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Turkey Wants in on T-TIP

The US and Turkey haven’t yet committed to a free trade pact, but the two nations are steadily working on their relationship.

As part of a trade mission, Istanbul Textile & Apparel Exporters’ Associations (ITKIB) and Istanbul Ready-Made Garment Exporters’ Association (IHKIB) held an event in New York last week with the goal of connecting Turkey’s textile industry with US brands and retailers.

In a letter to USA-ITA, IHKIB Chairman Hikmet Tanriverdi, wrote, “Pioneers in the implementation of the strictest environmental and sustainable policies in the world, Turkish manufacturers also provide maximum guarantees of quality, competitiveness and efficiency in logistics due to Turkey’s privileged geographic position at the crossroads between East and West.”

But that privileged geographic position hasn’t gotten Turkey a trade deal with the US yet and with the US-EU Transatlantic Trade and Investment Partnership (T-TIP) talks underway, Turkish leaders fear exclusion from the agreement could adversely affect the country.

Under the proposed T-TIP, all tariffs on trade between the US and EU would be eliminated.

Because of Turkey’s existing Customs Union with the EU, which eliminates duties and restrictions on goods traveling between the two entities, being left off the T-TIP list could create a decline in Turkish exports to the US.

While no specific impact studies have been done to determine just how exclusion from T-TIP would affect Turkey, a Brookings Institute fellow, in partnership with the Turkish Industry and Business Association (TÃœSÄ°AD), published a comprehensive report on Turkey-T-TIP talks in early September.

The report, titled “Turkey and TTIP: Boosting the Model Partnership with the United States”, written by Kemal Kirisci, brings up one study commissioned by the German Federal Ministry of Economics and Technology that addresses who might benefit and suffer under the T-TIP.

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According to the report, “countries with which either the EU or the United States already enjoy free trade agreements [would be] the main losers. For example, Canada and Mexico, both with preferential trade agreements with the U.S. and EU, would experience income losses corresponding to 9.48% and 7.24% respectively, while Turkey’s potential loss is put at around 2.5%. For Turkey this would amount roughly to a $20 billion loss of income based on Turkey’s GDP in 2012.”

Whether or not these numbers are an accurate prognosis of potential post-T-TIP trade, Turkish leaders say omission from the pact can’t be good for the country unless Turkey can work out its own free-trade deal with the US.

In May this year, the US and Turkey established a bilateral High Level Committee (HLC) led by the Ministry of Economy of Turkey and the Office of the U.S. Trade Representative with the goal of strengthening economic relations and liberalizing trade between the nations and to explore how Turkey might be affected by the T-TIP. The HLC is continuing to work on identifying areas for collaboration.