Turkey‘s relatively weak trade with the U.S. doesn’t add up with the strong strategic and political relationships the two countries enjoy, Turkish Trade Minister Zafer Caglayan said in Atlanta July 22.
“I have trouble explaining how the low volume of trade doesn’t go well with our friendship,” Mr. Caglayan said at a dinner hosted in his honor at the World of Coca-Cola.
The minister was leading a delegation that included the heads of major Turkish export associations. The group visited Chicago, Los Angeles, Houston and Atlanta. Georgia is one of six U.S. states the Turkish government is targeting for more trade and investment.
A nation of nearly 74 million people, Turkey’s gross domestic product grew by 11.7 percent in the first quarter of 2010 over the same period a year ago, trailing only China as the world’s fastest growing major economy during that period.
A regional powerhouse at the crossroads of Asia and Europe, Turkey has been successful at luring the likes of Coca-Cola Co., Microsoft Corp. and other large multinationals, which use the country successfully as a base. Coke, for instance, runs its operations for Europe, the Middle East and Africa, 93 countries in all, from Istanbul.
Turkey is also a strong market for Coke. The Atlanta-based beverage giant has invested $1 billion in the country and now has 3,000 employees there, Turkish-born Coca-Cola President and CEO Muhtar Kent said at the dinner.
After economic reforms helped foster stability and rein in inflation, Turkey attracted $25 billion in foreign investment from 2002-09, $10 billion more than it had in the prior 30 years combined, Mr. Caglayan said. At the same time, Turkey has become an even more vital strategic ally as the U.S. uses it to launch troops, planes and goods supporting the war effort in Iraq.
But these developments haven’t led to proportionate increases in trade flows between the countries. Their total trade was a little under $11 billion in 2009, with Turkey’s exports to the U.S. accounting for just $3.6 billion, according to U.S. Census Bureau figures.
By comparison, Turkey’s exports to nearby Israel, which has a smaller population than the state of Georgia, totaled $1.5 billion, Mr. Caglayan said at a breakfast briefing Friday that drew 140 people at the World Trade Center Atlanta. And 60 percent of Turkey’s exports go to Europe, where Turkish firms enjoy preferential customs access for certain products.
There’s definite potential for more U.S.-Turkey trade, said Tamer Cavusgil, director of the Institute of International Business at Georgia State University.
The problem has been that Turkish firms have gone after “low-hanging fruit” closer to home because they have perceived the U.S. market as too difficult to crack, Dr. Cavusgil said. They don’t understand the significant time and investment it takes to build trustworthy brands in the highly competitive U.S market, especially for consumer products.
“(Turkish companies) are more opportunistic and short-term oriented, rather than long-term oriented and strategic. You really can’t do well in the U.S. market unless you have a sustained approach,” Dr. Cavusgil, who is of Turkish descent, told GlobalAtlanta.
The misunderstandings go both ways, he said.
“We can say the same thing about American firms,” Dr. Cavusgil added. “Turkey always gets overlooked, and it’s got a lot more potential for American firms as partners.”
Mr. Caglayan emphasized Turkey’s role as a gateway to Eastern Europe and said his country is the “shortest shortcut” for U.S. business in Africa. While touting proximity to the European market, he contrasted the country’s young labor force with what he characterized as an aging, expensive and less-ambitious workforce in established European economies like France.
Georgia is one of Turkey’s top trading partners among U.S. states, and its role is growing. The state exported $400 million worth of goods to Turkey in 2009, a 28.7 percent increase over the previous year.
The relationship will only grow as the two sides get to know each other better, Mr. Caglayan said.
“We will get together more frequently after this week and there will be more trade missions of this kind,” he said.