WHAT TO DO IN THE FIELD OF US – TURKEY BUSINESS PARTNERSHIP
PRESENTED BY UMUT ORAN
Washington DC, 2 June 2009
Ladies and Gentlemen,
I am much honored to be here today and share my thoughts on the development of the relations between the United States and Turkey.
During his recent visit to Turkey, President Obama underlined the importance of these relations and he said that ‘‘he came to Turkey to renew our alliance between our nations and the friendship between our people’’.
I sincerely believe that our relations will be deeper if built on the shared values of universal democracy, rule of law and protection of human rights.
If our relations are based on these values, we can better attain our common interests and goals.
One of these goals is working to achieve peace and stability in the region.
We obviously need a social ground to keep a “ model partnership “ alive. This social ground can only be a strong middle class believing in these universal values.
Millions of people in Turkey, white collars or entrepreneurs like me, wish to live according to the same universal democratic standards as the ones shared in DC or Brussels.
Turkey has taken important steps in developing these standards in the last 10 years. But the Mr.Erdoğan government needs to be much more sensitive to the demands and rights of different groups.
Universal democracy takes into consideration the rights of minorities and sees secular democracy as the fundamental element of universal understanding…
Unfortunately, in this area, the Turkish government recently sent some wrong messages to the public. And the prominent business association, TUSIAD, expressed its concern about the authoritarian aspects of its policy.
As Turkey gets richer and democratized, a new Middle Class will rise, having at heart to follow universal secular democratic standards and will thus become the best protector of universal democracy.
Today both our administrations want to build a “ model partnership “ In order to build such a partnership, we need to improve our business relations.
The business relations that I am talking about go far beyond the classical concept of economic relations.
Business and economics are not the same and I am sorry to see that the business relations between US and Turkey are not comprehensive enough.
Recent figures show that Turkish trade with the United States accounted for less than 5 percent of its total trade in 2008. The share of Turkish exports in the US market declined from 10 percent to 3 percent in less than 10 years.
These figures are unacceptable between two allied countries and I believe that there is an unrealized potential for the two-way trade and US investments in Turkey.
It is my opinion that a partnership without business perspective cannot develop into a model partnership. The missing part in our relationship is business, not economics. Turkey has a lot of business opportunities to offer and I would like to speak about the tools available to us in order to use these opportunities.
A first tool is what we call the “Offset” Agreements.
In 1983, the negotiations regarding the supply of F-16 planes to the Turkish Air forces provided that the planes would be assembled in Turkey and that some of the components would be produced in Turkey, this representing the “offset portion” of the deal.
This portion was supposed to grow in volume throughout the duration of the agreement.
This agreement was resented as a model to be extended to other areas of cooperation.
Unfortunately, for various reasons and maybe lack of interest from both parts, this did not happen. F-16 planes are still assembled in Turkey, but there is no offset portion.
A second tool is what is called “Strategic Alliance” Agreements.
We have only one example, it is the agreement between General Electric and Tülomsaş, dated December 30, 2007.
Under this agreement, Tülomsaş is assembling General Electric locomotives in Turkey and 35% of the components are made in Turkey. This part is supposed to reach 50% in a few years.
The difference with the Offset Agreements being that this type of agreement provides for a sharing of the profits, so there is an incentive for cooperation.
This is what makes such agreement “strategic”: both parts have to cooperate in order to create a profit.
Another positive aspect of this deal is that while the Turkish side is a public owned institution, the US side is a private one.
It is a fairly new tool; let us see how it develops.
The last tool is what we call the Qualified Industrial Zone or QIZ.
In my opinion, it has the most significant potential and I will put more emphasis on it.
The QIZ project between our two countries goes back to the year 1999 when negotiations between the US and Turkey started in order to establish QIZs in Turkey. The project, however, never materialized.
While the Jordan QIZ program was extended to all manufactured goods, the version proposed to Turkey excluded clothes, fabrics, leather goods, and shoes and these are Turkey’s main export items to the USA!
Due to the lack of political persistency from both sides, Turkey was excluded from the benefits of such a program while in the same period the QIZs with Jordan and Egypt flourished.
In that period, I mean end of the 90’s, the economic relations between the US and Turkey weakened…
Today, encouraged by the new political climate created by President Obama administration, the two countries have a significant interest for partnership. There are, of course, challenges, one of them being the stabilization of Iraq and let’s limit ourselves to Northern Iraq.
Turkey and the US could launch a QIZ project which would also include the Northern Kurdish part of Iraq. The QIZ social impact being much greater than its economic impact, it would help restore peace and prosperity in the region.
It would greatly contribute to strengthen its security as well as its development.
There would be many benefits from such a project:
1. It would help Turkey in its fight against the PKK terrorism in the southern part of the country as it will create jobs in the region. (GAP region) Sout-East Anatolian Project
2. It would strengthen the business dimension of the Turkish-US relations.
3. It would help the development of the private sector in Northern Iraq.
4. It work help also dialog with Israel to have input for production from that region
I therefore think that all the efforts of our business communities should focus on the development of such a smart project which will bring smart pover –as the lacksmith
which will open many problems such as ( security, social, political, economical, regional, international)
At the end of this presentation, I would like to refer to former President Harry Truman’s words.
He once said that “America was not built on fear. America was built on courage, on imagination, and unbeatable determination to do the job at hand.”
Following his vision, we need to build and strenghten our countries relations with courage, imagination and unbeatable determination to do the job at hand.