Turkey:
Market Briefing
John Fay
Commercial Attaché
U.S. Embassy Ankara
U.S. Department of Commerce | International Trade Administration
Turkey “In the middle”
U.S. Department of Commerce | International Trade Administration
“Three Turkeys”
Western
Turkey
•Highly
Industrialized
•Mostly urban
•Historical seat
of trade &
industry
Central
Anatolia
Eastern
Turkey
•Newly
emerging
industrialists –
Anatolian Tigers
•Less
Industrialized
•Significant
growth in
production,
exports
•Agricultural focus
•Mostly rural
•Less than 1% of
Tax Revenue
U.S. Department of Commerce | International Trade Administration
Turkey: Snapshot
•
Turkey: the most eastern country in the West, the most western country in the
East.
•
Turkey: A country in rapid transformation politically, economically,
demographically, socially.
•
Turkey playing increasing regional and international political and economic role – G20 member;
•
Strong position of ruling AKP Party (2002), but opposition vocal;
•
Key constitutional reforms hottest political issue, as well as foreign policy issues such
as Syria, Libya, Arab Spring;
•
Growing economy puts Turkish interests in play in former Soviet Union, Middle East
and Africa;
U.S. Department of Commerce | International Trade Administration
Turkey: Snapshot
•
Sixteenth largest economy in world. G-10 goal by 2023. Turkish construction
sector accounts for 30% of GDP. Politically influential.
•
Economy tripled in the last 10 years to over $750 billion; 8% growth in 2011, (first)
engineered soft landing in 2012 with 3.5% expected growth for 2012; 2013-2015
average forecast is 3-4%. GDP per head $3k in 2002, $10k today.
•
Increasingly export-oriented economy also raises demand for imports in capital
goods and technology – sweet spot for American exporters;
•
Recent upgrade to investment grade rating by Fitch, first time since 1994, but
clouds remain with current account deficit and regional instability
•
Continued efforts to accede to European Union although questions remain on how
to pay for improved infrastructure
U.S. Department of Commerce | International Trade Administration
Turkey: Economic
Snapshot
•
General exchange rate stability at 1.8TL: 1 USD; forecast 1.8-1.85TL into 2014.
Inflation (10%) watched closely.
•
Record $20 billion bilateral trade relationship in 2011, up 38% from previous
year and doubling U.S. exports to $15 billion. Small downturn in 2012 due to relative
economic slowdown; growth forecast for 2013 with expanding economy.
•
BB+ Fitch Rating (just below investment grade, watching current account deficit and
inflation);
•
Growing import market and expensive energy imports create large current account
deficit;
•
Lessons learned from 2001 crisis; banking sector strong and well-regulated;
U.S. Department of Commerce | International Trade Administration
U.S.-Turkish Relations
• Strong political/defense relationships with long-standing
NATO ally;
• Cooperation across a spectrum of common interests:
Iraq, Afghanistan, Arab Spring;
• April 2009 President Obama visit called for closer
economic/commercial relationship;
• G2G an B2B councils created to develop strong bilateral
trade links;
• 40% plus growth in bilateral trade for first eleven
months of 2011 (vs. 2010); 40% plus increase in U.S.
sales in Turkey;
U.S. Department of Commerce | International Trade Administration
Business Case for
Turkey
• Increasingly affluent population (per capita GDP from
$3k (2002) to over $10k (2011);
• Economic growth backed by strong demographics,
trained work force;
• European Union Customs Union;
• Location, Location, Location: Use Turkey as springboard
into regional markets;
• Weakening lira a short/medium term challenge for U.S.
exports;
• Strong interest in U.S. technology, management, global
relationships, trade/project finance
U.S. Department of Commerce | International Trade Administration
Business Case for Turkey
• 2010: U.S. Exim announces $1 billion credit line for
energy projects in Turkey;
• Over 1,200 American firms registered in Turkey.
Two active American Chambers of Commerce (ABFT and
TABA).
