How Turkey Bypasses Its Own Israel Trade Ban via Greece
Despite Ankara’s official ban on trade with Israel, data from May reveals ongoing commerce between the two states, with Greece likely acting as an intermediary to facilitate continued trade.
Persistent Trade Despite Official Ban
An examination of import and export data from the Turkish Exporters Assembly (TIM) and Israel’s Central Bureau of Statistics (CBS) for May 2024 reveals an interesting trend. Despite Turkey’s official declaration of halting all trade with Israel, commerce between the two states appears to persist, with Greece potentially serving as an intermediary.
Turkey’s Role as a Key Supplier
In recent years, Turkey has established itself as a significant trading partner with Israel due to its geographical proximity, competitive pricing, and product quality. Following the COVID-19 pandemic, Israeli businesses began diversifying their supply chains, reducing their traditional reliance on China.
The Shift to Turkish Manufacturing
This shift led to increased interest in Turkish manufacturing capabilities. In early 2023, an Israeli logistics and supply chain management company, Gaash Worldwide, highlighted the advantages of Turkish production. Their analysis suggested that while Chinese factories were capable of high-volume production, Turkish manufacturers offered superior quality and durability in their products.
Diverse Trade Relations
The trade relationship between the two countries encompassed a wide range of goods, from agricultural products and textiles to more sophisticated industrial items. The iron and steel sector dominated, with exports valued at approximately $1.2 billion annually. The automotive industry also played a crucial role, with vehicle exports reaching nearly $563 million. Plastic and electronic equipment exports were similarly substantial, valued at around $516 million and $385 million, respectively. This trade pattern highlighted Turkey’s role as a key supplier of both basic commodities and high-value industrial goods to the Israeli market.
Political Fallout and Trade Tactics
The economic relationship between Ankara and Tel Aviv underwent a significant shift following Operation Al-Aqsa Flood in October last year. Israel’s subsequent military operation in Gaza, now in its ninth month, wreaked devastation on the strip’s civilian population, killing mainly women and children and causing an urgent humanitarian crisis. The Israel army’s atrocities and war crimes have incited widespread outrage among the Turkish public. Civil society organizations and the New Welfare Party (YRP), whose supporters are largely religious, organized nationwide protests demanding that Ankara cease all trade with Israel.
Ankara’s Response to Political Pressure
Initially, the Turkish Ministry of Trade tried to ignore these reactions. However, the political consequences became apparent in March when the Justice and Development Party (AKP) suffered a major setback in local elections, falling behind the Republican People’s Party (CHP) for the first time in 20 years. AKP strategists attributed this loss partly to some of their traditional voting base switching their support to the YRP in protest of continued trade with Israel.
Export Restrictions and Loopholes
In response to the political pressure, the administration of Turkish President Recep Tayyip Erdogan took decisive action. In April, Ankara imposed export restrictions on 54 categories of goods to Israel, in a move many suspected was orchestrated to placate the president’s various foreign and domestic constituencies. More comprehensive measures followed at the beginning of May when Turkey announced the suspension of all import and export activities with Israel.
Circumventing the Restrictions
In response, Israeli importers began exploring alternative methods to maintain trade flows. One proposed strategy involved routing Turkish products through third countries, mainly in Europe, before their final transport to Israel. This approach aimed to circumvent the restrictions while allowing Turkish manufacturers to continue supplying goods to the Israeli market indirectly. Israeli shipping companies, such as iShip Forwarding, developed new logistical routes transporting Turkish products to intermediary countries before their final destination in Israel.
Indirect Routes and Document Loopholes
The circumvention strategy involved altering shipping documentation. Instead of listing an Israeli port as the final destination on the bill of lading, goods were initially shipped to a third-country port. From there, they were re-routed or re-exported to Israel under new documentation. This method exploited the difficulties Turkish customs face in thoroughly investigating the ultimate destinations of exports, given the vast scale of Turkey’s global trade network.
Greece as a Key Trade Intermediary
European channels appear to be the most viable alternative for maintaining Turkish–Israeli trade flows, albeit indirectly. Data published by TIM and CBS for May shows that trade between Turkey and Israel continues via Greece. CBS figures reveal that in May, Israel imported goods worth $116.8 million from Turkey, while TIM’s May 2024 data values Turkey’s exports to Israel at $4.4 million.
The Increase in Exports to Greece
Noteworthy is the significant increase in Turkey’s exports to regional rival Greece during the same period. Turkey’s exports to Greece in April 2024 were $226.3 million, which rose by $149.3 million in May, reaching $375.8 million. TIM’s detailed export breakdown reveals that Turkey’s steel and cement exports to Greece in April were $33 million and $4 million, respectively – figures that doubled to $60.7 million and $8.95 million in May.
Turkish Trade Ban – More Symbolic than Effective
As the data demonstrates, and similar to the ineffectiveness of sanctions against Russia in today’s world, Turkey’s declaration of “halting all trade activities with Israel” lacks substantial effect. Consequently, Ankara’s decision inflicts minimal damage on Israel, aside from slightly increased transportation costs. It is also worth noting that Turkey’s decision does not encompass free trade zones. Israel can easily continue its trade with Turkey through the Izmir and Mersin Free Trade Zones as an alternative option.
