Posted at 12:49 PM
I want to thank Serra Hanim and the American Business Forum in Turkey for hosting our delegation tonight.
This organization serves an incredibly important function. It connects businesses to potential partners here in Istanbul and across Turkey. Quite literally, it is helping to build bridges between our countries.
You serve as an invaluable source of knowledge, insight, and guidance to businesses in this country, and I want to congratulate ABFT and its more than 100 member companies on celebrating your 10th anniversary.
For decades, the United States and Turkey have sustained deep strategic and diplomatic ties, which is the foundation of our relationship.
Of course, those ties are as important today as ever.
Our leaders have a shared ambition of elevating our commercial and economic relationship to that same level.
For the last 10 years, ABFT has been – and must continue to be – at the heart of that effort.
In fact, recently a number of iconic American companies that are members of ABFT have made long-term commitments in Turkey:
- Intel opened an R&D center in Istanbul, bringing a new approach to high-tech development to the country, collaborating with industry, universities, and public institutions on education technologies.
- In May, Ford announced the establishment of its third manufacturing plant in Turkey, bringing the company’s production capacity here to 415,000 vehicles.
- And last fall, General Electric announced plans to invest $515 million in Turkish locomotive production and energy projects providing turbines and new power generators.
These terrific American companies are creating local jobs, bringing innovation to the local economy, manufacturing products for local customers, and demonstrating what is possible in the local market.
As someone who spent 27 years in the private sector, I can tell you that these firms would not make such commitments unless they believed that the conditions are right; the market presents opportunities; and the long-term prospects for the country are positive.
Put differently, Turkey is a market on the rise and U.S. businesses want to invest in your communities and build lasting partnerships here.
Thankfully, our business communities do not have to go it alone. Both governments want the same thing – deeper ties.
In 2009, then-Prime Minister Erdogan and President Obama declared their mutual commitment to elevate our bilateral economic ties when they announced the formation of the Framework for Strategic Economic and Commercial Cooperation -- which we call the FSECC.
I am proud to co-chair the FSECC for the U.S. side and am committed to working closely with Deputy Prime Minister Babacan and Minister of Economy Zeybecki to deepen our economic ties.
Since the dialogue’s first meeting, Turkey has been asking for the Department of Commerce to lead a delegation of U.S. CEOs here.
And I am incredibly proud – on my first trip to Turkey as secretary -- to be joined tonight by members of the President’s Export Council as well as our new Department of Commerce Undersecretary for the International Trade Administration Stefan Selig.
And I want to recognize all of the members of the PEC who are here with us tonight:
- Ursula Burns, Chairman and CEO of Xerox Corporation and Vice Chair of the PEC;
- David Abney, CEO of UPS;
- Mary Andringa, President and CEO, Vermeer Corporation;
- Dick Friedman, President and CEO, Carpenter & Company;
- Marillyn Hewson, Chairman, President, and CEO, Lockheed Martin;
- Arne Sorenson, President and CEO, Marriott International;
- Patricia Woertz, Chairman and CEO, Archer Daniels Midland; and,
- Robert Wolf, CEO, 32 Advisors.
Each of these CEOs is committed – as I am – to strengthening the trade and investment bonds between our nations.
The fact is we have seen signs of progress in recent years:
- Between 2011 and 2013, bilateral trade hit record levels, reaching nearly $20 billion per year;
- Turkey recorded its highest-ever level of exports to the United States in 2013 -- with exports totaling $6.7 billion; and,
- We are moving toward a more balanced trade relationship.
There are many parties who share responsibility for our joint progress, but I am pleased to say that the Department of Commerce has played a lead role in it.
- Our Global Markets team facilitated over $100 million worth of export successes in 2013, benefiting American firms, their Turkish partners and Turkish consumers.
- Over the past three years, Global Markets has also organized three trade missions to Turkey, focused on aerospace and defense, renewable energy and medical technologies.
These steps are a start – and they are important – but if we are serious about elevating the economic dimension of this relationship, we must be honest with each other that we are not where we need to be.
With a nation as large and dynamic as Turkey, with Turkey now a member of the G20, with a new class of Turkish entrepreneurs on the rise, there is real room for significant improvement in our bilateral trade.
