Enhancing Сommercial Ties With Turkey With a View Toward Creating a Free-Trade Area
2012 05 16
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Ukraine started 2012 with a bounce in trade as it saw its exports grow by 14.5 percent in the first month of the year. The revival is a welcome sign for the country which, like many others, was hit hard by the world financial crisis. As part of its attempts to increase its trade, Ukraine is making overtures to its sea neighbor, Turkey. Said Ukrainian President Viktor Yanukovych last year: ‘‘We are entering a new stage of relations between Turkey and Ukraine as countries that have stable, predictable partnership relations". The two countries have a long history. Turkey forged good relations with Ukraine before it became part of the Soviet Union. It was also one of the first countries to recognize Ukraine when it became independent in 1991. While trade between the two is already strong, there are moves to increase that. The two countries created a high-level Strategic Council and announced the start of talks in December on introducing a free-trade area and visa exemption. ‘‘We consider it possible to increase bilateral trade to $20 billion by the end of 2015 and to $40 billion by 2020,’’ said Turkish Prime Minister Recep Tayyip Erdogan. In 2011, the two countries had a trade turnover of $5 billion, a drop from the high figure of $6.5 billion in 2008, but nevertheless a figure on the rise after the $3 billion low of 2009. Turkey is Ukraine’s sixth-biggest trade partner, receiving 3.2 percent of Ukrainian exports. Most of Ukraine’s exports go to the Commonwealth of Independent States, made up of 12 former Soviet states, and to the European Union. Representing a total population of 120 million, a free-trade area between the two countries would create a huge market. It would also give Ukraine better access to other markets through Turkey. ‘‘It is extremely advantageous for us to continue to develop trade and economic relations,’’ the Ukrainian ambassador to Turkey, Serhiy Korsunsky, said late last year". We have started negotiations on the agreement on a free-trade area. Turkey is an ideal bridge for us to the Middle East and Arab countries". The Middle East is an attractive market for Ukraine, with its exports of arms, steel, high-tech aviation and agricultural produce. Ukraine, meanwhile, is important as a transit point for Turkey to markets in northern Europe, Russia and Central Asia. Ukraine currently exports steel products, mineral fertilizers, and chemical and agricultural products to Turkey. Turkey is an important exporter to Ukraine, sending its food products — especially fruit and nuts — cars and clothes. Ukraine and Turkey have noticeably increased their diplomatic engagement. Ukrainian Foreign Minister Kostyantyn Gryshchenko visited Turkey four times in 2011, and President Yanukovych made a one-day visit in December. The two countries have cooperated before, as both are part of the initiatives of the Black Sea Economic Cooperation Organization. In May 2010, the two countries signed an action plan aimed at developing bilateral relations. The most recent move came in March, when Mykola Azarov, the Ukrainian prime minister, announced that Turkish companies investing in tourism would be exempt from taxes and that taxes on exports from Turkey would be reduced. ‘‘We are inviting Turkish investors to invest in Ukraine", said Azarov at a meeting in Istanbul. Taxes on Turkish imports have been reduced from 20 percent to 14 percent, he said. There are currently 128 Turkish projects in Ukraine and a total of about $1 billion in Turkish investment in the country, a figure that could be vastly increased if Turkey, a country that has far more experience in the tourism market, can be attracted to develop the sector in Ukraine. One other measure suggested by Ahmet Bulent Meric, the Turkish ambassador to Ukraine, is for a new ferry service between the two countries, linking the ports of Yalta in the Crimean peninsula and Sinop in northern Turkey. The two countries are also set to cooperate in energy, transportation and the defense industry. Energy cooperation was discussed at the Strategic Council in December, and Turkey is set to join the Ukrainian-Belarussian-Lithuanian train transportation project, which would grant it access to the markets in the Baltic Sea area. Turkey is also planning to use Ukraine’s well-known Dnipro space launchers for its satellites. In addition, there are possible plans for cooperation on a new tank, according to Nataliya Novakova, an analyst at the Penta Center of Applied Political Studies in Kyiv. ‘‘Ukraine will benefit in the long run by moving now to strengthen its strategic relations with Turkey," she wrote last year. New York Times All news
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