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Business as usual between Turkey, Israel

ISTANBUL - Hürriyet Daily News | 5/30/2011 12:00:00 AM | GÖKHAN KURTARAN

The tension between Turkey and Israel since a deadly attack last year has not hampered trade, which continues to rise on the sale of military and other goods.

The diplomatic tension between Turkey and Israel since a deadly attack last year on a Gaza-bound aid ship has not hampered mutual trade, which continues to rise on the sale of military and other goods.

While Turkey purchases high-tech defense-industry equipment from Israel, the military goods going the other way mostly include boots and uniforms. “Turkey dresses the Israeli army, mainly exporting army boots,” said an executive from Turkey’s Yakupoğlu, who spoke to the Hürriyet Daily News on Monday on condition of anonymity.

The company manufactures materials in Ankara and exports them to Israel. Despite the political problems between the two countries, there has been no interruption in the firm’s business thus far, the executive said.

The export of military boots constitutes just a tiny portion of the long-standing trade relations between the two parties, and both Turkish and Israeli businessmen are enjoying a golden age of trade as official figures indicate that commercial bonds are stronger than ever.

Trade between Israel and Turkey increased by 25 percent between 2009 and 2010, and by 40 percent in the first quarter of 2011 compared with the same period last year. Bilateral trade by the end of last year peaked at $3.442 billion, up from $2.580 billion in 2009.

“Turkey and Israel’s business relations are getting stronger despite the political conflicts,” Uriel Lynn, the president of the Tel Aviv & Central Israeli Chamber of Commerce, told the Hürriyet Daily News on Monday.

“Turks and Israelis are not in a fight – the trade boom in both countries proves that,” said Lynn, adding that the “bilateral trade and investments have not been affected by the political situation at all.”

Political relations between the two countries have been strained since Israeli soldiers staged a raid May 31, 2010, on the Mavi Marmara, the lead ship of an international flotilla trying to breach Israel’s blockade of the Gaza Strip. The raid led to the death of eight Turks and one American of Turkish descent. A second attempt to break the Israeli blockade of the Palestinian territory is set sail in late June, with the Mavi Marmara and 14 other ships carrying humanitarian aid departing for Gaza from various European ports.

[HH] ‘Free market wins’

“The main sectors in the recent increase of the bilateral trade volume [between Turkey and Israel] are mainly chemicals and metals,” Lynn said, noting there are several reasons for this increase and “none of them is connected with the political situation.”

He said both countries are enjoying the rise based on free trade agreements and economic growth. “The bonds between the Turkish and Israeli business sectors are still strong,” Lynn said. “All the reasons prove that in spite of political disagreement, the free market wins.”

Turkey made exports worth $2.083 billion while importing $1.359 billion worth of goods from Israel last year, according to Turkish Statistical Institute, or TurkStat, figures. In the first three months of 2011, Turkey exported products worth $579.3 million to Israel and imported goods worth $397.3 million.

Iron, steel, automotive products, oil and oil products, electrical machinery, chemicals, building materials, ready-wear products and metal goods are the main products exported from Turkey to Israel. In addition, there has been a rise in exports from Turkey of plastics, textiles, semi-precious stones and transportation equipment, according to the Israeli Chamber of Commerce.

[HH] Biggest trade partner

Turkey is currently Israel’s biggest trade partner in the region and its second-biggest in the world, following the United States, according to Ahmet Reyiz Yılmaz, the head of Yılmazlar Group, which has been undertaking large construction projects in Israel for many years.

He said Turkey could replace the United States in trade with Israel if the volume keeps climbing at its current pace.

“The inhumane attitude and the state terror conducted by Israel may cause the discarding of all trade figures, no matter how high they might be,” Zafer Çağlayan, Turkey’s state minister responsible for foreign trade, told the press in Ankara last year in the wake of the Mavi Marmara raid.

Some obstacles rooted in the political unrest between the two countries do still concern some Turkish businesses in Israel.

“The Israeli Foreign Ministry has rejected extending the visas of more than 1,000 Turkish laborers,” said Ahmet Reyiz Yılmaz, head of Yılmazlar Group, the only Turkish construction company running projects worth nearly $2 billion. Yılmaz is also the head of Turkey’s Nationalists and Conservative Party.

“We have been actively running construction projects in Israel for 17 years,” he said, noting that the Israeli authority’s rejection of the visa extensions causes delays and interruptions in his business. “The Turkish government also remains indifferent to our situation,” Yılmaz, said, adding that he is expecting resolution from the decision-makers of both countries.

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