Despite Ankara’s official ban on trade with Israel, data from May reveals ongoing commerce between the two states, with Greece likely acting as an intermediary to facilitate continued trade.
An examination of import and export data from the Turkish Exporters Assembly (TIM) and Israel’s Central Bureau of Statistics (CBS) for May 2024 reveals an interesting trend. Despite Turkiye’s official declaration of halting all trade with Israel, commerce between the two states appears to persist, with Greece potentially serving as an intermediary.
In recent years, Turkiye has established itself as a significant trading partner with Israel due to its geographical proximity, competitive pricing, and product quality. Following the COVID-19 pandemic, Israeli businesses began diversifying their supply chains, reducing their traditional reliance on China.
Made in Turkiye
This shift led to increased interest in Turkish manufacturing capabilities. In early 2023, an Israeli logistics and supply chain management company, Gaash Worldwide, highlighted the advantages of Turkish production. Their analysis suggested that while Chinese factories were capable of high-volume production, Turkish manufacturers offered superior quality and durability in their products.
The trade relationship between the two countries encompassed a wide range of goods, from agricultural products and textiles to more sophisticated industrial items. The iron and steel sector dominated, with exports valued at approximately $1.2 billion annually.
The automotive industry also played a crucial role, with vehicle exports reaching nearly $563 million. Plastic and electronic equipment exports were similarly substantial, valued at around $516 million and $385 million, respectively. This trade pattern underscored Turkiye’s role as a key supplier of both basic commodities and high-value industrial goods to the Israeli market.
The economic relationship between Ankara and Tel Aviv underwent a significant shift following Operation Al-Aqsa Flood in October last year. Israel’s subsequent military operation in Gaza, now in its ninth month, wreaked devastation on the strip’s civilian population, killing mainly women and children and causing an urgent humanitarian crisis.
The occupation army’s atrocities and war crimes have incited widespread outrage among the Turkish public. Civil society organizations and the New Welfare Party (YRP), whose supporters are largely religious, organized nationwide protests demanding that Ankara cease all trade with Israel.
Political fallout and trade tactics
Initially, the Turkish Ministry of Trade tried to ignore these reactions. However, the political consequences became apparent in March when the Justice and Development Party (AKP) suffered a major setback in local elections, falling behind the Republican People’s Party (CHP) for the first time in 20 years. AKP strategists attributed this loss partly to some of their traditional voting base switching their support to the YRP in protest of continued trade with Israel.
In response to the political pressure, the administration of Turkish President Recep Tayyip Erdogan took decisive action. In April, Ankara imposed export restrictions on 54 categories of goods to Israel, in a move many suspected was orchestrated to placate the president’s various foreign and domestic constituencies. More comprehensive measures followed at the beginning of May when Turkiye announced the suspension of all import and export activities with Israel.
In response, Israeli importers began exploring alternative methods to maintain trade flows. One proposed strategy involved routing Turkish products through third countries, mainly in Europe, before their final transport to the occupation state.
This approach aimed to circumvent the restrictions while allowing Turkish manufacturers to continue supplying goods to the Israeli market indirectly. Israeli shipping companies, such as iShip Forwarding, developed new logistical routes transporting Turkish products to intermediary countries before their final destination in Israel.
While specific transit countries were not disclosed, Bulgaria and Romania were mentioned as options. Despite incurring additional costs, this method ensured the continued flow of goods between the two countries.
Israeli importers quickly adapted by using intermediate destinations, such as Slovenia, to maintain the flow of Turkish goods into Israel. This practice rapidly expanded as tensions between the two governments escalated.
Indirect routes and document loopholes
The circumvention strategy involved altering shipping documentation. Instead of listing an Israeli port as the final destination on the bill of lading, goods were initially shipped to a third-country port. From there, they were re-routed or re-exported to Israel under new documentation.
This method exploited the difficulties Turkish customs face in thoroughly investigating the ultimate destinations of exports, given the vast scale of Turkiye’s global trade network.
While the Turkish customs service is known for its rigorous inspection procedures, the sheer volume of exports makes it difficult to scrutinize every shipment’s final destination in detail. Consequently, Turkish exporters found they could ship goods to intermediary ports in countries like Bulgaria, Greece, and Egypt. The cargo would be transferred to different vessels with new paperwork at these locations, effectively obscuring their Israeli destination.
The effectiveness of Turkiye’s export restrictions on trade with Israel was, from the outset, limited due to such circumvention strategies. As Russia, Iran, and North Korea demonstrate, there are ways to circumvent even the toughest of sanctions regimes.
This is facilitated by Turkiye’s existing free trade agreements (FTAs) with various countries, including Israel and Egypt, and its customs union with the EU. The nature of Turkiye’s open economy and its network of trade agreements makes it challenging to fully enforce such restrictions. While using Egyptian routes might have seemed a logical alternative, the ongoing conflict complicated this option.
Greece as a key trade intermediary
Consequently, European channels appear to be the most viable alternative for maintaining Turkish–Israeli trade flows, albeit indirectly. Data published by TIM and CBS for May shows that trade between Turkiye and Israel continues via Greece, verified by the following statistics:
CBS figures reveal that in May, Israel imported goods worth $116.8 million from Turkiye, while TIM’s May 2024 data values Turkiye’s exports to Israel at $4.4 million.
Noteworthy is the significant increase in Turkiye’s exports to regional rival Greece during the same period. Turkiye’s exports to Greece in April 2024 were $226.3 million, which rose by $149.3 million in May, reaching $375.8 million.
TIM’s detailed export breakdown reveals that Turkiye’s steel and cement exports to Greece in April were $33 million and $4 million, respectively – figures that doubled to $60.7 million and $8.95 million in May.
CBS data shows that Israel’s imports from Greece in April were $33.2 million (compared to $37.2 million in April 2023), while in May, they amounted to $39.2 million (compared to $41.8 million in May 2023).
These figures suggest that the $149.3 million increase in Turkiye’s exports to Greece in May is due to exports to Israel being routed through Greek trading facilities.
Turkish trade ban – more symbolic than effective
As the data demonstrates, and similar to the ineffectiveness of sanctions against Russia in today’s world, Turkiye’s declaration of “halting all trade activities with Israel” lacks substantial effect.
Consequently, Ankara’s decision inflicts minimal damage on Israel, aside from slightly increased transportation costs.
It’s also worth noting that Turkiye’s decision does not encompass free trade zones. Israel can easily continue its trade with Turkiye through the Izmir and Mersin Free Trade Zones as an alternative option.
In today’s increasingly digitalized global economy, effectively obstructing trade has become virtually impossible; money invariably finds a way. Solutions driven by domestic political concerns often fail to produce meaningful results, as evidenced by the ongoing Turkiye–Israel trade despite Ankara’s officially declared restrictions.
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