Posted at 6:25 PM
U.S. Deputy Secretary of Commerce Bruce Andrews delivered remarks today at the 34th Annual Conference on U.S.-Turkey Relations hosted by the American Turkish Council. Speaking before a crowd of approximately 100 American and Turkish business leaders and government officials, he discussed bilateral commercial relations between the two countries and the Commerce Department’s leading role in helping bolster those ties.
Remarks as Prepared for Delivery
Günaydın, everyone, and merhaba. Thank you, Rick Johnston, for your kind introduction and for all your work, particularly through the U.S.-Turkey Business Council, to strengthen commercial relations. The American Turkish Council is a valued partner for the Department of Commerce, and all of you here today serve an important and invaluable role in promoting closer bilateral ties between the United States and Turkey. I want to thank President Beasey for organizing such a wonderful conference and for leading this great organization.
As some of you may know, I have always had a special affection and affinity for Turkey. My wife is Turkish and was born in Ankara. She spent her childhood in both Ankara and Istanbul before moving to the United States when she was 11 years old. Her father taught at Middle East Technical University before moving to the United States. My children are half Turkish. My wife’s grandmother and many of her family members still live in Bilkent, and we visit often. Turkey remains one of my favorite places in the world, and I’ve closely watched the country’s politics and government evolve throughout the years.
The United States, too, has a special relationship with Turkey. For decades, since the time of the Truman Doctrine, our countries have enjoyed a close partnership focused on military cooperation. But in recent years, our economic and commercial ties have played an increasingly central role. In 2009, then-President Gul and President Obama agreed to elevate our trade and investment relationship to the same level as our security cooperation – and we are already seeing the results. Our two-way trade has nearly doubled since 2009. More than 1,400 U.S. firms are now doing business in Turkey. And more Turkish companies are investing in the United States than ever before, with the total stock of FDI at just over $1 billion.
The reasons for this growth are clear: Turkey is an attractive market for U.S. companies, with many factors in its favor, including: a growing economy, a large population approaching 80 million, a young, educated labor force; and a central location with close proximity to markets in Europe, the Middle East, North Africa, and Central Asia. Yet even with this progress and these strategic advantages, challenges persist – and there is real room for significant improvement in our bilateral trade relationship.
Geopolitical turmoil in the region – combined with political, economic, and security challenges – has created some significant headwinds as we continue efforts to build a vibrant commercial partnership. But with every challenge, there is opportunity. And it is our hope that, after the next round of elections, comprehensive economic reform will be a primary focus of the new government.
Our Department has heard from many companies that the local business climate remains a concern. U.S. businesses operating in Turkey are hampered by inconsistent policies in the pharmaceutical and agribusiness sectors, burdensome regulations and documentation requirements, including in tenders and other procurement decisions, a time consuming and unpredictable judiciary and regulatory framework, and increased tariff rates across a number of sectors. During economic slowdowns, there is often a rise in protectionism. But in the long run, these types of measures will ultimately impede commercial collaboration, deter the inbound investment that Turkey desires, and hinder Turkey’s economic development.
We outlined many of these challenges in what has now come to be known as the “Pritzker Report.” Exactly one year ago, Secretary Pritzker led a delegation of high-level officials from leading U.S. firms – all members of the President’s Export Council – on a trip to Istanbul and Ankara. The delegation met with President Erdogan, Prime Minister Davutoglu, and several ministers. In response to a senior Turkish government request, we prepared a multi-dimensional report outlining focus areas for deeper bilateral ties. The Pritzker Report lays out 26 legislative and regulatory measures to improve the local business climate, on issues ranging from public procurement to agriculture. This was a result of ongoing and close collaboration with American and Turkish companies, who seek to increase business between our two countries.
It is our hope that the new Turkish Government will use this report as a roadmap for reform and a guide to regain the momentum in our bilateral trade and investment relationship. I understand that our Turkish friends and many in the business community have floated the idea of including Turkey in the Transatlantic Trade & Investment Partnership, or inking a bilateral free trade agreement with the United States. We believe that we should not rule out any future avenues for expanding our bilateral trade and investment ties. But it is premature at this stage to say for certain where our formal legal relationship and our cooperation may lead.
One concrete step we have already taken is setting up the High Level Committee – which gives the Turkish Government unique insight into our U.S.-European Union T-TIP discussion. It is critical that the HLC process provides a candid assessment of how we can increase bilateral trade and investment integration, and that we take concrete actions based on that assessment. In the meantime, we should move forward and make real progress on longstanding commercial issues that would pave the way for us to expand our commercial relationship. The good news is that our two countries already have the mechanisms in place for the high-level interaction necessary to elevate our economic ties.
