Turkey to boost trade with Asia

Turkey, one of the world's largest exporters and among the world's top 20 economies, says that it wants to dramatically increase trade with Thailand and the 10 Asean countries over the next couple of years.

"Trade with the Asia Pacific countries stands at about $23 billion, or a mere 3% of our overall global trade, and to me this is small. We need to grow this," said Kursad Tuzmen, Turkey's Minister of State for Foreign Trade.

In 2006, Turkey's global trade rose to more than $250 billion; it aims to see trade flows rise to $1 trillion by 2023. The country is still in the process of seeking approval to join the 25-member European Union.

Turkey's gross domestic product stood at $423 billion in 2006, with exports in the year expected to reach $100 billion.

"The centre of gravity for the world is shifting from the west to east in every aspect from investments to capital, and Turkey can be a channel for this flow," Mr Tuzmen said.

As part of its effort to play a greater role in the region, he said the country would also like to negotiate free trade agreements with Asean countries. But it can only do so once the country's entry into the EU is sorted out.

"Trade with the Asia Pacific region could grow 10 times the current level in the next few years," he says. It was necessary to increase trade since Asia Pacific is growing at around 8-9% annually, similar to Turkey at 7%, he said.

His government set a target to boost global exports to $500 billion and imports to $600 billion by 2023. Mr Tuzmen hopes that increased trade with Asia Pacific countries would play a vital role in achieving these targets.

In 2005, 27.4% of the world's total exports and 24.7% of the world's total imports were from the Asia-Pacific region.

Turkey exported $3 billion to the region last year, while importing $20 billion worth of goods.

"We need to balance these trade figures, and we want to increase the contribution from the region to the overall trade data," Mr Tuzmen said, citing his government's efforts to boost trade with neighbouring countries when it came to power in 2002. Turkey's neighbours now account for nearly 30% of its trade volume, up from a mere 3% five years ago.

"This is the kind of success we are looking for from Asia-Pacific countries as well. You invest in us and we will invest in you," he said.

"What we aim for is not just to sing songs with you, but to dance with you as well."

By bridging the gap between the two regions, he said, the barriers to trade would be removed. In addition, with a highly skilled labour market and nearly 70% of the population under the age of 30, Turkey is ripe for Thai companies to invest.

"We will hold trade fairs, exhibitions and all that we can do in our capacity to try to sell our products," he said. "If we have been successful in penetrating the EU market, then why not the Asia Pacific market?"

One of the biggest problems faced by Turkish companies is the higher tariff barriers imposed by countries in the region, while Turkey imposes a mere 3.6% average tariff for imports.

"We have been trying to clear these issues up and that is why we had a special agreement with China, where we were witnessing a very wide trade deficit. We were importing $9 billion worth of goods, while exporting a mere $700 million," Mr Tuzmen said.

He said his country's strength was in fields such as chemicals, automotive parts and components, iron and steel, textiles, garments, sanitaryware, marble and tiles. Asia-Pacific countries could import these goods from Turkey, he said.

Textiles account for about $20 billion in exports; auto parts and components $15 billion; and iron and steel, electrical appliances and chemicals each account for $9 billion.

Turkey sees 60% of its GDP arising from foreign trade and hopes to enter the EU by 2010. It is not offering any tax incentives for investors, but offers lower electricity charges and land rights benefits to promote certain underdeveloped regions in the country. All these changes have helped attract investment flows.

"Until 2001, total FDI (foreign direct investment) into Turkey stood at a mere $1.1 billion for the decade. But from 2001 it has picked up, and in 2006 alone it stood at $20.6 billion, and better still in the first quarter of 2007 during which we have seen $12 billion FDI inflows," said Tuncer Kayalar, Undersecretary for Foreign Trade. In 2005, FDI was $9.8 billion, more than triple the $2.8 billion in 2004.

All this has helped Turkey achieve GDP growth that rivals the rates seen in the robust Asian region. The country's economy grew about 6% in 2006, 7.5% in 2005, and 9.9% in 2004. This year, the ministers expect the country to see a growth rate of about 7%.

As a result, Turkey is positioning itself as a springboard for companies to enter the lucrative EU and the oil-rich Middle Eastern market.

The EU has a combined GDP of nearly $15 trillion and a population close to 650 million people; the Russian Federation has 144 million people and GDP of $766 billion; and the Middle East has a combined population of 311 million and an oil-fuelled GDP of $1.3 trillion.

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