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Hardly a week goes by without some barb or insult traded between Turkey and Israel. Turkish President Recep Tayyip Erdogan publicly slights Israel on an almost daily basis to drum up domestic political support, for example asserting that Israel’s treatment of Gaza surpasses the brutality of the Nazi regime. Things weren’t always this way. The 1990s and most of the 2000s saw warm diplomatic and political ties between Israel and Turkey. But these days there seems to be a diplomatic standstill.
Even so, despite harsh rhetoric and a suspension of top-level diplomatic engagement, Israeli-Turkish trade has grown by 19 percent since 2009, while Turkey’s overall foreign trade for the same period grew by 11 percent. Since few nations with strong trade ties escalate conflicts to the point of going to war with each other, Israeli-Turkish economic ties may signal the prospects of improved bilateral relations. With the economic and political outlook remaining bleak throughout the Middle East, the two nations have more reasons than ever to resolve their political differences—or to at least separate them from economic relations.
Turkey and Israel’s diplomatic ties began deteriorating at the January 2009 World Economic Forum. During a heated debate with Israeli President Shimon Peres on Israel’s Gaza offensive, then Prime Minister Erdogan accused Israel of barbarism, telling Peres, “When it comes to killing, you know well how to kill.” In May 2010, Israeli commandoes attacked the Mavi Marmara, a Turkish humanitarian-aid vessel that tried to breach the Israeli blockade on the Gaza Strip, killing nine Turkish activists on board and prompting Ankara to withdraw its ambassador to Israel. Relations worsened in August 2013 when Erdogan accused Israel of being complicit in the military coup that ousted former Egyptian President Mohamed Morsi. In January 2015, Erdogan said that Israeli Prime Minister Benjamin Netanyahu had no right to partake in an antiterrorism march in Paris after the Charlie Hebdo attacks given Israel’s activities in Gaza. Erdogan’s support for Hamas has also stunted relations between the two countries, and he has made few efforts to make amends.
Erdogan, however, has not always been this confrontational. As prime minister, he supported Turkey’s diplomatic efforts to “serve as a Middle East peace mediator.” During a 2005 visit with former Israeli Prime Minister Ariel Sharon in Jerusalem, Erdogan stated that he had come to contribute to the peace process between Israel and the Palestinians. Erdogan hosted former Israeli Prime Minister Ehud Olmert at his residence in 2008, hoping to broker peace between Israel and Syria. Erdogan saw Olmert’s decision to launch Operation Cast Lead only a few days following the meeting, then, as a betrayal, particularly after he assumed that Olmert had given him the green light to convey Israel’s readiness to start direct talks with Syria. Even so, Erdogan tried to mend fences half a year later by supporting a project that would have Israel lead a de-mining project along the Turkey-Syria border—despite resistance from parliament.
Although there is little good will left in either country for the other, the Arab Spring has prompted the two nations to reevaluate their relationship. In 2013, Netanyahu responded to the urging of U.S. President Barack Obama’s urging to mend fences and issued an apology to Turkey. Thereafter, Israel agreed to pay compensation to the families of the nine activists killed during the aid. Since the flotilla raid, Israel has also agreed to a partial lifting of the Gaza blockade, bringing the two states much closer to reconciliation in an increasingly unstable region.
To be sure, there is still considerable distrust in Israel toward the Turkish government, and Erdogan in particular. Netanyahu’s cabinet is fed up with Erdogan’s inflammatory remarks; the Turkish President’s anti-Israeli
comments after the Charlie Hebdo attacks, for instance, prompted Israel’s Foreign Minister Avigdor Lieberman to call Erdogan “an anti-Semitic neighborhood bully.” Netanyahu is concerned that if a deal is struck over the Palestinian issue Erdogan will use it for domestic gains. Following Netanyahu’s apology for the flotilla raid of May 2010, a number of newspapers printed headlines that read that Erdogan “made Israel apologize.” The truth of the matter, of course, is that, through Obama’s mediation, Israel had delivered an apology, which Turkey accepted—not extracted. In return, these have raised questions in Israel over Turkey’s genuine interest in mending the relationship.