• Identified as priority market by U.S. Department of
Commerce; growth in staff and resources to help
American firms enter market/secure greater market
share;
U.S. Department of Commerce | International Trade Administration
Turkey SWOT Analysis
Strengths/Weaknesses
o
o
o
o
o
o
Opportunities/Threats
S: Political stability, growing
economy, “thinking big”
Increasing domestic consumption,
deeper pockets
Long-term partnership with U.S.,
desire to deepen trade ties
W: Regional tensions and soft EU
market present challenges to
export-led growth
Foreign direct investment still
relatively low given size of
economy
Turkey still largely unknown to
U.S. firms and vice versa
o
o
o
o
o
o
o
O: Import market will continue
to expand; technology play
Turkey as platform for regional
plays, infrastructure development
Trade finance to seal the deal
2013-4: project bonds/pension
fund activity?
T: Regional instability affects
investor perceptions/decisions
EU Accession talks falter/tension
over possible transfer to
Presidential system in 2014
Inability to reach financial close
on key projects.
U.S. Department of Commerce | International Trade Administration
Best Prospects for
U.S. Exporters
•
•
•
•
•
•
•
•
•
Energy, including traditional and renewable sources
Defense and aerospace
Infrastructure
Information and telecommunications
Safety and Security
Healthcare
Automotive parts
Plastics
Education and Training services
U.S. Department of Commerce | International Trade Administration
Map of U.S. Investment in Turkey
Note: Given concentration of industry in northwest Turkey, map not necessarily geographically representational.
Trade and Project Finance:
Key to Success in Turkey
•
Given strong Asian and European competition, U.S. firms need to bring competitive
financing options to front end negotiations with Turkish partners;
•
Some Turkish firms will offer 30/60/90 day terms however export credit insurance
and other trade finance options (public and private) can sweeten the deal;
•
U.S. Export-Import Bank: Turkey as third largest market after Mexico and India;
•
Overseas Private Investment Corporation: developmental projects
•
U.S. Trade and Development Agency: front end feasibility study financing;
•
U.S. Commercial Service network of relationships with local and U.S. banks
U.S. Department of Commerce | International Trade Administration
U.S. Commercial Service
Our mission:
• To promote the export of goods & services from the
United States, particularly by small- and medium-sized
businesses
• To represent U.S. business interests internationally
• To help U.S. businesses find qualified international
partners
Presence in over 100 U.S. cities and 70 countries worldwide
U.S. Department of Commerce | International Trade Administration
Helping Your U.S. Firm
Succeed in Turkey
•Business Development Advisory
•Project and Policy Advocacy with the Turkish
Government
•Due Diligence on Local Partners
•Relationships with Local Banks and U.S. Trade and
Project Financiers
•Project Vetting and Identification
•Strategic Partnering
•Market Research
•Corporate Communications and Company Promotions
U.S. Department of Commerce | International Trade Administration
Thank You!
John Fay
Commercial Attaché
U.S. Embassy Commercial Service
Ankara, Turkey
Direct Tel: + 90 312 457 7188
E-mail: John.Fay@trade.gov
Web: http://export.gov/turkey
Irvine USEAC
Tel: 949-660-1688
Email: Office.Irvine@trade.gov
Web: http://export.gov/california/irvine/index.asp
U.S. Department of Commerce | International Trade Administration
Annex I
•Maps
•Service Brief Slides
U.S. Department of Commerce | International Trade Administration
US Exports to Turkey by State
UNITED STATES
$14,657,438,498
Texas
$3,627,607,729
Washington
$1,759,612,846
New Jersey
$1,484,752,302
Louisiana
$937,426,720
New York
$740,962,512
California
$665,691,913
Georgia
$610,037,139
Connecticut
$445,820,715
Florida
$408,942,420
Pennsylvania
$396,875,110
Free Zones in Turkey
• 21 Free Zones
• Advantages:
– 100% corporate tax exemption for manufacturing companies
– No customs duties for goods, equipment and machinery brought
into the Zone
– Warehousing for unlimited time in a customs free area and
ability to sell in Turkey immediately upon demand
– Opportunity to buy Turkish products at export prices without
Value Added Tax (VAT)
– Minimum bureaucracy
U.S. Department of Commerce | International Trade Administration