Turkey, Mexico Looking at Collaboration to Realize PotentialBy Alessa Flores | Tue, 01/12/2021 - 09:09
Q: How would you describe the commercial relations between Mexico and Turkey for the Mexican business community?
A: Turkey and Mexico are important actors in the global economy in the scope of the G20, and strategic partners in MICTA group. Turkey is also an observer country in the Pacific Alliance. In line with the strong political relations between our nations, commercial relations have been accelerating in recent years. Mexico is our second-largest trading partner after Brazil in Latin America and the Caribbean, whereas in terms of exports, Mexico is our biggest export market, and third supplier in the region.
To explain in detail, bilateral trade volume between Turkey and Mexico reached its highest level in 2019, amounting to $1.4 billion according to the data obtained from the Turkish Statistical Institute. Turkey's exports to Mexico stood at US$668.4 million, while its imports reached US$742.1 million last year. In the first 10 months of 2020, bilateral trade volume was US$1.09 billion. Turkey’s exports to Mexico were US$433.1 million, while imports were US$663.8 million. Nevertheless, we believe that the amount of the bilateral trade is far from reflecting both countries’ potential. Hence, we are looking forward to developing new areas of collaboration and promoting new business opportunities in order to advance these trade figures to the desired levels.
Q: What opportunities do you see to bring the economic relationship between the two countries to its full potential?
A: Mexico was determined as one of the target countries by our Ministry of Trade in the 2018-2019 period and this continues for the term of 2020-2021.
As you know, Turkish Airlines’ direct flights to Mexico started in August 2019. On the occasion of the first direct flight, a delegation of business people from the Foreign Economic Relations Board (DEIK) and the Turkish Exporters' Assembly (TIM), led by our Deputy Minister of Trade H.E. Gonca Yılmaz Batur, held various meetings in Mexico City between Aug. 22-24, 2019, in order to address and improve relations in the fields of trade, economy and investments, to identify new opportunities for cooperation and to boost contacts between the private sectors of both countries. In this context, our Deputy Minister held a bilateral official meeting with her Mexican counterpart, Mexican Undersecretary of Foreign Trade H.E. Luz Maria de La Mora. As part of this visit, Turkish and Mexican businesspeople convened to exchange information on the trade and investment environment of the two countries and companies held B2B meetings at the Turkey-Mexico Trade and Investment Seminar, which was jointly organized by DEIK and TIM's partner organizations, the Mexican Business Council for Foreign Trade, Investment and Technology (COMCE) and BBVA Bancomer.
Last but not least, our Minister of Trade H.E. Ruhsar Pekcan had a meeting with Mexican Secretary of Economy H.E. Graciela Márquez Colín during the 50th World Economic Forum annual meeting in Davos on Jan. 22, 2020.
It is important to mention the Sectoral Trade Missions to Mexico that have been organized since last year in coordination with our Ministry of Trade. In scope of these trade missions, bilateral business meetings have been successfully held in order to know each other better and develop stronger ties. During the COVID-19 pandemic, we have continued trade missions by virtual means. Likewise, we carried physical trade shows into digital platforms. On this occasion, we would like to invite Mexican businesspeople to discover the trade potential between our countries through attending these organizations, and meeting manufacturers from Turkey in various sectors.
Q: In which sectors does Turkey plan to strengthen or grow its relationship with Mexico?
A: The product coverage of the bulk of our bilateral trade is still relatively limited. Nearly 20 percent of Turkey’s exports to Mexico is in the automotive and auto parts industries, whereas our other main export items are jewelry, iron and steel products, zinc ores and concentrates, and nuts. On the other hand, Turkey’s imports from Mexico are largely composed of wheat and meslin, polymers of vinyl chloride, telephone sets, medical appliances, cotton, and inorganic or mineral coloring matter. In order to increase the trade volume, we should diversify this product range to include other major industries of the food and agriculture, manufacturing, and services sectors.
Q: Mexico has a strong automotive sector that is highly attractive to Turkey. What is Turkey's participation in the automotive sector and how would you like to increase your participation in this sector?
A: First, let me give you a brief idea of the automotive sector in Turkey. The Turkish automotive industry has been the biggest exporting sector for the last 14 years, with over US$30 billion annual export volume in the last three years. With a production capacity of 2 million units and vehicle production capacity of 1.5 million units, Turkey is the 14th-biggest motor vehicle manufacturer in the world and fourth-biggest manufacturer in Europe.
