ECONOMY

Turkey, Italy look to further strengthen commercial ties with more investments, trade

Turkey and Italy have enjoyed close commercial and economic ties over the years with incrementally growing trade and investments. The opportunities the Turkish economy is offering for investors has once more been emphasized by the Head of the Italian Chamber of Commerce in Turkey Livio Manzini.

In particular reference to Turkey's huge domestic market and its role in the broader region, Manzini underscored that the country is a very advantageous place to do business in.

Turkey is ranked 43rd in the World Bank's Ease of Doing Business list for 2019, climbing 17 places compared to the previous year. According to the Doing Business 2019 – Training for Reforms report, Turkey received 74.33 points out of 100, improving 4.34 points since last year. New Zealand, which topped the list, scored 86.59 points. Reforms carried out in 2017 accelerated Turkey's efforts to improve the business climate for domestic small and medium-sized enterprises (SMEs).

Manzini noted that Italy is the second-largest industrial country in Europe in a statement to Anadolu Agency (AA). He iterated that Turkey wants to be engaged in production toward industrialization and that the two countries complement each other in this regard.

Stating that Turkish and Italian supply chains are very close and integrated with each other, Manzini recalled that the trade volume between Italy and Turkey is $20 billion. "When we look at imports and exports, Italy is the fifth-largest partner of Turkey, however, excluding energy, for instance the gas bought from Russia, it becomes the third-largest foreign trade partner of Turkey," he added.

Pointing out that it is even more important that imports and exports are very close to each other, Manzini said: "This means that we have balanced foreign trade. For instance, as far as Turkish-Chinese trade volume is concerned, a total of $3 billion out of the total $23 billion trade volume is in Turkey and $20 billion is in China. However, Turkish-Italian trade volume is balanced at $10 billion on both sides."

The chairman said that Turkey's exports to Italy surpassed its imports from the country in the first month of the year. Indicating that a balanced trade relation accompanies sustainability, Manzini added that the balance also shows how deep relations are.

Manzini emphasized that relations will remain superficial without mutual trust being ensured, saying that the mutual trust between the businesspeople of both countries is one of the elements enabling relations to intensify further.

Manzini stated that economic relations between the two countries were based solely on trade in the past; however, investors from both countries have started investing capital for a few years now.

Recalling that Italy's investments abroad started before those of Turkey's since it was industrialized earlier, Manzini expressed: "Now, however, we see Turkish companies have also started investing abroad. In other words, Turkey started exporting capital to other countries, with one of them being Italy. Turkish companies continue to invest more in Italy. This again leads to a high level of relations."

Highlighting that Italy has opportunities for Turkish companies, Manzini said that this is because the Italian business world is based largely on SMEs. "The structure of the Turkish business world is also based on SMEs somehow. In a market like Italy, Turkish investors can either do joint work or find business opportunities, as the way of doing business is the same," he said.

Updating the

customs union

Manzini also answered questions regarding the process of updating the customs union agreement, saying that the Italian Chamber of Commerce in Turkey supports the updating of the deal. He continued: "We support the modernization of the customs union agreement and its adaptation to today's conditions. Let us note that this was an interim agreement. Turkey would set out to the full integration into the EU with this agreement. However, since this full integration was delayed, the shortcomings of the customs union agreement came to manifest themselves." Underlining that the modernization of the customs union agreement will benefit both parties, Manzini stated that it will also contribute to the gross domestic product (GDP) of both countries. Indicating that the agreement has become an instrument for politics, Manzini said: "I think there is a political deadlock at the moment. This is because no one technically says "no" to updating. Obviously, this is a process that will bring additional added value to both parties. Unfortunately, it is not progressing much right now."

The modernization of the customs union between Turkey and the EU has been on both parties' agenda for more than two years now. Although they have expressed the will to take steps to update the agreement, as it will be advantageous for both sides, no concrete development has so far been taken. Yet, efforts to maintain dialogue continue, with particular emphasis on the benefits it will yield for both sides.

Turkey is the only non-EU country that has had a customs union agreement with the bloc – inked back in 1966. Turkey has been one of the largest trade partners of the EU with exports worth $84 billion and imports of up to $80 billion in 2018 alone.

In its Dec. 21, 2016, assessment, the EU Commission proposed modernizing the current deal, which only covers a limited range of industrial products and excludes agriculture, public procurement and services.

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