Israel renewing ties with Turkey is a bigger deal than the Abraham Accords
The reestablishment of full diplomatic relations between Israel and Turkey is perhaps the most important diplomatic event for the Jewish state in the past few years — and yes, that includes the Abraham Accords.
Do not get me wrong: The Abraham Accords were an amazing diplomatic accomplishment worth celebrating. But in terms of potential tangible opportunities for the people of Israel, particularly economic opportunities, Turkey is a much bigger story.
Though Turkey was the first Muslim-majority country to officially recognize Israel in 1949, relations became increasingly strained during and after the 2008 Israel-Gaza conflict. The 2010 Mavi Marmara incident, during which nine Turkish citizens were killed in an IDF raid on an activist ship attempting to break the naval blockade of Gaza, pushed the two governments even further apart.
Netanyahu, who was Israel’s prime minister during most of the years since, also didn’t try very hard to find common ground. And the rhetoric of Turkey’s President Recep Erdogan, in power since 2014, has been, to put it mildly, aggressive towards Israel, mostly driven by Erdogan’s strong stance on the Israeli-Palestinian conflict. Turkey, one of Israel’s oldest friends in the neighborhood, suddenly became a hostile country.
In the meantime, Israel has made significant efforts to expand its relations with other nations. The mutual admiration between Netanyahu and India’s Prime Minister Narendra Modi and with Brazilian President Bolzonaro boosted bilateral relations between Israel and these two countries. And in 2020, the Abraham Accords came to fruition, allegedly opening a new world of opportunities between Israel and smaller Muslim nations, such as Bahrain and the United Arab Emirates.
All in all, the impression was that Israel had replaced Turkey as a strategic diplomatic partner. But despite all the efforts of looking for other partners, Turkey still today presents a sea of opportunities for Israel, perhaps more than other countries with which Israel has become closer.
For one, Turkey is one of the largest economies in the Middle East, estimated to produce about $800 billion per year, and is home to 85 million mostly young consumers, making it a huge potential market for Israel. While Israel has other important trading partners, such as the European Union and the United States, the numbers themselves show the importance of Turkey as a trade partner for Israel.
In 2020, trade between Turkey and Israel amounted to about $6.2 billion, about 1.5% of Israel’s GDP, and about 60% more than the $3.8 billion in aid Israel receives in U.S. military assistance annually (excluding support for the Iron Dome system).
For Israelis, importing goods from Turkey represents an important opportunity to lower the cost of living for the average citizen. Imports from Turkey to Israel, which account for nearly 7% of all imports, include many consumer goods such as agricultural products and all kinds of clothes and appliances, among others, potentially lowering prices in the market.
While it is fair to say that economic relations between Israel and Turkey were never fully interrupted, it is impossible to deny that better diplomatic relations can play a role in opening additional economic opportunities between nations. Since 2014, exports from Israel to Turkey shrunk from $2.8 billion annually to $1.5 billion in 2020. Therefore, there is space to deepen the relations further, especially if the Turkish economy goes back to a path of growth, which is particularly possible if the 2023 elections result in a new government that deviates from Erdogan’s failed economic legacy.
While Israel devoted efforts over the past years to deepening economic relations with other large and important faraway markets, such as India and Brazil, or establishing new relationships with other neighbors, such as the United Arab Emirates, those new partners — while also full of opportunities for Israel — won’t substitute for the advantages of a robust Israeli-Turkish economic corridor.
Why? Because, simply put, Turkey has two important advantages from the Israeli perspective: It is both big and nearby, making it an ideal market for the high-end products and services Israel can offer, and an ideal partner for imports of the things that Israeli consumers can buy at competitive prices, without incurring excessively high transportation costs.
Trade is just one measure out of many economic indicators. But its numbers reflect very well the strength of the relationship between two countries. Trade numbers also reflect the extent to which the peoples of two countries interact and work together. In that sense, Israel has a lot to gain by renewing its relations with Turkey, as Israelis and Turks rebuild the historical bridges between their people.
Israel should continue to develop its diplomatic and economic relations with all nations, but safeguarding and strengthening the relationship with Turkey is of first order.