The ongoing tensions between the US Government and Turkish Government had its impact on IMF-World Bank Meetings as well. Despite escalating tensions between the two countries, it can be observed that the US economy improves significantly.
Maintaining the 25th spot in world GDP per capita ranking, the US economy has faced some quite promising developments over the last week. First of all, the fact that the PPI has turned out to be higher than expected caused expectations of CPI to increase with enlivening demand. And the fact that the number of people seeking U.S. unemployment benefits fell to its lowest level since late 1969 October was also worthy of notice. It’s considerably promising news given the US population growth over the last 50 years and ever-increasing number of immigrants.
In the eyes of Fed members, FOMC members or not, all the facts I mentioned above indicate that the economy is doing pretty fine and it will get better and better. But none of these can be considered a valid reason for the Fed Chair to change his projection of no rate hikes or only one hike in 2019 as the statistics in the US can change weekly, instead of monthly. If this positive trend keeps going, Trump would guarantee his second term as US President, which would not be good news for us.
Last Friday, Prof. Dr. Çağrı Erhan and I have given a conference on Turkey-US Relations at Büyük Kulüp. The conference covered a details anatomy of bilateral relations including, the first tense contact in 1830s and the following improvement of diplomatic relations with the proclamation of Turkish Republic, WWI, Korean War, the Jupiter affair, İncirlik, Cyprus Peace Operation, Embargos, Strategic Partnership, Gulf War, F-16 fighter aircraft, Patriot Missiles etc. Dr. Efe Sıvış’s latest work shedding a bright light on the history of Turkey-US relations was a big success. Although he attended the event as a guest, Prof. Dr. Ahmet Kasım Han also made valuable contributions to the conference by especially pointing out that Turkey should continue its “balance diplomacy” process very carefully.
“The US uses its position of power in an abusive way…”
Here’s a quick summary of what I shared with the conference participants: If Turkey had a strong trade relationship with the US, we would be glad to see US economic improvement. With the current state of affairs, however, we can only be happy for the world economy. The relationship between the US and Turkey has been based merely on defence industry and imports for the last 30 years. While the US-Turkey Business Councils I’ve attended up until today were always held under the shadow of military delegations of both parties, none of the textile talks yielded positive results. As opposed to Israel neighbouring countries, Turkey has never been given the opportunity to take advantage of the free trade agreements with the United States, such as Qualifying Industrial Zones (QIZ); according to the agreement goods produced in QIZ-notified areas can directly access US markets without tariff or quota restrictions). For this very reason, many Turkish companies had to operate their businesses in Jordan and Egypt, resulting in big losses most of the time.
Today, because of mutual Israel-US policies dominating the region, Turkey is facing more and more difficulties selling good to the US market. As once a top Iron-Steel provider to the US, sadly today Turkey faces unwarranted sanctions as part of the US Government’s anti-dumping actions.
The United States accounts for the one-third of world imports. Selling products to brings prestige as well as big profit. But the US Government uses its position of power in an abusive way. And the fact that the EU slaps large fines on US companies arises from American attempts to bend the European competition rules to accommodate the US interests.
I hope, one day, Turkey-US relations will go beyond a military standpoint and strong trade ties will be built between the two countries. But I must admit that I don’t feel very optimistic for the short-term.