Turkey wants to impose new requirements on textile firms importing material from China, alarming leaders of one of the country’s biggest export industries, three clothing company executives told Reuters.
They said the plans were discussed at a meeting in Ankara on Monday between economy ministry officials and representatives of textile companies, who had requested the meeting to ask that the planned measures be delayed or revised.
An economy ministry official confirmed the meeting at the ministry, without giving details. “We expressed support for production imports from China, but on the condition of bringing value added to Turkey,” the official said.
Turkey’s textile sector is a pillar of its economy. Ready-to-wear clothing accounted for about 18 percent of Turkey’s $157 billion exports last year.
Cuneyt Yavuz, Chief Executive Officer of jeans retailer Mavi , said he believed the government plan was aimed partly at tackling Turkey’s widening current account deficit, which reached $47.1 billion last year.
Turkey imported a quarter of its $10.1 billion textile imports from China in 2017, more than half of which are cotton fabrics and intermediary goods.
“The ministry had a plan to increase the documentation of textile imports from China,” Yavuz told Reuters. “This plan was only regarding the textile sector… and it would go into effect in mid-July”.
He said business leaders at the meeting told the ministry that material imported from China was sold on to other countries such as Russia and the United States, benefiting Turkey.
“I was told that there would be either a postponing or at least a revision in the ministry’s plans” which were originally intended to go into effect in mid-July, Yavuz said.
Another senior textile sector executive who attended Monday’s meeting said the new measures included obtaining documents about the Chinese companies they are buying from, which will add costs and cause delays in trade.
“The ministry undersecretary told us that there is a huge trade deficit with China, where our imports are about 10 times the size of exports,” the executive told Reuters.
“They want some balance. But they understood our concerns and promised to take another look at the proposed measures.”
The chief executive of another major Turkish textile company, confirmed that the ministry had been asking for additional documents for textile imports from July, but said the ministry had been asked to postpone the move until January.
“We had been informed that we would need a lot of extra documents for imports from China, so we demanded this meeting,” said the CEO, whose company has almost 150 stores in Turkey, and exports to seven other countries.
“The ministry didn’t ask us to stop producing in China. It was a fruitful meeting. We asked them to postpone the plan until at least January 2019, which the ministry will evaluate.”
(Additional reporting by Nevzat Devranoglu in Ankara and Ebru Tuncay in Istanbul Editing by Dominic Evans and Toby Chopra)