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Crisis with Turkey may lead to loss of $1B
Figures for first half of 2011 show surprising surge of 40% in exports to Ankara on backdrop of political crisis, reaching $950 million. Chamber of Commerce president concerned about Turkey's threat to sever ties with Israel, says 'government must find a formula to uphold relations'
The surge in exports places Turkey as Israel's sixth largest export destination with the highest growth in export volume – 72% compared with the same period in 2010.
Figures show that the main exports are chemicals and oil distillates, which constitute about 68% of Israel's exports to Turkey.
More on Israel-Turkey crisis:
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Netanyahu to Clinton: No apology to Turkey
Turkey: UN delays Palmer Report
Uriel Lynn, president of the Federation of Israeli Chambers of Commerce, commented on the figures Monday, saying that "if Turkey carries out its threat to sever diplomatic ties with Israel due to Israel's refusal to issue an apology for the flotilla events, the trade relations between the two countries will be severely damaged.
"We hope that the Israeli government skillfully finds a way to restore relations with Turkey."
Lynn explains that the growth in exports to Turkey stemmed from the fact that "the diplomatic crisis led to a standstill in the diplomatic ties, but Turkey did not resort to extreme measures. Its business sector did not feel committed to the government in the crisis because the government did not demand such a commitment."
Business as usual
Other voices from the business sector are more optimistic. Sam Donnerstein, owner of security doors and locks manufacturer Rav Bariach, whose exports to Turkey stand at NIS 6 million (about $1.7 million), told Calcalist that he did not believe the ties would be severed.
In the past year the company's business with Turkey more than doubled, although, according to Donnerstein, his Turkish customers are well aware that the company is Israeli.
Other companies engaged in business with Turkey say that although their Turkish clients know they are dealing with Israeli companies, business is as usual.
Regarding the defense Industry, a split between Israel and Turkey will have no substantial effect on the industry. Israel's defense exporters to Turkey include Elbit and the Israel Aerospace Industries.
A senior defense establishment official told Calcalist that "on the backdrop of the events in the past two years, statements issued by (Turkish Prime Minister Recep Tayyip) Erdogan and his warming relations with Iran, the defense system estimates that Turkey will cease to be a strategic asset for Israel's defense industry. Some voices within the industry are even calling for limited trade agreements with Turkey".
Click here to read this report in Hebrew
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