Turkey balances trade with Italy
Italy is a manufacturing and export hub of Europe. Some 75 -80 percent of companies with high caliber of design and quality export their products to the world.
The bilateral trade balance between Turkey and Italy had traditionally been in favor of the latter until 2019, when Italian companies lost their competitive advantage due to the drastic appreciation of forex rates in Turkey, Aniello Musella, the head of Trade Promotion Office of the Italian Trade Agency in Turkey, said.
In the first two months of 2019, trade balance weighed in favor of Turkey for the first time in decades. Italy ranked as the 4th commercial partner with 2.8 billion in total bilateral trade in the first two months of this year, according to TURKSTAT and Italian Trade Agency figures.
The bilateral trade decreased by 16.9 percent when compared to the same period of 2018. Turkey had $1.2 billion in imports (-31.8 percent) and $1.6 billion in exports (-0.7 percent) with a positive balance for Turkey of $414 million in
the two month period. The deficit in the same period of 2018 was $124 million.
In February 2019, Italy confirmed Turkey as the fifth supplier after Russia, China, Germany and the United States and the third customer after Germany and the United Kingdom.
Italy ranked as the fifth commercial partner in the full year 2018 with total bilateral trade of $19.8 billion, a 0.3 percent decrease when compared to 2017, of which $10.1 billion was in imports (-10.2 percent) and $9.566 million exports (+12.9 percent) and a negative balance for Turkey of $588 million.
There is a $4.5 billion stock of investment in Turkey, Musella said. Fiat, Pirelli, Barilla and Ferrero are among dozens of other Italian companies in Turkey, he added. Some 900 to 1,000 Italian companies invested in Turkey for either manufacturing or distribution, Musella noted.
The bilateral trade relations have been in an increasing trend and pharmaceutical, chemical and textile companies have been active in trade relations, he said.
The FDI desk Musella heads in Turkey helps Turkish investors to establish businesses in Italy, without any fee. It is the first of its kind, which now exists in 12 countries.
Although Italian companies lost their competitive advantage after the devaluation of Turkish currency in 2018, it created an advantage for Turkish companies to cooperate with their Italian counterparts and invest in Italy, Musella noted.
Textile and furniture are two industries that has a great potential between the two, he said. Turkish investors could find a familiar culture in Italy and cooperate with designer brands that are well known in fashion, garment, lighting and furniture companies in Italy.
Trade fairs in Italy, especially the furniture fair in Milano and other fashion shows, create an opportunity for Turkish companies and investors, he said.