By HAKAN GULDAG, VAHAP MUNYAR, SEREF OGUZ
“One of the limits to our trade with Europe is the non-updated Customs Union (CU) agreement between Turkey and EU. The agreement that was signed in 1995 must be updated and modernized as soon as possible.”
Q: COVID-19 HAS FURTHER RAISED EXISTING CONCERNS REGARDING THE FUTURE. WHAT SORT OF WORLD LIES AHEAD?
A: The perfect concept defining this period is ‘uncertainty’. There are many problems in the world, such as the climate crisis, pandemic and economic gridlock. There is concern that the protectionism which was rising before the pandemic will increase after COVID19. Considering examples in history, protectionism harms those countries implementing it as well as their economies and citizens. In brief, we can solve problems with constructive and global collaboration.
Q: WHICH STRATEGY SHOULD TURKEY PURSUE IN THE NEW PERIOD TO ENHANCE ITS COMPETITIVENESS?
A: The pandemic has necessitated the change of the old production model, i.e., the “produce-in-Chinaand-sell-in-the-west’ model. This change in the global supply chain will bring along opportunities. Considering the ‘accessibility’ question, which has gained importance during the pandemic, Turkey’s been an important partner of Europe logistically for many years. Turkey can become an important alternative for EU with its capacity to produce quality and high-volume outputs, harmonization of industrial infrastructure with the EU and experienced labor force. With the new period, there is a good chance that the global supply chain will undergo a drastic change and regional supply demand will increase and turn into an advantage. Turkey’s fast compliance with digital transformation and technological breakthroughs will contribute to growing and enhancing competitiveness.
Q: WHAT IS ARE THE SHORTCOMINGS OF TURKISH COMPANIES AND INSTITUTIONS IN TERMS OF INTEGRATION WITH THE GLOBAL SUPPLY CHAIN?
A: It’s important for SMEs to do more business with the European market. The large part of industrial production is undertaken by SMEs. But they must give priority to institutionalism. They also need to transform their production structures so that they comply with Industry 4.0. The business models implemented in Europe can be pursued. Participation of relevant ministries and institutions such as the Small and Medium Enterprises Development Organization of Turkey (KOSGEB) and the Foreign Economic Relations Board of Turkey (DEIK) in this process will be helpful. One of the limits to our trade with Europe is the non-updated Customs Union (CU) agreement between Turkey and EU. The agreement, signed in 1995, must be updated and modernized as soon as possible. The agreement has significantly raised mutual trade and investments between Turkey and EU. It has revolutionized Turkey’s manufacturing structure and aligned it with the EU market. It has played a major role in integrating Turkey with the EU market and the global economy. However, each FTA signed by the EU with third countries creates an asymmetric situation in our trade with the EU. The road quota issue and protective approaches have led to a reduction in the agreement’s functionality. The CU should include issues such as agriculture, services and e-commerce.
Q: HOW WILL TECHNOLOGICAL AND DIGITAL TRANSFORMATION, ACCELERATED DURING THE PANDEMIC, AFFECT THE TURKISH BUSINESS WORLD?
A: We’ve always been cognizant of the importance and agility of digital transformation. Technology came to the help of companies when the pandemic threatened business continuity. Technological and digital transformation, which was on the agenda prior to the outbreak, has become compulsory and come to the heart of companies as well as individuals, because of the pandemic. Strategies needs to be planned right now for this to become a culture, to be adopted by everyone, not to be behind the future order. Another issue that our companies should keep pace with is changes in the EU market. The European Green Deal is among them. Our export companies may face surtaxes with the carbon threshold adjustment mechanism to be implemented with the Green Deal. This situation may create an adverse picture in terms of our competitiveness.
Q: HOW DO YOU EVALUATE THE RELATIONS BETWEEN THE TWO COUNTRIES AS THE CHAIRMAN OF THE TURKEY˹GERMANY BUSINESS COUNCIL?
A: Turkey, which is strong in supply, is an important partner for Germany in terms of trade cooperation and investments. We are engaged in talks with the German Association for Small and Medium-sized Enterprises for digitalization of SMEs. Germany has implemented a successful model. Its adaptation to Turkey would be useful. We endeavor to establish a cooperation mechanism with third countries. We look for ways to make joint investments and trade cooperation in Central Asia, Africa and the Middle East. Acquisition of German SMEs by Turkish companies is another project we pursue. We carry out a set of works to promote SMEs in Germany, which were successful but not transferred to the new generation. We continue our work online to enhance sectoral cooperation. We also give weight to strategic communications.
