Armenian reconciliation to boost border trade with Turkey

The historic protocols signed last Saturday by the Turkish Foreign Minister Ahmet Davutoğlu and Armenian Foreign Minister Edward Nalbandian in Zurich is expected to have a deep impact on commercial life in the region.

Aimed at normalizing relations between the two countries, the protocols are expected to make way for collaboration in a wide variety of industries including textile, food and tourism when the border between Turkey and Armenia opens in the New Year.

Georgia has long been used as a route for back-door trade between Turkey and Armenia. The annual value of trade is about $150 million, a figure expected to reach $500 million once the border opens.

Kaan Soyak, the co-chairman of the Brussels-based Turkish-Armenian Business Development Council, said although the border between the two countries has been closed for years, the volume of indirect trade between the two countries has reached $150 million. When the border gates become operational, trade volume is expected to rise three-fold, he said.

Especially with the start of railroad trade all products that Armenia and Middle Eastern countries purchase from Mediterranean countries will pass through Turkey. "Turkey will run the show. That means an extra $150 million income for Turkey,” said Soyak.

The deal will also benefit Turkish textile companies that have trouble sending materials to Russia. Shifting 5 percent of the total investments to Armenia would enable companies to benefit from the free custom agreements between Armenia and Russia.

Food, health, transportation and textile industries will also be at the forefront, said to Soyak. "Our textile exporters, who have been struggling to send materials to Russia, will benefit from the Armenian route. That is because Armenia and Russia have signed a free customs agreement. If our businesspeople produce 5 percent of their products in Armenia, they will be allowed to benefit from the deal and export to Russia without paying a customs fee. It would also enable development in the Eastern Anatolia.”

“Diaspora tourism” will also be launched soon to established improved ties between Turkey and Armenia. Many members of the Armenian diaspora wish to visit Turkey to see the villages and towns where their ancestors lived at the beginning of the 20th century. Tours will be organized to Kars, Erzurum, Van, İstanbul, Muş, Yozgat and Adapazarı.

Meanwhile, Istanbul Kültür University Faculty Member Mensur Akgün said Armenia would benefit from the new protocols.

Nalbandian announced Monday, via an Armenian news agency broadcasting over the Internet, “The border could be opened by the New Year.” This announcement may be perceived as symbolic of a new era for the commercial structure of the region. The Eastern Gate located 66 kilometers from Kars has been shut since 1993, the final year of direct trade between both countries, although trade relations between Turkey and Armenia have continued through Georgia. However, the existence of Georgia as the middleman has meant that businesspeople and customers lacked the advantage of establishing close business relations. Using an intermediary is also more expensive, increasing the price of trade products.

Following the signing of the protocols in Zurich, the Union of Manufacturers and Businessmen of Armenia, or UMBA, Chairman Arsen Ghazarian came with 10 delegates arrived in Turkey on Monday. For two days, Turkish and Armenian businesspeople engaged in discussions. It has been 15 years since both parties met face to face. UMBA delegates will also meet with Turkish Industrialists' And Businessmen's Association, or TÜSİAD, representatives. Wednesday’s meeting will be in the northwestern city of Bursa. Members will watch the 2010 World Cup qualification stage Group 5 game between Turkey and Armenia.