Please contact Selin Bulbul for the full 2013 Country Commercial Guide.
Turkey’s rapidly expanding economy, political and economic stability, and the possibility of EU membership continues to attract the attention of a variety of American companies. In 2011, U.S. exports to Turkey reached a record $14.7 billion, and while 2012 brought a slight decline in exports ($12.6 billion), total U.S. – Turkey trade remained at a near record of more than $19 billion. Turkey’s financial sector is stronger than that of many other countries, due in part to a series of reforms in the wake of the 2001 financial crisis which left Turkish banks better leveraged than many of their U.S. and European counterparts.
Across many sectors, U.S. exporters have excellent immediate and medium-term prospects in this diverse market. As a growing regional transportation hub, the civilian aerospace market presents some of the greatest opportunities for U.S. exporters. The highlight of these opportunities will be the construction of the new Istanbul Airport. This airport, which will be one of the world’s largest, will present more than $1 billion worth opportunities for U.S. equipment and service providers over the course of the next few years.
Additionally, one of the most important sectors for the next decade will be energy. Electricity demand has been growing at more than 6 percent per year, and will continue to grow rapidly. Turkey expects continued economic growth, which will require additional generating capacity to meet growing demand. U.S. suppliers and service companies can benefit from opportunities in electricity and gas distribution, power generation and renewable energies, particularly wind and solar.
Opportunities also exist in telecommunications services and equipment, safety and security equipment and services, automotive parts, medical equipment, R&D, transportation, infrastructure and higher education services.
Turkey sends the largest number of students among all European countries, around 12,000 each year, to U.S. colleges and universities. Turkish companies are eager to partner with American firms, and are seeking technology and financing, particularly from the U.S. to grow their businesses.
In recent years, Turkey’s market reforms, strong growth and economic and political stability have attracted a significant amount of Foreign Direct Investment (FDI). Despite a decline in FDI inflows as a result of the global economic crisis, according to the United Nations Conference on Trade and Development (UNCTAD), Turkey recorded the 9th highest growth rate globally in FDI inflows. In 2011 and 2013, new investments by the U.S. companies Cummins, Pratt and Whitney, AES, Dow, GE, 3M, AMGEN, and Pfizer demonstrated increasing American private sector interest in Turkey.
In 2005, the EU and Turkey began formal EU accession negotiations. Turkey has adopted many European Union directives, regulations and laws in anticipation of accession. While continued delays have cooled popular interest in EU membership, Turkey’s political and business leadership remains committed to joining the EU, and the current government understands that the process itself contributes to Turkey’s global competitiveness. The planned US-EU Transatlantic Trade and Investment Partnership (TTIP) negotiations hold great importance for Turkey, given its obligations under the Customs Union with the EU. In 2013, the U.S. and Turkey agreed to create a High Level Committee, led by the Turkish Ministry of Economy and the U.S. Trade Representative, to study the effects of TTIP on Turkey’s economy.
Turkey is a long-term ally of the United States and a charter member of NATO with strong links to global institutions and a key role to play in most of the major regional issues such as Syria, Iraq, Afghanistan and Cyprus. However, bilateral relations have been occasionally difficult. Under the Obama administration, continued high-level government contacts have created a constructive atmosphere with a special emphasis on building bilateral commercial relations. The bilateral Framework for Strategic Economic and Commercial Cooperation and the private sector-led U.S.-Turkey Business Council are examples of intensified efforts to increase bilateral trade and investment.
Over 1,200 American firms are registered in Turkey, ranging from large multinationals to small and medium size firms. While Turkey’s economic growth slowed in 2012, the longer-term prospects for many American firms in Turkey remains excellent.
The Republic of Turkey is a complex and challenging market requiring adaptability and persistence.
U.S. exporters face many of the same challenges that exist in other semi-developed countries, such as contradictory policies, regulations and documentation requirements, lack of transparency in tenders and other procurement decisions, and a time consuming, unpredictable judiciary and legal and regulatory framework. Careful planning and patience are the keys to success in Turkey.
The Republic of Turkey’s movement toward membership in the European Union is creating momentum to adopt European business regulations and standards in Turkey, thereby ultimately making it easier to sell and conduct business in this market. Similarly, reforms since 2001 have created a strong and stable economy that attracts foreign investment, which in turn will be followed by needed capital improvements and demand for new products and services.
The U.S Commercial Service in Turkey has identified a number of market opportunities, described in the full CCG document, for U.S. firms and continues to work with companies to enter the Turkish market, expand market share, or jointly enter third country markets.
Turkey is the commercial hub of the region, and U.S. companies should consider using Turkish partners to access business opportunities throughout Central Asia, the Caucasus, the Middle East and even Africa. Turkish partners know these neighboring markets well.
While there are many significant opportunities for U.S. companies in Turkey, there are also obstacles impeding entrance into the market. Any market entry strategy for Turkey should begin with a thorough understanding of the costs and benefits to doing business in Turkey.
One of the most successful, proven ways to access the market quickly is to work with an experienced local partner. This partner could be in the form of a local representative, liaison office, agent, or distributor. The local partner can provide knowledge of the local regulatory framework, language assistance and valuable business contacts. As business develops, companies may open subsidiaries and make further local investments to expand their market share.
The U.S. Commercial Service in Turkey has a number of programs and services available to assist American businesses in establishing a presence in this market and developing appropriate contacts. Staffed with experienced Commercial Specialists with many years of industry and sector expertise, the U.S. Commercial Service team in Turkey can tailor your business approach to the right audience, and provide advice on your business strategy in Turkey. Please refer to our list of services for U.S. companies.
To conduct a more thorough search for market research reports on specific industries and sectors for Turkey, please consult the U.S. Commerce Department’s Market Research Library.