BrazilKey sectors highlighted as Turkey and US seek $100 billion in trade
A new report from BCG has identified eight key sectors of focus for Turkey as it seeks to increase its bilateral trade relations with the US.
Ahead of next month’s trade discussions between the two countries, a new report prepared by global management firm Boston Consulting Group has identified the key sectors which could help push US-Turkey trade volume up to the $100 billion mark. According to Turkish media outlet Daily Sabah, the 300-page report was prepared under the chairmanship of Turkey’s Trade Ministry, with input from the business community and a wide range of business associations.
Of almost 40 local sectors examined, the BCG report identifies the automotive, textile, aviation, white goods, jewelry, building materials, furniture and tourism segments as those holding the greatest potential to boost Turkish exports to the US, while liquefied natural gas (LNG), aerospace, medical devices and chemical products were singled out as suggested areas of focus for the US side in the two countries’ efforts to gradually increase bilateral trade to $100 billion.
While political tensions persist following a series of diplomatic spats over the past twelve months, the new $100 billion target agreed upon at last month’s G20 summit in Japan is a significant jump from the $75 billion previously flagged, and is nearly five times greater than the $20.5 billion volume of trade recoded in 2018. According to the Office of the U.S. Trade Representative (USTR), imports from Turkey increased by more than 120 percent over the past decade.
With imports and exports between the countries close to evenly split, USTR figures show that Turkey is currently the 33rd largest supplier of goods into the US, with machinery, vehicles, carpets and textiles, and iron and steel the leading categories in 2018, the latter of which the US reduced tariffs on earlier this year. US exports to Turkey meanwhile were the highest by value in 2018 in the categories of aircraft, mineral fuels, iron and steel, machinery, and cotton.
According to Sabah, the BCG report stresses that the ongoing US-China trade tiff has created a vital opportunity for Turkey – with the automotive, apparel, and white goods segments notably among those highlighted in the report. In many areas, the recommendation is for Turkish enterprises to focus on quality and branding in order to compete with the cheap manufacturing advantage of Southeast Asian nations looking to capture their own share from the trade fall-out.
Elsewhere, the report looks into opportunities for local small and medium enterprises, noting the importance of establishing support mechanisms to enhance exports, while further suggesting increased consulting, training and business partnerships can add to the potential. Overall, increased trade would be supported by way of a preferential trade agreement to facilitate customs duties and regulations and through promotional campaigns promoting Turkey to US investors.
“Our goal is not only to increase trade between the two countries, but to also focus on foreign capital investment,” said Turkey’s Deputy Minister of Trade Rıza Tuna Turagay at a round table meeting with public and private stakeholders held last month. “The exports of our domestic products to third countries will increase in parallel with the increase in foreign capital.” As per USTR data, US foreign direct investment (FDI) in Turkey stood at $4.3 billion as of 2017.
