The Ties That Bind

How has the ATC evolved in the past year?

We were originally founded to foster the relationship between the US and Turkish defense sectors, but as the Turkish defense sector has become so much more mature in recent years and is becoming very capable on its own, we see that the ATC needs to expand itself. We need to branch out into a lot more of the emerging sectors. Accordingly, there have been changes to our flagship event, the Annual Conference on US-Turkish Relations. This year we intentionally changed the date of the event to September. Usually it’s been in the summer time, as Congress winds down its year before leaving Washington, but this year we moved it to stay out of the elections here in Turkey. We also expanded the event to encompass broader economic and political communities that are part of the US-Turkish relationship. We are making a very strong effort this year to generate broad interest in the bilateral relationship, by going into some other industries we haven’t been much into the past, like education or the energy sector. We are really looking at the renewable sector this year whilst agriculture is also important. We are excited this year to promote a more diverse group and conference, with which we are hoping to attract a wider audience.

In which other sectors do you see potential for increased cooperation?

We are seeing potential in the services sector. One of our members—ATU Duty Free, Turkey’s leading duty free operator chain—was recently awarded its first duty free retail concession in the US with a 10-year contract to the George Bush Intercontinental Airport (IAH) in Houston, Texas. We’ve also seen companies like Borusan invest in the US and establish manufacturing facilities related to gas exploration. To a lesser extent, the food, manufacturing, and textiles industries tend to be strong for Turkish exports. However, I think therein lies a lot of the growth potential for exports to the US. I don’t think it’s near the potential that it could be. We’d like to see how we can encourage trade and open doors. Some of it is literally just navigating the US market because it’s a rather large and sometimes ominous market to get into. One service we’d like to get into is business development consultancy. It will not necessarily be ATC doing the nuts and bolts of business development, but connecting our members to credible business development services and consultancies inside the US to help them grow.

What is your view on the Transatlantic Trade and Investment Partnership (TTIP)? What can ATC do to manage some of the concerns Turkish companies have about that?

At this point, the ATC is educating and advocating for Turkish inclusion in TTIP. We feel that TTIP, without Turkish involvement, will further complicate US-Turkish trade. These types of agreements are all about the economy, but they have everything to do with politics. Turkey needs to continue to do a couple things; reform the economy and do what it can to quell political uncertainty that off balances its economy, as well as address structural concerns like account deficits, low savings, high debt ratios in the country, and government transparency and accountability. Rules of laws and integrity are the things the government should address in a fairly quick timeframe. Moreover, all these reforms are just good economics. It’s good for the Turkish economy regardless of the TTIP or any FTA. It is also good for the 2023 goals that Turkey has set for itself. Equally as important is repairing, rebuilding, and establishing its relationship with the US Congress. There are clear concerns there regarding the democratic process here in Turkey. Congress is one of the most important aspects regarding TTIP accession. It’s one of the biggest things that Turkey needs to improve for that, or indeed any FTA, to happen. The US government is consistently saying that it understands Turkish concerns, but these reforms and issues need to be addressed first before any realistic talk about free trade can be entertained. The other aspect of Congress is not only the bilateral relationship, but Congress also has a business constituency in the US and business-to-business relationships between Turkish and US companies should happen to influence members of Congress to advocate for trade liberalization with Turkey is really crucial to moving that forward in any degree.

Should there be more outreach from the Turkish business community to Congress?

I don’t think it would hurt. It’s got to be done smartly, though. I think the way to do that is not through direct Turkish business outreach to Congress, but through business-to-business relationships and building business constituencies. That’s done in many ways, such as joint ventures, and by establishing closer economic relations on a daily basis. That will translate to a higher level of trust and collaboration, which will find its way into Congress. Since I took over, I’ve been trying to promote inclusiveness. Most organizations that are in this sphere have a voice. At the ATC, we are really excited to work with these other organizations when our interests align. Relevant, timely events are really what we’re going after, but they don’t have to be large. Some of our members prefer smaller, more focused events for specific topics or sectors.

What role can US businesses play in supporting Turkish companies’ ambitions to develop their own defense products?

We are in a transition phase now. Our Turkish members often tell me that they want to be partners, not customers. That is a very accurate way of putting it. Turkish defense companies want to do things with companies like Roketsan and Lockheed-Martin, who last year agreed on a missile deal for the F-35. Inherent in these types of joint ventures is technology and skills transfer. The impending Tor missile system is another example. The primary concern from the Turkish defense sector is that of learning new technologies and skills. Turkey has the manufacturing capacity, but it still lacks a certain amount of technology and engineering capacity. There are some incredibly well educated folks here in Turkey, of course, but it’s the nuts and bolts of applying the knowledge they have and adopting their own indigenous products. Through joint ventures and other partnerships, I believe US companies can help Turkey on its road towards indigenous technology.