traders’ penetration to the world’s largest export market remains very limited. Turkey is one of the few countries with which the U.S. has a favorable trade balance: the imports to exports ratio is 2 to 1.
As one of 10 major countries formally designated as “Big Emerging Markets” (BEM) by the U.S. Department of Commerce, Turkey will no doubt continue to be the focus of U.S. efforts to expand bilateral trade and investment. While there was a dip in 1999 as both economies had to digest the financial turmoil, the long-term trends remain highly favorable. Prospects have been enhanced by the U.S. decision to give Turkey more flexibility in certain textile quota categories. As a result, Turkish clothing exports to the U.S. rose by over 50 percent in the first quarter of 1999, at a time when they contracted in other traditional markets. In return, the Turkish government has paved the way for the imports in summer 1999 of the first American live cattle to Turkey in four years.
There are already increasing efforts to maximize the exposure and awareness the American business sector has of the economic opportunities available in Turkey, be it through the organization of trade missions or conferences and information networks. The Turkish Industrialists' and Businessmen's Association (TÜSIAD) opened an office in Washington, aiming to establish channels to exchange information between Turkey and the U.S., and alert public opinion back home to developments that have a direct or indirect bearing on Turkey.
Clearly, the opportunities for foreign investment in GAP are untold, be it in urban planning and construction, or in agribusiness that will dominate the region once the massive irrigation projects are completed. There are major investment opportunities concerning infrastructure projects that are essential to supporting Turkey's economic growth. Impressive, yet vital highway and rail projects have been designed in order to connect Pan-European transport corridors to Central Asia. There are plans for new container ports on northern Marmara, Aegean locations, and east Mediterranean in Mersin and İskenderun. The construction of seven new marinas is planned on a BOT (Build-Operate-Transfer) basis. New terminals are needed for various airports including Ankara-Esenboğa. Huge infrastructure projects are not the only opportunities for U.S. businesses. From fashion to foodstuffs, Turkey is producing large quantities of goods that can be exported throughout the world. The Customs Union with the EU is an added incentive for American companies that wish to invest in the production of goods destined for European markets.
How to Improve the Trade Balance? Most of Turkey's export expansion in the U.S. took place primarily in traditional sectors, which were already well developed. Textiles and apparel, for example, accounted for 30% of the $4.6 billion increase in exports between 1995 and 1997. Agriculture and food products accounted for a further 20%. Although there are some exceptions, like electrical machinery and appliances, which increased nearly 50%, Turkey's exports remain concentrated in the
same core areas as before the EU-Turkish Customs Union6. increasing exports have already been taken.
The easy steps towards
Let’s now consider what more can be done to realize the full potential for growth in the bilateral trade and reduce the large trade deficit currently in favour of the U.S.:
6 While the Turco-American trade volume is currently only 20% of Turkey’s trade with the EU, Turkey's trade with the U.S. has grown more rapidly than trade with other important Turkish markets.