Following Turkey’s decision to halt all trade with Israel because of the war in Gaza, there are concerns that bilateral relations might deteriorate further.
Experts speaking to VOA Turkish argue this is a dramatic change in ties, whereas previously the economic aspect was usually the last one to incur damage despite political tensions.
Turkey announced last month it was restricting the export of 54 items to Israel, including steel, construction products and chemical fertilizers. And earlier this month, Ankara took the unprecedented step of halting all trade, sending Turkish and Israeli traders scrambling for alternatives.
Turkish-Israeli ties have been strained since a 2010 incident in which Israeli commandos raided the Turkish-owned Mavi Marmara aid ship sailing for Gaza in international waters.
Despite tensions throughout their unsteady relationship, impacted at times by the domestic political dynamics of each country, the trade component of their relations largely remained intact.
Nimrod Goren, Israeli affairs expert at the Middle East Institute, said the recent move was a “game changer.”
“One of the unique characteristics of the relations was every time there was political tension, the economic relations managed to continue. Now it’s a big-time change in the nature of relations,” he told VOA in an interview via Skype.
Gallia Lindenstrauss, from the Institute for National Security Studies in Israel, is worried that diplomatic relations might also be in danger.
Likening the trade component to “oxygen” for the bilateral ties, she said, “Trade was in a way [an] insurance policy for the relations. When you take out trade, you are not left with a lot.”
Call to 'work through differences'
Turkey and Israel appeared to be on a path of rapprochement until the war in Gaza reversed those efforts.
Just a few weeks before the October 7 Hamas attack on Israel, Turkish President Recep Tayyip Erdogan and Israeli Prime Minister Benjamin Netanyahu met in person for the first time on the sidelines of the U.N. General Assembly in New York. The two leaders committed to mutual visits.
Goren said that before the Hamas attack took place, relations between Turkey and Israel were good.
“The starting point this time for Turkey was a very good one. Turkey had good relations with Israel, and it had better relations with Egypt. Those were the two things that prevented Turkey from mediating in the Israeli-Hamas escalation in the past,” he said.
The United States called this week on Turkey and Israel to resolve their differences. When asked about Turkey’s trade ban with Israel, State Department spokesperson Matthew Miller said, “They are both allies of ours and we would encourage them to work through their differences.”
Businesspeople in limbo
Turkey and Israel conducted $6.8 billion in trade last year. A free-trade agreement between the two countries has been in place since 1997.
According to the Turkish Statistical Institute, or TUIK, Israel ranked 13th among the countries Turkey exported to the most in 2023.
Israel imported vehicles, construction materials, steel and textile products from Turkey.
There has been concern that the trade ban would have an impact on Azerbaijan oil shipped to Israel via the Baku-Tbilisi-Ceyhan pipeline. The oil tankers bound for Israel are loaded at Turkey's Ceyhan port.
Energy Minister Alparslan Bayraktar told VOA Turkish that Turkey's function is to transmit and load the oil. It continues to operate the pipeline as part of an international agreement, he added.
Ankara says the trade ban will stay in place until there is a permanent cease-fire in Gaza. The talks in Cairo have yet to yield results amid concerns of a bigger military action by Israel in Gaza’s southern city of Rafah.
“The war is not in the same level of intensity. But it might prolong. Businesspeople don’t like uncertainty. They are in limbo now. If it’s temporary, it’s one thing. But if it’s going to be prolonged, it will be very, very hard to get back to square one,” Lindenstrauss told VOA.
Israeli Foreign Minister Israel Katz posted a tweet Thursday on X saying Turkey had retracted many of the trade restrictions, easing the trade ban. Turkish Trade Minister Omer Bolat dismissed his claim as “absolutely fictional.”
However, the Turkish Trade Ministry reportedly introduced a three-month respite for firms to fulfill their existing orders via third countries. A source from the ministry told Reuters the move aims to protect Turkish traders, while another source denied any easing of the ban.
This story originated in VOA’s Turkish Service.
