Turkey trusts Ross’ commitment to boost trade

Turkey trusts Ross’ commitment to boost trade

While even some members of the Turkish business community find the target of increasing the volume of trade between Turkey and the U.S. to $100 billion too high, the two key figures that are spearheading the efforts are confident that increasing the current volume fivefold is not mission impossible.

In their effort to start work towards meeting that target, Nail Olpak, the head of the Foreign Economic Council (DEİK), and Mehmet Ali Yalçındağ, the head of the Turkish-American Business Council (TAİK), seem also to rely on the political will of the Trump administration and the business culture of U.S. Trade Secretary Wilbur Ross.

After the presidents of the two countries set the target to $100 billion nearly a year ago, Yalçındağ took over the mission of preparing a road map. In that respect, the Boston Consulting Group (BSG) was hired to prepare a report which was issued last August.

Following a letter, Yalçındağ penned to U.S. President Donald Trump on how to proceed to boost trade in view of the report, he received news from his office that Trade Secretary Ross wanted to speak on the phone. Trump had forwarded the letter to Ross which led him to contact Yalçındağ.

“I did not believe it at the beginning, but Ross was on the phone exactly a minute after the set time for the conversation,” he told a group of Turkish journalists in New York on Sept. 24.

Ross asked him to provide information on how to move ahead and after a while asked him to send the BCG’s report, while inviting him to Washington. “I’ll do that but it is hundreds of pages,” Yalçındağ told Ross. “I have instructions to increase trade and I will work on it,” replied Ross. To his surprise, the next time he met Ross in Washington he was impressed to see how well prepared the trade secretary was. “During the meeting, we realized how Ross was informed about Turkey. He is obsessed with numbers and details and we found out that he had studied really well the Turkish dossier,” a member from TAİK told me.

“Ross had not outsourced the job of studying the dossier. He seemed to work on it himself. That’s when I understood that the U.S. side is taking the issue even more serious than we do,” Yalçındağ said, in reference to his remarks at the beginning of his talks with journalists on how his efforts on the “$100 billion” met with suspicion even by some Turkish businesspeople.

Ross told Yalçındağ that he was pleased to find out that the report of BCG overlapped with the one prepared by the U.S. trade department.

TAİK’s efforts set the ground for Ross’ visit to Turkey on the first week of September, and both Olpak and Yalçındağ underlined the fact that Ross spent four days full of intensive talks: “A program that did not include any touristic visit like a tour on the Bosphorus).” In addition to talks with government officials, Ross insisted on holding several meetings with businesspeople.

In addition to his message on the need to act fast, formulating it as “time is your enemy,” Ross told the Turkish side it was important to move ahead with relatively big Turkish companies. “Let’s remained focused,” he said, in line with the BCG’s advice on concentrating in half a dozen sectors, which have comparative advantages in the bilateral trade with US.

It was also a relief for the Turkish side to hear from Ross that the two sides have to benefit from the increase on trade on a 50 to 50 basis. In other words, as there is a deficit in favor of the U.S. currently, efforts will aim at increasing Turkey’s exports from $8 billion to $50 billion.

The impression the Turkish side got was that, in its effort to weaken the hands of China in the “trade wars,” Washington wants to compensate with countries like Turkey. And one of the reasons why he urged Turkey to act fast was aimed at making sure that Turkey does not lag behind other countries like Vietnam, or other southeastern ones. “If you don’t act in time it will be difficult to get you ahead of other countries,” Ross told the Turkish side.

While the BCG has selected automotive, textile, jewelry, civil aerospace, white goods, building materials, furniture, travel and tourism from the Turkish side with the highest potential to grow, on the U.S. side, the sectors determined were civil aerospace, energy, medical devices and chemical products.

The report warned, however, that the “existing state of global trade and Turkey-U.S. trade relations do not promise a very quick path to reach targeted levels.”  Speaking at the 10th investment conference organized by TAİK in New York on Sept. 25, however, Dr. Emre Bayram from the BSG said the target was “not unrealistic.”

“When there is a will, there is a way,” the saying goes. The administrations in both capitals seem to have the political will on boosting the trade, but looking at the level of interest shown by U.S. companies to the investment conference, some convincing needs to be done as far as the business groups are concerned as at the end of the day they remain the real actors that will make it happen.

When the U.S. made clear its intention to impose tariffs on steel imports from certain countries in 2018, Turkey among them, Turkish ministers could not reach their U.S. counterparts on the phone to talk about it. The fact that Ross remains decided to boost trade with Turkey might facilitate the convincing process.

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