Turkey’s exports to Russia grew 46 per cent by value over the past three months compared with the same period last year as Ankara allowed its companies to step into the gap created by an exodus of western businesses.
From May to July, Turkish exports to Russia were worth $2.04bn, $642mn higher than in those same months in 2021, according to export data compiled by the trade ministry and the Turkish Statistical Institute. For last month alone, the value of exports to Russia increased 75 per cent year on year, from $417mn in July 2021 to $730mn.
The $313mn rise between July 2021 and July 2022 was the largest for any country that Turkey exports to. Russia’s share of Turkey’s total exports in July was 3.9 per cent, up from 2.6 per cent 12 months earlier.
The surge follows an initial decline after Russia’s full-scale invasion of Ukraine in late February. While the overall sums involved remain relatively small — and are dwarfed by Turkey’s large imports from Russia, dominated by energy — the evidence of growing trade between the two countries is likely to irk western officials dismayed by talk of deepening economic co-operation between Ankara and Moscow.
Figures from the Turkish Exporters Assembly, an industry body, suggest sales of chemicals, fresh fruit and vegetables and other food products, along with textiles, electricals and furniture drove the increase in exports to Russia.
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A four-hour meeting between presidents Recep Tayyip Erdoğan and Vladimir Putin in the Russian resort of Sochi this month culminated in a joint promise of expanding collaboration on energy and trade, triggering warnings from western capitals that Turkey could face retaliatory steps if it acts as a conduit for sanctions evasion.
Turkey, a Nato member that has supplied armed drones to Ukraine while also seeking to maintain and deepen its ties with Russia, has not signed up to western sanctions, choosing instead to pursue what it calls a “balanced” approach to the conflict.
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Western officials have largely accepted that Ankara will not adopt the measures aimed at punishing Putin for the war against Ukraine.
However, EU member states are becoming increasingly uneasy about Turkey’s booming trade with Russia and the potential for it to assist Moscow as a substitute for other European imports and exports, two EU officials told the Financial Times. Some capitals have requested information from Ankara regarding its relationship with the Kremlin.
“It’s on our radar,” said one of the officials. “It’s not nice and is not being perceived well by the EU. It’s an irritant.”
A spokesman for the Turkish trade ministry said there was “not a remarkable change” in trade volumes with Russia. The person did not return phone calls when asked for additional details.
The lira has lost a quarter of its value against the dollar this year as Turkey sticks with a loose monetary policy despite runaway inflation. Relatively cheap Turkish products have helped boost export sales. In value terms, exports were 13 per cent higher last month than in July 2021, with sales to the US up by 25 per cent to $1.32bn, the trade ministry said.
Some Turkish officials are celebrating the growing commercial links with Russia. Adil Karaismailoğlu, the transport minister, said in a tweet that a 58 per cent jump in automotive trade by sea with Russia in the past three months, compared with the first four months of the year, showed the “leadership of Turkey” in opening sea corridors.
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EU sanctions against Russia, imposed in seven packages since Putin’s invasion of Ukraine, include bans on exports of cutting-edge technology such as high-end electronics and software, types of machinery and transportation equipment, goods and technologies used by the oil refining, energy, aviation and space industries.
Several western officials also voiced alarm at the idea that Ankara sees the exodus of western companies from Russia as an opportunity for Turkish businesses to step in — something that some Turkish officials and business figures have voiced in the past.
“At the time when the European Community is scaling down its ties with Russia in response to its aggression against Ukraine, it is not really appropriate to increase links or engagement with Moscow,” said Peter Stano, spokesman for the EU’s foreign and diplomatic arm.
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But potential action against Turkey is complicated by its role as a powerful and influential Nato member and its role in hosting almost 4mn Syrian refugees.
Western officials acknowledge that Erdoğan’s ability to negotiate with Putin remains an asset, as demonstrated by the recent deal to allow Ukraine to restart seaborne grain exports, which was brokered by the Turkish president along with the UN.
“It’s Turkey, everyone [in the EU] needs them, for one reason or another,” said a European official, who spoke on condition of anonymity owing to the sensitivity of the issue. “And the EU has to be aware of its abilities . . . we can’t just tell [Erdoğan] he has to follow our rules.”
Eir Nolsøe in London, Laura Pitel, Ayla Jean Yackley and Funja Güler in Ankara and Henry Foy in Brussels
Source: Economy - ft.com
