Physical proximity not enough to boost trade with EU

Physical proximity not enough to boost trade with EU

Proximity will be a key word in the post-pandemic world, as well as glocalization.

No doubt the novel coronavirus came as a slap on the face of those who thought they were benefiting from globalization especially by outsourcing production to the cheapest bidder. The alarm bells had started to ring long before when United States, the biggest promoter of free trade, turned protectionist, while China, still under a communist government, came in defense of free trade.

Significant supply shortages of simple products like paracetamol or face masks will no doubt have its toll on international trade. We might come across “Buy Europe” campaigns in the old continent against tendencies in Washington to resort to “Buy American Act.”

But no matter how big the fear of overreliance on international supply chains could grow, the need for international trade, while in modified form, will remain a reality.

That’s why, instead of “Buy French” or “Buy Danish,” we might see “Buy Europe,” campaigns and that’s also why proximity and glocalization will also be crucial for Turkey’s place in the global value chain in the post-pandemic world.

An immense window of opportunity has opened in front of Turkey. But Turkey might miss making the most of this opportunity, if decision makers are to understand proximity as simply “physical” proximity, limited to trade issues. Proximity in the post-corona world will involve proximity in the transfer of technology, finance, services and even data in the supply change.

Glocalization will mean partners will have to be on the same page in strategically important issues and see eye-to-eye on day-to-day issues.

So, it is not going to be enough for Turkey to present itself as a reliable partner because its production lines have proven very resilient, having survived all sorts of challenges, from earthquakes to financial crisis to outbreaks.

If a country like Germany, which will assume the presidency of the European Union by July 1, is unwilling to open the borders with Turkey sooner rather than later, that is not because it is taking the numbers provided by the Turkish Health Ministry as key reference, but the numbers coming from the Justice Ministry. Western capitals are less interested in the number of hospitalized COVID-19 patients, but more interested in the numbers of those incarcerated for criticizing government policies.

It is not Turkey’s success story in fighting the pandemic that will shape its place in the glocalized value chain, but the new law on the bar associations, or the law on security investigation that are on parliament’s agenda. If Turkish decision makers will fail to see the relevance, then Turkey will fail seizing the opportunity that will open in the post-corona period.

Some might assume that Turkey will never be an expendable trade partner and that, especially with the looming global economic crisis, short-term trade interests will override the West’s concerns on issues like rule of law. But that’s delusional. No doubt there might be many among Turkey’s Western allies to see in Turkey just a simple trade partner, where doing business is still possible despite democratic deficit. But this is exactly the situation that Turkey’s decision makers should avoid. This type of “bon pour l’Orient” will only take us so far. In other words, Turkey’s place in the international value chain will remain at the minimum.

The day Turkey’s partners will stop complaining about democratic standards in Turkey, and if as a result Turkish ruling elites will fall in the trap of thinking that fundamental tenets of democracy will not factor in in the country’s relations with the outside world, that will be the day Turkey will be digging more and more in the middle income trap, making it impossible to come out of it in the short to mid-term.