Turkish-Israeli economic, trade ties expected to soar after deal

Turkish-Israeli economic, trade ties expected to soar after deal

Turkish-Israeli economic, trade ties expected to soar after deal The bilateral economic and trade volume between Turkey and Israel is expected to soar after the recent deal to normalize relations, according to political and business circles from both countries. 

Prime Minister Binali Yıldırım said the normalization covered all areas, but the priority would be given to economic and regional cooperation, in a press meeting in Ankara on June 27.

“The normalization will be the case in all areas, but boosting economic and regional cooperation will be the key for us,” he noted, adding that the construction of the Jenin industrial zone as well as a hospital will also be accelerated through the agreement. 

Turkey has been working on developing a tax-free industrial zone in the West Bank city of Jenin in line with a project which was launched years ago by the Union of Chambers and Commodity Exchanges of Turkey (TOBB).

Speaking in Rome after talks with U.S. Secretary of State John Kerry, Israeli Prime Minister Benjamin Netanyahu told reporters: “I think it’s an important step here to normalize relations... This deal has immense implications for the Israeli economy, and I use that word advisedly… And I mean positive, immense implications,” he said.

The normalization in bilateral ties was expected to flourish cooperation, especially in the energy, tourism, construction and trade sectors, according to officials. 

The head of the International Economic Relations Board (DEİK), Ömer Cihad Vardan, said that the agreement was of great importance in terms of the region’s political and economic future, in a written statement on June 27. 

“This deal will create significant opportunities in ensuring energy security and maintaining energy diversification in the region. Besides, we expect to see soaring economic cooperation in the energy, construction, infrastructure and tourism sectors in the near future,” he noted. 

Shares of energy companies increase

Meanwhile, energy companies’ stocks in Turkey and Israel surged following the announcements about the normalization in ties, as this deal will likely open the way for enormous gas contracts. 

The shares of Zorlu Energy, which has heavily invested in Israel, soared by 15 percent early June 27. 

Zorlu Energy has a 25 percent stake in Dorad Energy, which owns an 840 megawatt (MW) power plant in Israel built with an investment of $1.2 billion that came online in May 2014.

The only route big enough for Israel’s gas exportation was a country like Turkey, which was capable of providing infrastructure and further exportation to the West, Shai Cohen, the consul-general of Israel in Istanbul, recently told Anadolu Agency. 

Pipeline infrastructure, the development of gas fields and a pipeline to southern Turkey would cost about $4 billion alone, not counting further expenses which would be accrued afterwards, Cohen explained.    
The bilateral trade volume between the two countries is currently at around $4 billion. Turkey’s exports to Israel rose by 13 percent to around $2.7 billion from 2011 to 2015, according to official Turkish statistics.        
Over the same period, Turkish imports from Israel dropped from around $2 billion to $1.6 billion.

The bilateral trade volume and tourism numbers will likely soar in short order, according to businesspeople from both sides.