Preliminary negotiations for a free trade agreement (FTA) with Israel started in Ankara on 1 September. The wide range of issues covered in the negotiations include anti-dumping safeguards, agricultural and industrial trade and investment, the prevention of double taxation, and the lowering of customs tariffs. If both sides can agree, some customs tariffs may be abolished altogether.
If the talks go well an agreement could be concluded in 1995. However, any agreement will not be directly tied to Turkey’s own planned entry into a customs union with the EU during the year, although it may provide additional advantages for Israel. Similarly, Turkey may benefit from Israel’s own FTAs with the US and the EU.
Expanding bilateral trade weighed in Turkey’s favour in 1993, with Turkish sales of $133 million compared with imports of $91 million, according to Israeli figures. However, imports fell by 18 per cent in the first six months of this year, compared to the same period in 1993, due to Turkey’s economic crisis. This has been compensated to some degree by the rapid increase in the number of Israeli tourists taking advantage of the cheap lira.
Although Israel’s population is small, its relatively high per capita gross national product (GNP) of around $12,000 could offer many marketing opportunities for Turkish companies, according to Yedidia Cohen, Israeli consul for economic affairs in Istanbul. The two economies are complementary rather than competitive. Turkey can supply cheap labour and opportunities in food processing and textile production, while Israel can offer high technology in electronics and telecommunications, and irrigation and fertiliser expertise in agriculture, the consul says.
This may be particularly useful for Turkey in the giant Southeast Anatolian (GAP) development programme in the southeast, toured earlier in the year by Israeli President Weizman. Israeli companies are particularly interested in offering their irrigation expertise. Israel is also interested in purchasing water from Turkey, through such projects as the Manavgat export scheme on the southern Mediterranean coast.