Recep Tayyip Erdogan’s Turkey has announced that it will impose trade restrictions on Israel, which will include various products such as cement, steel and iron construction materials.
The Commerce Ministry announced this decision in response to the ongoing conflict in the Gaza Strip. However, experts believe that a long-term and comprehensive ban on trade with Israel will negatively affect Ankara’s economy, posing challenges to the government’s popularity and that its implementation is therefore doubtful. “This decision will remain in force until Israel immediately declares a ceasefire and allows sufficient and uninterrupted flow of humanitarian aid to Gaza,” the Turkish Trade Ministry said.
Israel, in response, stated its intention to draw up an “extensive” list of Turkish goods to be banned from importation. In addition, Israel plans to support in Washington and worldwide the movement of other countries to punish Turkey for its actions. Turkey has drawn up a list of 54 products that will stop being exported to Israel.
Professor Elis Brezis, head of the Azrieli Economic Policy Center at Bar-Ilan University in Ramat-Gan, near Tel Aviv, explained the extent of the importance of Turkish exports to Israel. He said Turkish exports to Israel amounted to $4.6 billion in 2023 and $6.8 billion in 2022, while total imports to Israel are $110 billion. “So Turkish exports are 6% and specialize in raw materials such as metals and iron (20%), construction materials (50%) and agriculture (9%) of low quality, but very cheap,” he added.
On her part, dr. Lucretia Leon Savasta, an expert on Middle East and Eurasia issues, said she doubted a blanket ban would be implemented immediately. Instead, he sees Turkey’s public announcement as a political move to pressure Israel and get more countries to join. Savasta adds that, typically, in such cases of trade bans, the ban starts with a limited percentage of the goods listed. “We have to remember that in these 54 products listed by Turkey are iron and steel and these are the main products that Israel bought,” he said, adding that with the current economic situation in Turkey and the inflation of the Turkish lira . “I don’t believe they will stop the complete export of these products to Israel,” he continued. Therefore, he argues that if Israel or Turkey tried to punish each other through a trade freeze, it could not be done without adversely affecting their economy.
“Let’s just focus on the fact that, very smartly, Turkey has not said that it will stop importing goods from Israel,” he said, noting that in 2022, Israel was among the top 5 countries from which Turkey imported refined oil. That’s why he says a total ban is not sustainable for the Turkish government. “The country is facing a kind of internal fragmentation. Look at the last elections and how Erdogan lost big cities and when the economy is affected negatively, the general discontent grows. It can be dangerous for the central government,” he argued. In addition, he notes that Turkey is very “money-oriented” and its decision-making is usually very well calculated financially. “It’s hard to think that they would make a decision that could hurt their financial situation. The elites would not allow that to happen,” he argued.
Brezis says that if the proposed Turkish ban on 54 products comes through, the impact on Israel will be mainly in the construction sector. However, he notes that since October this branch has been operating at a slow pace, due to a lack of workers. “The Palestinians [από τη Δυτική Όχθη] are not allowed to come and work in Israel, and the migrant workers from India and Taiwan who have to come, they don’t get permits in time,” she said. “Cement is an interesting story,” Brezis said, explaining that the Nesher industry had a monopoly on cement for decades until Israel opened the gates to imports from Turkey. “So it will be interesting to see if Nesher can compete with imports from other countries,” he continued.
As for other construction materials, such as ceramics, Brezis says that if the ban is implemented, the materials will arrive from China, which means higher transport costs and thus higher prices. However, he stresses that the worst outcome is the announcement itself rather than an actual embargo, as it may influence other countries to do the same. “If the embargo is imposed, it will have a strong impact on [ισραηλινούς] importers from Turkey and, in the short term, at certain prices, but it is not certain that the embargo will be enforced,” he said. “It may just be a political announcement without actually being enforced. So we have to see what happens in the next few weeks,” he continued.
Savasta explains that if the ban passes, Israel can still import most of the products. “In these cases, other bordering countries will usually be the longest way to get the same products,” he said. “We must remember that when one country faces a ban, other countries are ready to take advantage of the situation,” Savasta continued, citing the case of bans in Russia, after which many goods stopped being exported directly to Russia, but reached the Russian territory, through Kazakhstan.
P.K.