Six years ago, then-Prime Minister Erdogan and President Obama announced the formation of the Framework for Strategic Economic and Commercial Cooperation – which we call the FSECC. Co-chaired by Secretary Pritzker, this cabinet-level dialogue is the premier bilateral platform to discuss our trade and investment issues.
The private sector also has a voice in our government decision-making through the U.S.-Turkey Business Council. Through this council, business leaders are working side-by-side with government officials to facilitate a stronger commercial link between our nations, as a gateway to closer overall ties. We have chosen the new U.S. members for the next iteration of the council. Once our Turkish colleagues have selected their members, the council will meet. We look forward to hearing their recommendations.
Beyond the FSECC and the U.S.-Turkey Business Council, the Department of Commerce is working to expand the footprint of American businesses in Turkey on a number of fronts. In collaboration with various Turkish partners in the public and private sector, the Department has organized three trade missions in the past four years, in the areas of renewable energy; defense and aerospace; and healthcare. These trips have resulted in the opening of new offices in the country, tens of millions in direct sales, and other ongoing deals.
For example, Allied Wired and Cable – a small family-owned business in Collegeville, Pennsylvania – reported approximately $1 million in sales to Turkey after participating in the defense and aerospace trade mission. This growth in sales contributed to a 33 percent increase in jobs at the company. We have also successfully advocated for large-scale projects like a $3.5 billion deal for Sikorsky utility helicopters, $700 million for a Rolls-Royce North America and Honeywell helicopter engine project, and a GE gas pipeline compressor deal totaling $28 million. In all of these cases, people in both of our countries are seeing benefits. Turkey gains from access to high-quality American products and services, and U.S. firms can position themselves in Turkey for the long haul.
Overall, our current advocacy projects include nearly three dozen cases with a total value of well over $450 billion in sectors like defense, aerospace, energy, healthcare, and ICT. And we want to grow this portfolio even more, provided the right conditions are in place. Last month, working with the U.S. Trade and Development Agency, we held a reverse trade mission – bringing Turkish officials involved in the construction of the new Istanbul airport to tour facilities here in the United States and meet with relevant authorities in Atlanta, Dallas, and Chicago. Our hope is that American companies will receive strong consideration as contributors for these projects.
In addition, we recently organized a roadshow to Eskişehir and Samsun to reach out to these up and coming commercial centers and connect local firms with American suppliers. Representatives from our Commerce Department and the U.S. Embassy met with local businesses and government officials to discuss trade finance, the international buyer program, SelectUSA, and opportunities to increase our trade and investment with these relatively underserved commercial centers. Our intention is that this is the beginning of greater U.S. commercial activity in parts of Turkey that are less well known to American firms. In these areas – and in cities and towns across Turkey – the U.S. business community can contribute more than just commercial benefits. American companies can also help Turkey achieve its social and humanitarian goals.
As everyone in this room knows and appreciates, Turkey plays a vital humanitarian role in hosting more than one million Syrian refugees within its borders. Working in partnership with Turkey, the U.S. has committed to providing $4.5 billion in humanitarian assistance in response to this conflict. And I know that the American Business Forum in Turkey – in cooperation with the U.S. Embassy – is working to help align American business resources. Despite the hardships endured by so many, stories emerge of collaboration that makes a small difference in people’s lives.
For example, a U.S. firm called Woven Legends is working with the Turkish government to improve the lives of refugees. The Philadelphia-based company has produced handmade rugs in Malatya for over thirty years. Their products are considered some of the best in the world because of their use of handspun wool and naturals dyes. In 2012, Woven Legends began teaching refugees in the Adiyaman camp how to weave carpets. Three years later, they now have six workshop tents there, consisting of 69 looms and 216 active weavers. The refugees are paid the same wage as the company’s Turkish workers, putting them on a path towards financial stability and a better life. Woven Legends has also started a weaving project in the Harran, Urfa refugee camp with 13 looms and 15 weavers, and hopes to do even more in the future. In a world where the headlines are dominated every day by stories about the refugee crisis, this operation has been an undeniable success – one lauded by the Turkish government agency in charge of the camps as a model for how to provide refugees lasting and long-term support.
The work done by Woven Legends to support refugees is the ultimate symbol of how stronger bonds between the United States and Turkey can affect positive change around the world. But in order to unleash the full potential of our relationship, we must take concrete steps now to advance a more robust economic alliance between our countries. We have had some success so far – but there is more to be done to improve the business climate if U.S. companies are truly able to help Turkey achieve its lofty economic goals. It is up to all of us – working together across the public and private sectors, in the United States and Turkey – to decide how to grow this relationship and advance our economic ties.