Following President Recep Tayyip Erdoğan’s visit to Berlin in late September and the bilateral ministerial level meetings in September and October, steps to improve Turkish-German economic ties have been accelerated. During his visit, Erdoğan and German Chancellor Angela Merkel agreed to re-operationalize some of the cooperation mechanisms that have remained inactive for a while.
German Economic Affairs and Energy Minister Peter Altmaier visited Turkey on Oct. 25 for the Turkey-Germany Joint Economy and Trade Committee (JETCO) meetings, after which the two sides gave momentum to projects that will upgrade bilateral economic relations.
As part of the JETCO mechanism, five working groups have been established. The first one of these groups, the “Trade Working Group” will work to expand bilateral trade volume between Germany and Turkey under the coordination of the Turkish Union of Chambers and Commodity Exchanges and Association of German Chambers of Industry and Commerce (DIHK).
Germany is the top destination for Turkish exports, making it Turkey’s biggest trading partner. Bilateral trade between Turkey and Germany in 2016 totaled $35 billion. Turkey’s exports to Germany amounted to $13.9 billion, while imports were $21.4 billion. Bilateral trade between the countries increased, reaching $36.4 billion in 2017, according to data compiled by the Turkish Statistical Institute (TurkStat).
Last year, Turkish exports to Germany rose to $15.1 billion and imports from Germany fell slightly to $21.3 billion.
During the January-November period this year, Turkey’s exports to Germany rose to $14.6 billion, a 7.95 percent increase compared to the same period last year.
The second group is the “Industry Working Group” to be operated by Turkish Industry and Business Association (TÜSİAD) and Federation of German Industries (BDI). The first meeting of this group will be held in Berlin on Jan. 15. The group will concentrate on the development of cooperation for Industry 4.0 and exchange of experience and will consist of five sub-groups to specialize in automotive chemicals, textile, machinery and the automotive supply industry.
Another working group of Turkish-German JETCO will focus on projects related to infrastructure. The Turkish Contractors Association and the Economic Affairs and Energy Ministry department that is responsible for Germany’s export loans, Hermes, will cooperate in the group.
In due consideration of the high tourism potential between the two countries, a working group to boost tourism has been established to be administered by the Association of Turkish Travel Agencies and the German Tourism Association (DTV).
Closely following Turkey’s Africa Initiative and China’s commercial success in the continent, Germany is willing to cooperate with Turkey to do business in African countries. To that end, a working group that will focus on cooperation in third countries has been established under JETCO. Turkey’s Foreign Economic Relations Board (DEİK) and the German Near and Middle East Business Association (NUMOV) will ensure coordination of the working group and launch projects to enable Turkish and German businesses to form partnership in third countries.
The German Economic Affairs and Energy Ministry has been reported to send letters to the relevant parties to operationalize the working groups.
According to a report by Anadolu Agency (AA), the Germany Economic Affairs and Energy Ministry has also initiated a study to identify the problems in the modernization of the Customs Union with Turkey and provide solutions. While the study will last one year, Germany will also work to convince Austria and the Netherlands that do not approve upgrading the agreement.
As the only non-European Union member country that has had a customs union agreement with the EU since 1996, Turkey has been one of the largest trade partners of the union with an export value of 69.8 billion euros ($79.2 billion) and an import value of 84.5 billion euros in 2017 in goods alone.
In its Dec. 21, 2016, assessment, the EU Commission proposed the modernization of the current deal, which only covers a limited range of industrial products and excludes agriculture, public procurement and services.
Highlighting that the upgrade of Turkey-EU trade relations forms an essential part of efforts made by Turkey and the EU to deepen relations in key areas of common interest, the commission reiterated its resolution to continue delivering on the commitments it has made as part of the deal with Ankara.