Israelis believe trade with Turkey will continue

The tensions in Israeli-Turkish relations have not disrupted business between the two countries, so far.

The strained tensions in Israeli-Turkish relations since mid-2010 have not disrupted routine business between the two countries. The Israel Export and International Cooperation Institute reports that bilateral trade actually increased to $1.1 billion in Israeli exports to Turkey January-July, while Turkish exports to Israel rose to $1.25 billion, giving the Turks the better end of the bargain.

Israel imported $1.8 billion of goods from Turkey in 2010, and exported $1.3 billion to it. "Turkey was an important trading partner in January-July, ranked seventh in the Export Institute's table of export destinations," says Export Institute director Avi Hefetz. "The interest to maintain bilateral economic relations is mutual. From the Turkish perspective, it should be remembered that exports to Israel are larger than imports from it. We assume that Turkish businessmen will want to keep trade relations with us, and hope that political factors on the Turkish side will allow business as usual to continue."

The current crisis is over Israel's refusal to apologize for the deaths of nine Turks when Israel intercepted the Mavi Marmara, which was trying to break the Gaza blockade in May 2010. The tensions increased the uncertainty among Israeli and Turkish businesspeople, who worry that the diplomatic crisis will widen and affect bilateral business ties. Privately, they say talk about good relations developed over many years, and they cite the increase in trade in recent months, despite the diplomatic problems.

An Israeli who does business in Turkey said, "Most Turkish businesspeople are educated and have a Western outlook, so I believe that bilateral economic cooperation will not be affected." However, he worries that the strained relations will affect new projects. He believes that this could happen if Israeli businesspeople refrain from making new investments in Turkey because of the diplomatic uncertainty.

Manufacturers Association president Shraga Brosh told "Globes", "My gut feeling is that everything will ultimately work out. Bilateral trade won't be hurt, despite the diplomatic crisis. Trade has actually increased over the past year. These relations are important for us and them, both sides see them as strategic."

70% of Israeli exports to Turkey are chemicals and refined oil products. Other exports include machinery, metals, and wood, furniture, and paper products.

There have been no new arms contracts between Israel and Turkey since the Mavi Marmara incident, after many deals between Israeli defense companies and the Turkish Army. Sources inform ''Globes'' that most current arms activity with Turkey involves the completion of contracts signed before the diplomatic crisis. In the past year, the Ministry of Defense, worried about the closing of the Turkish market to Israeli products, has sought to develop alternative markets, including India, Brazil, Singapore, Vietnam, and other countries.

Published by Globes [online], Israel business news - - on September 4, 2011

© Copyright of Globes Publisher Itonut (1983) Ltd. 2011

Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018