Turkey has been participating nationally in INA PAACE Automechanika Mexico City trade show every year since 2013. Unfortunately, our companies could not have a chance to meet their Mexican partners this year physically, yet they are looking forward to those opportunities in the coming years. Most recently, a digital sectoral trade mission was organized to Mexico by the Uludag Automotive Industry Exporters' Association from June 25-July 2, 2020. During this digital event, representatives of the 21 Turkish companies held bilateral meetings with Mexican aftermarket importers, suppliers, wholesalers, and distributors. We attach great importance to these events to strengthen our cooperation and trade with Mexican counterparts.
Q: The establishment of a direct flight from Turkey to Mexico was a trigger for tourism between the two countries. What other mechanisms could help boost tourism and cooperation between the two countries?
A: In fact, Turkish Airlines’ direct flights to Mexico City and Cancun from Istanbul, which started in 2019, has been an important step to strengthen our relationship and boost tourism. There is a tremendously increasing demand from Mexico to visit Turkey, as well as from Turkey to Mexico. We know that Turkish TV series and movies have a major role and contribution to this interest from the Mexican side. On the other hand, Turkish Cargo’s operations in Mexico since 2018 also have been a trigger for mutual trade. As a result, the physical distance between our countries is no longer an obstacle for strengthening bilateral ties in terms of tourism and commerce.
Actually, we were planning to organize a “Day of Turkey” event in Mexico City in April this year, with a delegation of businesspeople on that occasion led by our Minister of Trade. However, we had to postpone this planned organization due to the conditions of the COVID-19 pandemic. We hope to organize this event in Mexico in the nearest time possible depending on the developments with regard to the pandemic.
On the other side, the Joint Economic Commission is essentially a comprehensive economic mechanism established at the ministerial level. Holding the second session of the Joint Economic Commission next year will contribute to bilateral efforts to enhance mutual economic and commercial relations and increase cooperation in a wide range of areas, including trade, energy, tourism, transportation, agriculture and investments.
Q: In which sectors do you consider that Turkish companies are interested in investing in Mexico and how much did Turkey invest in Mexico in 2019-2020?
A: Mexico is an attractive country for foreign companies due to its strategic location, free trade network, large domestic market, and talented workforce. We could mention that the value of Turkey’s net investment in Mexico has amounted to US$15 million. The automotive industry is the most outstanding sector in our investments to Mexico, in addition to other key sectors such as medical, textile, machinery, jewelry, tourism, media, logistics, trade and services. As in the case of commercial relations, we need to diversify our investments in Mexico to cover other major industries so that we could further build stronger ties and increase the scope of activities.
Q: What benefits or advantages would you highlight for companies that are looking to do business with Turkish companies or in Turkey?
A: Turkey has a valuable/pivotal role between the European, Middle Eastern and Central Asian countries as well as the Caucasian region in terms of trade. As a natural bridge between East and West and the North-South axes, Turkey is an efficient and cost-effective hub to major markets, offering easy access to 1.7 billion people and a market worth US$25 trillion in GDP and US$7.8 trillion in trade within a four-hour flight radius.
With a population of 83 million, half of which is under the age of 32.4, Turkey has the largest youth population in Europe. It has over 32 million young, well-educated and motivated professionals, and more than 800,000 annual university graduates, Turkey has a skilled and dedicated labor force. Currently, Turkey ranks as the 19th-largest economy in the world and the seventh in Europe. Our economy has more than tripled over the past 17 years: it is the fastest-growing economy in Europe and the OECD with an average annual real GDP growth rate of 5.3 percent in the 2003-2019 period. Moreover, Turkey ranked 33rd across 190 economies, according to World Bank’s Ease of Doing Business Ranking 2020.
Finally, with the new dynamics of the global supply chains, Turkey offers a great alternative for companies, which have been looking for alternative supply sources. This makes Turkey's position as a regional hub significantly stronger.
Q: What difference would signing a Free Trade Agreement make to the future trade relationship between Turkey and Mexico?
A: A Free Trade Agreement (FTA) is certainly one important forward step toward development of our bilateral economic and commercial relations. In this regard, we hope to resume the stalled process of FTA negotiations in 2016 and finalize a meaningful and mutually beneficial FTA between our countries, catering to each other’s priorities and sensitivities, in the shortest possible time.