German companies see Turkey as a hub to access the populated $ 1.5 billion market

German companies see Turkey not only as a large consumer base, but as a hub that gives them access to a market of 1.5 billion people, according to the chairman of the Turkish German Chamber of Industry and Industry. trade.

German companies understand very well the potential of the country, the potential of the location and the potential of the whole region, Markus Slevogt told Anadolu (AA) agency.

Slevogt recalled that German pharmaceutical giant Boehringer Ingelheim was considering investing in Turkey and creating a joint venture with prominent Turkish pharmaceutical player Abdi Ibrahim.

Stressing that Turkey is the European Union’s biggest trading partner, he said that Germany and Turkey have been more than two countries for decades and have very strong trade and trade relations.

“Turkey and the EU need each other as strategic partners, and Turkey, as the country with perhaps the widest network and the greatest influence in this region, will help also the EU and Germany to secure their strategic interests in this region, “he said.

The European country ranked first in Turkey’s exports last year, with exports to Germany reaching $ 15.9 billion (TL 147.64 billion).

Germany also took the top spot in eight-month Turkish exports this year. Between January and August, $ 12.4 billion worth of goods were exported to the country. Germany ranks second after China in Turkey’s imports.

The European country has a direct investment of $ 19.4 billion in Turkey at the end of 2020, which is 14% of international direct investment in Turkey. More than 7,600 German companies are currently operating in the country.

Supply chains

Turkey will play a new and important role in global supply chain activities and in creating a more robust supply chain for European production centers, Slevogt also said.

The problems related to COVID-19 have been mainly seen in Asia, he said, adding that “currently, for example, in Vietnam or Bangladesh, we are seeing very strong epidemics”.

He noted that European countries have had to close production sites in many areas such as textiles, sportswear and footwear production.

“Running shoes are just one example, shoes could be in short supply this winter and Christmas, due to the fact that production sites are used in Asia by global textile and sports manufacturers,” he said. -he adds.

The products Turkey exports the most to Germany are automobiles, machinery, knitted garments, non-knitted garments and electrical appliances. Machinery, automobiles, electrical appliances, plastics and pharmaceuticals feature prominently among imported products.

Turkey offers two major advantages. One of them is that Turkish companies have kept their factories running under very strict measures, and the other is that Turkey has well established production activities and supply chains.

Europe looked for cost effective solutions and found them in Asia in the past, but now time is more important for production approaches in Europe.

“So any downtime means you can’t keep producing, and that’s a huge cost issue because all of your plans depend on what your production side is doing,” he said.

The pandemic has also changed the cost equation, with freight and logistics costs rising dramatically during the pandemic, he noted.

Therefore, supply chains should be reorganized and moved to more robust and relevant locations, he said, adding: “Turkey has an additional advantage in terms of logistics and also with its robustness for the sites of European production “.

Stating that there is only one downside, which is the customs union, the trade manager pointed out that the union was a very good step in 1995-1996 but is now outdated.

Slevogt said the union should be strengthened to tackle non-tariff barriers and improve the overall situation with customs.

Turkey has repeatedly reiterated its view that an expanded agreement between the European Union and the Turkish Customs Union with its largest market, Europe, would be in the best interests of both sides.

The multiplication of disagreements between Ankara and Brussels in recent years is blocking negotiations on the modernization of the customs union. A deeper trade agreement dating from the 1990s would be extended to services, agricultural products and government procurement.

The enlargement of the customs union would bring Turkey, an EU candidate for bloc membership, fully into the internal market of the world’s largest trading bloc, allowing almost all goods and services to flow unhindered. .

After a turbulent 2020, Ankara and Brussels have expressed their intention to readjust their relations and return to a positive path in bilateral relations. However, the process remains very fragile.

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James R. Rhodes