customs area with the EU, which has made Turkish products more competitive in the US market.
- Trade and Investment Framework Agreement (TIFA) – 1991
- Purpose: This agreement provides a framework aimed at enhancing trade between the USA and Turkey, as well as improving the investment environment in both countries. It aims to make trade between the two countries more efficient and to promote mutual investments.
Main Objectives:
- Development of Trade: Various measures have been taken to facilitate trade between the USA and Turkey. This includes cooperation on customs procedures, the removal of trade barriers, and the diversification of trade.
- Promotion of Investment: The agreement aims to increase foreign direct investments. It includes a series of regulations that facilitate investments from Turkey to the USA and vice versa.
- Reduction of Tariffs and Trade Barriers: The agreement aims to mutually reduce trade barriers and decrease customs tariffs between the two countries.
3. Annual Export and Import Figures
The trade volume between the US and Turkey has varied over the years. In recent years, the US has been Turkey’s 6th largest trading partner. The trade balance between the two countries is significant, with major exports from Turkey to the US and vice versa.
- 2023 Figures (approximate):
- Exports: Turkey’s exports to the US in 2023 are around $13 billion USD.
- Imports: Imports from the US to Turkey in 2023 are approximately $12 billion USD.
- This suggests a relatively balanced trade relationship, with Turkey exporting goods such as textiles, automotive products, and machinery to the US, and importing technology, pharmaceuticals, and chemicals from the US.
4. Top 10 Exported Products to the US
Turkey’s main exports to the US are typically industrial and agricultural products. As of 2023, the top 10 exported products are:
- Machinery and Equipment (automotive and spare parts)
- Electrical Machines and Devices
- Textile Products (garments and ready-made clothing)
- Iron and Steel Products
- Pharmaceuticals and Medical Products
- Software and IT Products
- Fruits and Vegetables (especially citrus fruits, grapes, and figs)
- White Goods and Electronic Products
- Chemical Products (plastics, pharmaceutical raw materials)
- Olive Oil and Food Products
5. Top 10 Imported Products from the US
The US mainly exports high-tech and industrial products to Turkey. In 2023, the top 10 products imported by Turkey from the US are:
- Electrical Machines and Devices
- Computers and Electronic Products
- Pharmaceuticals and Medical Products
- Machinery and Spare Parts
- Chemical Products and Petrochemicals
- Petroleum and Natural Gas
- Defense Industry Products
- Transportation Equipment (especially aircraft and spare parts)
- Processed Iron and Steel Products
- Agricultural and Food Products (especially corn and soybeans)
6. Logistics Advantage and Faster Delivery Compared to the Far East
Turkey’s geographic location gives it a significant logistical advantage, as it serves as a bridge between Europe, Asia, and the Middle East. This strategic position allows for faster delivery times, particularly when compared to East Asian countries.
- Fast Delivery: Turkey’s proximity to Europe, Asia, and the Middle East makes it easier to provide faster shipping times than other regions, such as East Asia. The Turkish logistics sector, with major ports and airports (such as Istanbul Airport, Mersin Port), enables fast and efficient access to these markets.
- Access to the Far East: Compared to Far Eastern countries, Turkey offers quicker delivery times to Europe and the Middle East. This is particularly beneficial for the export of perishable goods, giving Turkey a competitive edge in the logistics and supply chain sector.
7. Turkey’s Strategic Location and Production Advantages
Turkey’s strategic position not only offers logistical benefits but also provides a production hub that connects Europe and Asia. This location is a significant advantage for both production and trade.
- Bridge Between Europe and Asia: Turkey acts as a geographical and economic bridge between Europe and Asia, making it an ideal location for production and distribution centers.
- Large Production Base: Turkey has a diverse industrial base, from automotive to textiles, electronics to food production. This wide range of manufacturing capabilities makes Turkey an important player in global supply chains and an attractive market for US companies.
8. The Value of the US Dollar in Turkey and Price Advantage
The value of the US dollar in relation to the Turkish lira provides a significant advantage for Turkish producers when exporting goods to the US. This exchange rate advantage makes Turkish products more competitive in global markets.
- Export Advantage: The high value of the US dollar relative to the Turkish lira makes Turkish goods more affordable in the US market. This allows Turkish exporters to offer their products at more competitive prices compared to other countries.
- Cost Advantage: Turkish producers benefit from lower production costs due to the favorable exchange rate, which enables them to offer their products at more attractive prices in foreign markets.
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