10.09.2014 Turkey increases exports to Russia


For Turkey declination of the relationships between Russia and Europe may bring positive results.

According to the government sources of the Russian Federation, Moscow and Ankara may agree to increase supplies of Turkish food products, the transition to direct payments in national currencies and the creation of a free trade zone. Turkey wants to occupy a niche in the food market, which was liberated by the countries that have supported anti-russian sanctions.

The question is primarily about expanding the supply of fruits and vegetables. This sector of the economy in Turkey especially developed. For example, the markets of Bulgaria, which in the times of socialism was considered a strong agrarian power, now littered with the Turkish products.
The Turks also promote their meat to the Russian market. The negotiations in Moscow between the Rosselkhoznadzor and the General Directorate of food and control of the Ministry of agriculture, provand and livestock production of Turkey. The Turkish side handed over the letters of guarantees of their veterinary services in relation to various kinds of livestock production. The Rosselkhoznadzor informed of the need to provide additional materials, including a list of provinces, where in the last year were no reports of dangerous diseases, and also no inspection certificate of veterinary service the companies, which are interested in export of their products in the countries of the Customs Union, and a number of other documents. The Turkish side expressed readiness send in the Rosselkhoznadzor requested materials in the coming days.
It is possible that in the course of negotiations in late September can be raised the question about the organization of supplies of Turkish agricultural products to the Crimea - in this region a number of food products is easier to import from Turkey, not from the Central Russia.

Also in the upcoming negotiations can be raised two more fundamental issues: the transition to direct payments in national currencies and the creation of a free trade zone between Turkey and the Customs Union.
The most realistic point still looks the positive decision on the first question. The Russian-Turkish trade turnover by the end of 2013 amounted to $32 billion. In period of January-June it has increased with comparation to the same period of 2013 by 0.8% to $15.7 billion. This is more than the volume of trade between Russia and the United States. Russia supplies to Turkey mainly mineral products and metals and products from them (a total of 84.1% of exports volume). Turkey have also more diverse export it is mainly machinery, equipment and vehicles (33%), food and agricultural raw materials (27%), textiles, glassware and shoes (16,3%), chemical products (10,6%).

The main feature of mutual trade is unbalanced on the volume and structure. The imbalance in favor of Russia (surplus of $9 billion) could be offset by income from tourism, "Shuttle" trade, money transfers from Turkish citizens, as well as construction and other firms operating in Russia. Essentially, this level of turnover is large enough to arrange direct payments in national currencies. However, it is most likely that the main interest of the Turkish Lira at first will be the tourists, as well as banks and companies in those regions, where the presence of Turkish goods particularly noticeable.

As for the possibility of creating a free economic zone, there is a barrier may become as Turkey have a membership in the European customs Union.
According to the Director of the RANE’s Research Center of international trade, Alexander Knobel, cooperation between Russia and Turkey will develop within certain limits.

"Turkey is a NATO member. Therefore, as it will be possible to strengthen the relationship with NATO member, they will be strengthened, but no more than that", - said the expert. To sign an agreement with Turkey on free trade as part of the Customs Union is also not possible: not being an EU member, Turkey, however, carries the common trade policy with EU. "In order to develop the depth of integration to the level of a free trade zone, it is necessary to persuade Turkey to withdraw from the Customs Union of the EU, that it is unlikely. Therefore, the strengthening of economic ties with Turkey will not be such as to significantly change the format of this interaction", - says the expert.
He also predicts that due to Turkish vegetables and fruits it is unlikely to achieve significant control of holding the prices for these products in Russia, because the volume of trade with EU countries and Turkey are not comparable.

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