TAİK BCG Report - Re-thinking Turkey-US Economic Relations in the Covid-19 Context
Covid-19 has a strong effect on global economic relations via supply chains, global trade and investments
- Multi national companies that have cost focused supply chain systems have started to consider reducing the risk profile of their supply chain systems more diversification, regionalization or reshoring
- Existing trade conflicts have been escalated to a new level with increasing trends in favor of national protectionism
- Trade and investments will be negatively affected in the short term; but new opportunities will exist for countries and companies
Major shifts will occur in trade corridors, emerging as a significant opportunity for other countries to increase their exports and to attract FDI
- The export volume from China will shift away to other regions; the largest impact being between US and China trade corridor
- We expect $130 200 B decline in US China trade corridor in 2023 compared to 2019 levels
- This will provide significant trade and investment opportunity for countries like Turkey, Vietnam, Mexico, Taiwan and Poland
Turkey's conventional industries will remain to be important...
- Turkey has conventionally strong industries (e.g. automotive parts, textile, white goods, building materials, furniture etc.). These industries will remain to be the engine of exports to US
- Some other competitive industries (e.g. tourism, civil aerospace and jewelry) will stagnate because of Covid 19 context but will recover and contribute in mid to long term
… but in order to larger pie from this shift, Turkey needs to make bold moves in new industries and geographies
- Turkey needs to make bold moves in digital space and electronics to serve more to the US market
Digital space: Turkey has strong but underutilized potential in data services, software services and technology startups
Electrical equipment & electronics ( E&E ): Turkey has to invest in E&E , especially new trends (Industry 4.0, IoT, smart cities etc.) crosscutting the segment. This will be key to serve US market in large scale
- Joint ventures in Africa: Turkish and American firms have complementary skills to be more active in helping construction and infrastructural upgrading in the African continent
Business communities could play an important role in strengthening Turkey-US economic relations and to further explore underutilized opportunities
- Turkish and US business communities could play an important role in:
1. Building up long term trust based business relations
2. Actively marketing new opportunities and capabilities to both sides
3. Help business matching activities
4. Constructively guide policy makers on key steps to be taken
- We strongly recommend establishing three task forces under TAIK to steer actively key topics of interest and to contribute to Turkey US economic relations:
1. Digital Taskforce
2. Electronics Taskforce
3. Africa Taskforce
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