How Turkey’s Trade Sanctions Could Hurt Israel
Trade Desk
Published: 06 May 2024,
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Port of Izmir, Turkey Reuters file photo
Türkiye has stopped all types of import and export with Israel in protest of the Palestinian attack on Gaza. Turkey’s trade ministry announced the ban last Friday, saying the trade ban will remain in place until a permanent cease-fire and humanitarian aid operations are launched in Gaza.
The Turkish sanctions are expected to adversely affect the Israeli industry and consumers. Meanwhile, Israeli residents are under pressure from the rising cost of living. News from Al-Jazeera and Reuters.
Israel’s annual trade with Turkey is about 7 billion or 7 billion US dollars. Israel imports a variety of basic raw materials, products and food from Türkiye. It is expected that the price of food products imported into Israel will increase due to the Turkish ban. Apart from this, expenditure on housing and automobile sectors will also increase.
There have been tensions between Israel and Turkey over the Palestinian issue at various times. Although diplomatic relations were severed, trade was not affected. For example, in 2010, diplomatic relations between the two countries were severed due to an attack by Israeli forces on a Turkish aid ship off the coast of Gaza. However, this time, Türkiye has unexpectedly announced a trade ban. Al-Jazeera quoted Israeli media Calcalist as saying that Turkey’s announcement to cut trade ties came as a “complete surprise” to Israel.
What will be the effect of the ban?
Türkiye is one of Israel’s major trading partners. Israel imports raw materials and products of various industries from the country relatively cheaply. Most goods from Türkiye to Israel are transported by sea. Türkiye has also become a major import destination for Israelis. One of the reasons for this is the cheap cost of production and the relatively short distance between the two countries. Goods can reach Israel in just 18 hours from southern Turkey.
Now it will take some time for Israel to find an alternative source of imports. The process of creating a new import destination is not easy; There are various types of agreements and terms for this. In addition, the price of goods imported from other countries may be much higher than in Turkey. Transport costs in the Arab region have already increased by 20 percent due to the war in Gaza and Yemen’s Houthis. Other alternative sources are geographically further away. As a result, Turkey’s sanctions will have a direct impact on Israel’s economy.
What will be the effect of the ban?
Following the announcement of the trade embargo, Turkey’s customs department has already canceled or is not granting exemptions to various products bound for Israel. As a result, those products are stuck in the supply chain. Some ships even turned back after setting sail. Israel imports many raw materials needed for the construction sector from Türkiye. Apart from this, Turkey also has a stake in Israel’s car or automobile sector.
According to Calcalist’s report, Turkey’s ban has multi-dimensional effects. For example, one of the suppliers of fuel oil to Israel is Azerbaijan, which comes through Turkey. Now there are concerns about whether this oil supply will come under the Turkish sanctions. If such a situation occurs, it could affect Israel’s energy market. But making such a decision on oil would be complicated for Turkey. Because such a decision will also harm Azerbaijan, Turkey’s close partner.
Turkey also depends on Israel. For example, Türkiye was one of the top destinations for Israeli tourists in 2023. About 2.3 million Israeli tourists visited Turkey last year. There are currently no direct passenger flights between Israel and Turkey.