Better ties with Israel are especially appealing to Turkey now that it has burned its bridges with the Arab world. Ankara’s failed “zero problems with neighbors” policy has resulted in Turkey having no ambassadors in Cairo, Damascus, or Tripoli. It only appointed an ambassador in Baghdad after former Iraqi Prime Minister Nouri al-Maliki was replaced by Haider al-Abadi in September 2014. Syria suspended its free trade agreement with Turkey in December 2011, when Bashar al-Assad became Ankara’s main enemy. Since then, trade between Syria and Turkey has dropped to half a billion USD in 2014, from almost two billion USD in 2011.
In Egypt, Turkey’s refusal to recognize Abdel Fattah al-Sisi as the President of Egypt has hurt Ankara’s economic interests as well. For instance, Turkish exports to Egypt have shrunk by 10 percent between 2012 and 2014. Furthermore, Egypt did not renew the roll-on/roll-off ferryboat agreement, a trade route that circumvents expensive passage through the Suez Canal, after it expired this April, hampering the transportation of goods between the Turkish ports and Alexandria. This move cuts off Turkish goods from arriving at lucrative markets in Saudi Arabia and the Gulf countries. This agreement also allowed Turkish companies to circumvent Syrian territory controlled by the Islamic State (also called ISIS) while also bypassing the Suez Canal and therefore reducing transportation costs.
Turkish relations in Libya, too, are in a dire state. Libyan Prime Minister Abdullah al-Thani has accused Turkey of arming the ISIS auxiliaries in Libya, driving Turkish companies and expats out of the country. On top of this, Ankara’s recognition of the Islamist-controlled National General Congress over the democratically elected al-Thani government has cast a shadow over Turkish business interests in large parts of the nation.
Russia’s aggression in Ukraine has taken an economic toll on Turkey as well. Despite Turkey’s muted stance on Russia’s annexation of Crimea, and the argument that there is an emerging Russian-Turkish economic axis, Turkish exports to Russia fell by 15 percent between 2013 and 2014. The ruble’s depreciation against the USD has also created problems for Russia in terms of paying for its Turkish exports which have subsequently become more expensive. Turkish exports to Ukraine fell by 21 percent within the same period, while Russian and Ukrainian tourism, major sources of revenue for Turkey, continue to decline.
Israel may not be Turkey’s largest trading partner, but it is its most balanced one. Turkey enjoys even trade flows with Israel, receiving $3 billion in imported goods while exporting the same financial amount in Turkish goods to Israel in 2014—a sign of financial parity rarely seen with Ankara’s other trade partners. In the same year, Turkey exported $6 billion in goods to Russia, while importing $25 billion in goods, resulting in a huge trade deficit. Turkey is once again becoming a preferred travel destination for Israeli travelers. According to the Association of Turkish Travel Agencies (TURSAB), the number of Israelis travelling to Turkey increased by 125 percent, from 83,740 to 188,608 between 2012 and 2014. Admittedly, this is still far from the half a million Israeli tourists that flocked to Turkey in 2008, but is a promising sign of a rebounding tourism economy.
One should, however, be wary of too much optimism. Israeli-Turkish economic relations may be seemingly immune from politics, but the nations’ diplomatic impasse could still inhibit future growth, especially if distrust and harsh rhetoric between the two countries persists. Nevertheless, as bilateral trade volume continues to increase, entrepreneurial interests will isolate to a certain extent economic ties from political problems. Erdogan was quick to announce that Turkey would be suspending “military and commercial ties” with Israel after the Mavi Marmara incident. However, a statement from him followed that very same day announcing that Turkey would not impose trade sanctions after all. Erdogan is likely to have backed away from his original plan after pressures from the business community, but there is no promise that he will make similar concessions in the future.
And, for now, diplomatic ties between Israel and Turkey show no signs of improving, save for their mutual interest to keep politics from interfering with business. Rebuilding Israeli-Turkish diplomatic relations to mid-1990 levels of cooperation will not be feasible unless reconciliation is achieved on the Palestinian front. Gaza offensives in 2009 and 2014, along with the deaths of nine Turkish activists on the Mavi Marmara, strengthened Turkish sympathies toward Palestinians. Compounded by Erdogan’s willingness to resort to anti-Israeli rhetoric for domestic political gain, little has been achieved since 2009 to advance diplomatic dialogue between Ankara and Jerusalem.
The economic outlook for the Middle East remains bleak, however, which makes at least sustained commercial peace between Israel and Turkey plausible. Eventually, the mutual trust wrought from commercial relations could help both countries find economic and political footing in a tumultuous region, open the door to future peace brokering within the Israeli-Palestinian crisis, and give Ankara an opportunity to address regional security challenges.