Clearly, American businesses see great opportunities here, but they still suffer from a lack of access to Turkish markets.
Too often, U.S. companies come to the Department of Commerce with concerns about a wide variety of barriers to entry.
Tonight I would like to note three particular areas that currently present challenges to U.S. companies yet are ripe for change.
- Greater transparency in government procurement;
- Commercial offsets; and,
- Hurdles in obtaining Good Manufacturing Practices certification.
We are working to address these barriers through the FSECC and other bilateral mechanisms, but the message I want to make clear tonight is that the conditions we aspire to create are not just for the benefit of American businesses.
As Turkey opens its markets to more trade, greater competition and increased transparency, Turkish businesses and the Turkish people will enjoy the benefits.
Further, choosing this path will strengthen Turkey’s position as a crossroads between west and east, as a hub for commerce among nations.
First, let me talk about the challenge of needing more transparency in government procurement.
In the coming years, many Turkish development and infrastructure projects in aerospace and transportation will be publicly tendered.
Foreign companies want to bid on these contracts – and many bring critical expertise to the table – but they historically have endured a series of burdensome and unfair requirements just to be considered in the process. The unfortunate result is that qualified and committed companies that want to invest and create jobs here, do not participate in the tenders nor even enter the market.
This is not a new issue for our bilateral discussions.
The Turkish government should act now to adopt rules that promote non-discrimination, fair competition, and transparency in government procurement.
The second issue I want to touch on is commercial offsets.
Recently, Turkey began requiring commercial offsets in the health care, medical devices, and commercial aircraft sectors.
This policy, which forces companies to produce locally is an impediment to American and foreign firms in their efforts to access the Turkish market.
I appreciate the importance of creating jobs in local markets and the desire to have foreign companies make long-term investments. But this approach is both onerous and can be counterproductive to attracting foreign direct investment.
We strongly urge the Turkish government not to move forward with this policy or to make significant alterations to it.
Third, for years, our businesses have been facing hurdles in their effort to obtain a Good Manufacturing Practices certification.
Currently, U.S. firms with pharmaceutical manufacturing plants in country need to have their facilities inspected by Turkish authorities before receiving certification and the authority to market their products.
But the Turkish Ministry of Health – the certifying body -- does not have the capacity to conduct these inspections in a timely manner. This often leaves companies that have already made an investment in Turkey stranded in a holding pattern -- and [PAUSE] -- with restricted access to Turkish consumers.
At the most recent FSECC meeting in May, Turkey’s Deputy Prime Minister pledged to simplify and expedite this process.
We have been waiting to see progress in this area for a long time.
It has now been 5 years since our leaders announced that we would elevate our commercial relationship.
Frankly, the time is now to hit the accelerator.
If we are serious about increasing bilateral trade and investment, we must address these and other market challenges.
And if Turkey is to achieve its “10 by 23” goal, these are critical issues – and not just for U.S. businesses.
The foundation for deeper economic cooperation between our countries already exists – but we need to seize the moment.
We must exhibit the political will necessary to achieve the shared vision of Presidents Erdogan and Obama.
In this endeavor, I know the members of the President’s Export Council here tonight can help.
These talented, dedicated leaders have taken time away from their day jobs – running some of America’s finest companies – to serve as commercial ambassadors for our nation.
For that I am grateful.
We will not reach our potential without the help and input of the business communities in our countries.
Fortunately, business leaders on both sides—from the PEC to the U.S.-Turkish Business Council to the ABFT to many others—want to be part of the solution.
And we need them.
For decades, from the Truman Doctrine to the commitments of Presidents Erdogan and Obama, the United States and Turkey have maintained a friendship and an alliance built on mutual interests and mutual respect.
Today, we have an opportunity to deepen our ties – not just through continued strategic cooperation -- but also through our powerful connections of commerce.
It is our shared responsibility to seize this moment of opportunity.
It is up to all of us – American and Turkish, in public life and in business, as part of the President’s Export Council or part of ABFT – to decide how to grow this relationship, advance our economic ties, and ensure that both the United States and Turkey remain open for business.
And open for business with each other.
Thank you very much.