As normalization gains momentum, Turkey is preparing to expand the scope of Free Trade Agreement (FTA) with Israel according to Turkish government sources.
Under the current FTA, dated March 14, 1996, numerous trade-related areas including sanitary and phytosanitary measures, internal taxation, balance of payments, public procurement, state aid, intellectual property rights, anti-dumping, rules of origin and various safeguard measures are addressed. The stipulations of the agreement on industrial products, all the customs taxes and charges that have an equivalent effect were abolished on Jan. 1, 2000. Regarding agricultural products, Turkey and Israel granted each other unlimited tariff elimination or reduction and/or tariff reduction or elimination in the form of tariff quotas for some agricultural products originating in the other party. Furthermore, in 2006 and in 2007 both parties revised the list of agricultural products that are granted preferential treatment under the original agreement.
Israel is one of the top 20 countries with which Turkey actively conducts foreign trade. According to data released by the Turkish Standards Institute (TurkStat) on foreign trade in November, the total volume of Turkish exports to Israel is valued at approximately $2.7 billion for the January-November 2016 period, recording a 9.2 percent increase compared to the same period of the previous year. Moreover, the monthly export volume to Israel in November increased by 8.8 percent compared to November 2015, reaching around $240 million.
Talks on expanding energy collaborations between the two countries also top the economic agenda of both countries as a potential pipeline that could be built through Turkey to carry petroleum gas from the Mediterranean to Europe is deemed highly lucrative for Israel, compelling both countries to expand the existing FTA in another indication that normalization continues to gain momentum.
High Level Visits
According to Turkish government sources, political consultations will continue to be held under the leadership of the foreign ministers of both countries which will include bi-lateral ministerial visits to accelerate some critical sectors including the economy, tourism and energy which have the potential for rapid growth.
Noting that in the wake of the Mavi Marmara incident relations between the two countries have continued unabatedly in the sectors of culture, tourism, trade and sports – despite being disconnected politically and militarily – the official stated that prior to the normalization process, the bilateral trade volume increased from $2.5 billion to $5 billion, proving that both parties need each other. The official stressed that the fields of defense and the military will definitely be brought to the agenda in the coming period, citing former relations between the countries in those areas.
Stating that there is high potential for development with regards to the economy in the future, the sources said: “We have a free trade agreement. We want to update it, increase its depth and expand its scope. It’s important to us. Because the two countries are complementary to each other.”