One belt, one road, multi-faceted relations
After two important visits to India and Russia, President Recep Tayyip Erdoğan’s planned destinations for next week are China on May 14-15 and the United States on May 16-17. Then he will visit Brussels to attend a NATO summit. In Brussels, a high-level meeting with the European Union is also likely.
Donald Trump’s election as the new U.S. President has opened a new discussion in the international community: Are we approaching the end of global trade relations and beginning to restrict ourselves with neo-protectionism?
One school of thought pessimistically argues that this is exactly what is happening. Trump’s election campaign was very critical of global free trade, free flow of capital and free circulation of labor. One of his first implementations after being elected, therefore, was to cancel the Trans-Pacific Partnership (TTP), which was signed by his predecessor Barack Obama.
Then he blocked the continuation of the Trans-Atlantic Trade and Investment Partnership (TTIP) negotiations with the EU. EU leaders now think that TTIP is not entirely dead, but its future is “on ice.”
As many observers started to think that Trump’s next target would be NAFTA, he surprisingly calmed down Mexico and Canada, and said this multilateral agreement could wait for now. The second school of thought, inspired by the NAFTA decision, therefore optimistically suggests that Trump is now beginning to understand the merits of multilateral trade relations and insists on re-negotiating the terms of agreements previously agreed upon. Will this approach wake him up and cause him to do the same with the TPP and TTIP? Time will show.
Clearly, China will see a different approach contrary to that of Trump’s when it hosts Erdoğan. When in Washington, Chinese leader Xi Jinping probably explained why he was the keynote speaker in Davos this year and why China continues to believe in globalism. With Erdoğan, he will probably feel more comfortable because Turkey and China, two members of the G-20, share similar views on world trade.
Turkey’s diplomatic relations with China were established in 1971. The Chinese economy started to open to the outer world only after 1978. With the 1990’s, China began to be integrated more into the world economy and finally became a member of the World Trade Organization in 2001.
Both Turkey and China have proven to be the rising stars of the world economy toward the end of the first decade of the 21st century. At that time, they were literally competing with one another in terms of highest growth in GDP with rates around 9 percent per annum. Both countries were, and still are, dominantly run by the construction sector in their economic growth. Today, much affected by global recessionist tendencies, Turkey hardly sees a growth rate of 2 percent and China’s is down to 6 percent.
Nevertheless, Turkey and China have closed the gap in their bilateral economic relations rather rapidly once they discovered their potential. In 2008, the bilateral trade volume between the two countries was $13 billion. In 2016, the bilateral trade volume surpassed $27 billion. It is worth underlining, however, that more than 90 percent of this volume is Turkey’s imports from China. This overwhelming trade deficit that Turkey has against China is probably a major issue to be discussed between the two countries with a view of achieving a more balanced trade relationship.
The main purpose of Erdoğan’s China visit on May 14-15 is to attend the “One Belt One Road” summit. One Belt One Road (OBOR) initiative, on the one hand, has the potential to be the world’s largest project for regional cooperation. China names the physical road to establish connectivity between Beijing and the very western end of Europe as “the belt.” What they call as “the road” is actually the maritime Silk Road, namely the shipping lanes, from China to the Mediterranean. Seen from this perspective, the project encompasses some 65 percent of the world’s population, one-third of the world’s GDP, and one-fourth of all the goods and services that move in the world.
Obviously, this ambitious project is one of the instruments for China’s drive to be in favor of open global trade. Turkey and China can find a joint cause in defending free trade and globalization. Turning away from it will raise prices and will hit the poor people the hardest. It would kill new job opportunities, too. Therefore, Turkey’s opening to China and China’s integration with the world play an important role in the development of world economy in general.
It is important, however, to underline once more that all these new opportunities do not and should not be seen as a replacement to Turkey’s relations with the EU. These are all complementary processes. Erdoğan’s visits to India, Russia, China and the U.S. should simply be planned with a view to such complementariness.