Since the Ottoman Empire, Turkey has served as an economic stronghold in the region and across the globe. It has experienced rapid industrialization, positioned itself as a producer of diversified goods and services and secured itself a continually expanding role as a trade partner in the global economy.
It has also established itself as an economic partner of the United States. For decades, these countries have had close economic ties, and in recent years, despite challenges to the global economy, these ties have grown stronger. Since 2003, U.S. goods exported to Turkey have risen 316 percent, while U.S. goods imported from Turkey have risen 76 percent. Equally impressive, the number of U.S. companies operating in Turkey has increased by 50 percent since 2007.
These growing ties are no accident; they result from concerted efforts between the U.S. and Turkey to increase bilateral trade and investment. The 2009 Framework for Strategic Economic and Commercial Cooperation (FSECC) President Obama and President Erdoğan established, for example, helped bilateral trade reach record levels of nearly $20 billion in 2011. Meanwhile, U.S. exports to Turkey during this time increased 106 percent and, from 2010 to 2011 alone, helping to create more U.S. jobs. Additionally, U.S. foreign direct investment (FDI) in Turkey nearly tripled. FSECC was such a success, President Obama and President Erdoğan established a cabinet-level “High-Level Committee” in 2013 to build off it.
These concerted efforts have been paramount to increasing bilateral trade between the United States and Turkey, which has nearly tripled to $19 billion in the past decade.
Even more importantly, Turkey’s own consumer base and its connections to business opportunities through its 17 Free Trade Agreements and 82 Bilateral Investment Treaties with nations throughout Central Asia, the Caucasus, the Middle East and Africa make it an attractive partner for U.S. businesses. These FTAs increase national income, social welfare, and competitiveness of partner countries in the global economy, establishing a strong business climate that increases investments.
This is partly why more than 1,200 major U.S. companies have chosen to operate in Turkey, including General Electric, Amgen, 3M, Sikorsky Aircraft, Pfizer, Intel, Coca-Cola, UPS, Cargill, Microsoft, Citibank and Ford, to name only a few.
This type of investment and commitment by U.S. companies has had a cascading effect on the whole region. Strong U.S.–Turkey bilateral relations, trade, and investment not only bolster the economy, but can enhance international security and combat terrorism as well. In fact, U.S. Commerce Secretary Pritzker noted during an October 2014 visit to Turkey, “increasing commercial ties is a stabilizing force in any country … by bringing U.S. businesses here ... if they can bring economic opportunity, that is an effective tool to combat terrorism and promote peace.”
With the range of goods that Turkey produces, trade with the United States is primed to continue on a steady rise, as it has been since 2000. For the benefit of both countries’ economies, the key is to ensure that it does.
Turkey and TTIP:
Currently, the focal point of Turkey’s Ministry of Economy is TTIP – the Trans-Atlantic Trade and Investment Partnership. The United States is currently negotiating the TTIP, with the stated goal of expanding free trade between the U.S. and the European Union. Though Turkey is not a full member of the EU, it maintains a strong customs union with EU nations that comprise a large share of total Turkish exports.
This potential partnership is paramount to securing Turkey’s own economic development and democratization process. A viable solution to concerns around the details of the TTIP would be to allow representatives of the country to participate in TTIP discussions, and to help craft the parameters of this integral partnership. There could be a grave cost to the Turkish economy if onerous provisions are included in the TTIP, which is why Turkey continues to seek a seat at the table. To read more about this topic, view the referenced Brookings Report here.