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Turkish PM Erdogan pressured to avoid further escalation so as not to affect defense contracts
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Exporters fear losing Turkish market
Chairman of the Federation of Israeli Chambers of Commerce says escalating crisis with Ankara could 'cause heavy damage to our industry'. Israel may lose important trade partner, leading to dismissal of hundreds of workers, he warns
The escalating crisis between Jerusalem and Ankara could cause heavy damage to the Israeli industry, Chairman of the Federation of Israeli Chambers of Commerce Uriel Lynn has warned.

 

"If the Turkish authorities decide to sever their trade relations with Israel, we will lose an excellent and important trade partner. So far, despite the crisis, the trade relations between the two countries have not suffered," Lynn told the Yedioth Ahronoth daily on Sunday.

 

Israel-Turkey crisis - Ynetnews coverage:

 

A decision to end these trade ties may lead to the dismissal of hundreds of workers in factories producing products exported to Turkey at high volumes.

 

The overall volume of trade between Israel and Turkey is expected to reach $4 billion this year, after totaling $2 billion in the first half of 2011 – a 26% rise compared to the first half of 2010, when the volume of trade between the two countries amounted to $1.59 billion.

 

The first half of 2011 saw exports to Turkey increase by 39%, from $648 million to $950 million. Imports rose by 16%, from $907 million to $1.05 billion.

 

The Israel-Turkey trade volume makes up almost 3% of all Israeli trade this year. In 2010, the trade volume totaled $3.1 billion, following a 26% rise compared to 2009 – when it stood at $2.5 billion.

 

Turkey is Israel's sixth leading export destination, with the chemicals and oil distillates industry making up more than half of Israeli exports to the country and metals constituting about 11%. Another prominent industry in Israel's exports to Turkey is agricultural produce.

 

According to the Israeli Credit Insurance Company (ICIC), however, Turkish clients' debts to Israeli exporters stand at more than $350 million. ICIC CEO David Milgrom has warned that a Turkish decision to sever trade ties with Israel may lead to the non-payment of these debts.

 

Israeli knowledge to reach enemy states?

Turkey's announcement that it was suspending its defense agreements with Israel did not take the Israeli defense industry by surprise. A decade ago, Turkey was the biggest foreign client of Israeli weapons and intelligence means, but its purchases in Israel diminished after the Islamic party rose to power and following the Defense Ministry's growing fears that Israeli security knowledge would be leaked from Turkey to enemy states.

 

No major arms deals were signed in the past few years, although Israel continued to deliver weapon systems ordered earlier, including RPVs produced by the Israel Aerospace Industries, which the Turks have been using in their war against the Kurds.

 

Nonetheless, Turkey still has maintenance agreements with the Israeli defense industries. Without the support of Rafael, Israel Aerospace Industries and Elbit, the Turkish army will find it difficult to use these systems in the course of time.

 

A complete annulment of Turkey's military agreements with Israel will affect these contracts, which are Israel's way of pressuring Turkish Prime Minister Recep Tayyip Erdogan to avoid any further escalation in the relations between the countries.

 

Udi Etsion and Navit Zomer contributed to this report

 

 

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