Foreign Trade News from Turkey

World Trade Organization hails historic first global trade agreement (December/07/2013).

Commerce ministers capped days of hard negotiations Dec. 7 by approving a WTO agreement on international commerce they hailed as a "historic" boost for the trade body. The agreement falls far short of the World Trade Organization\'s lofty but elusive vision of tearing down global trade barriers through its frustrating, 12-year-old DohaRound of talks. But the accord reached on the Indonesian resort island of Bali nevertheless marks the first global agreement struck by the Geneva-based body since its 1995 founding. "For the first time in our history, the WTO has truly delivered," an exhausted but relieved WTO director-general Roberto Azevedo told a closing ceremony. "We have put the \'World\' back into the World Trade Organization," he told delegates. The pact includes commitments to facilitate trade by simplifying customs procedures. The meeting also formally accepted Yemen as the group\'s 160th member. The Washington-based Peterson Institute for International Economics estimated in a report this year the customs measures could create $1 trillion in economic activity and 21 million jobs if properly implemented. The report did not detail how those figures were calculated. WTO officials have conceded however that uncertainty surrounded how effectively the measures would be implemented, especially in underdeveloped countries. Azevedo said it had important symbolic value for Doha. "The decisions we have taken here are an important stepping-stone toward the completion of the Doha Round," he said, adding the WTO would soon get to work on a "road map" for reviving Doha. Global trade rules The Doha Round aims to remove hurdles to commerce and establish a globally binding framework of trade rules fair to both rich and poor countries. But protectionist disputes among the WTO\'s members have foiled agreement. Azevedo has expressed concern over the rise of alternative regional trading pacts that he fears could render the WTO obsolete if the Geneva-based body did not start clinching major worldwide agreements. The Bali negotiations teetered repeatedly on the brink of collapse due to various differences. India - which aims to stockpile and subsidise grain for its millions of poor - had demanded that such measures be granted indefinite exemption from WTO challenge. The United States, which implements large farm supports of its own, and others had said India\'s grain policy could violate WTO limits on subsidies. A later hurdle emerged as four Latin American countries objected to the removal in the accord\'s text of a reference to the U.S. embargo on Cuba. Compromise wording smoothed over those hurdles. The agreement will come as a major personal victory for the Brazilian Azevedo, who took the organisation\'s helm in September and injected a sense of urgency into the talks. "With this landmark accord on trade facilitation and other issues, the WTO has re-established its credibility as an indispensable forum for trade negotiations," the U.S. Chamber of Commerce said in a statement released in Washington. The package also included pledges to limit agricultural subsidies, and policies to aid least-developed countries. As the Doha Round has faltered, alternative regional pacts have emerged between major trading nations, such as the 12-country Trans-Pacific Partnership (TPP) spearheaded by Washington. TPP negotiators hold their latest meeting in Singapore starting Saturday as they work to hammer out the outlines of that trade alliance.

NUSA DUA - Agence France-Presse /Photo REUTERS

 

New FDI to make Turkey a regional production hub.

Alubond USA, the world’s leading brand for exterior wall claddings, has established a regional production center in Turkey to meet the demands of the European, Russian and Turkic Republics’ markets.  A joint venture between AlubondUSA and Turkish Aldom A.Ş. will build the production facilities with an initial $100 million of investment in the northwestern province of Çorlu.  The group aims at reaching $500 million of yearly revenue by creating around 500 new jobs. The facilities will be built on some 100,000 square meters of area.  Alubond USA has been branded in the U.S. and worldwide by American Building Technologies INC located in Rockford Illinois and in the U.A.E by Eurocon Building Industries (A Mulk Holdings group company).Under a 2004 sale agreement between ABTI and Mulk Holdings, The brand and manufacturing rights were sold for exclusive use by Mulk Holdings U.A.E. Mulk Holdings currently holds worldwide manufacturing and distribution rights of the Alubond USA brand worldwide.  Turkey has been growing in a stable manner despite the global economic crisis. We have decided to establish such a big production plant in Turkey as we believe Turkey has a strategically crucial position, neighboring Europe, Russia and Iraq, among others,” said Mulk Holding Chairman Nawab ul Shaji, adding that Alubond Turkey would be the largest producer of noncombustible aluminum composite panel in the near future.

Source:Hurriyet Daily News

26 Turkish consortiums apply to develop locally produced drugs (December 04,2013).

Science and Technology Minister Nihat Ergün has said 26 consortiums have applied to the ministry to take part in developing Turkey\'s first domestically made pharmaceuticals for cancer and kidney patients. "Biotechnological drugs are starting to take center stage in the medical field and will be very significant in the next 10 to 20 years. These biotechnological drugs which will be developed in Turkey will target diseases related to cancer, kidney failure, diabetes, hepatitis and hormone production," he said. According to Ergün, the number of applicants to domestically produce drugs has exceeded expectations and the Scientific and Technological Research Council of Turkey (TÜBİTAK) will provide 100 percent support in the project. He further said almost all of the pharmaceuticals produced in Turkey are generic brands which cover 49 percent of the country\'s medication needs, while 51 percent of medication in the market is imported. 

Source : Today\'s Zaman

Fed taper to have ‘limited’ effect on Turkey: Moody’s.

Credit Rating Agency Moody’s says the US Federal Reserve’s tapering is likely to have a limited impact on Turkey’s economy that has sufficient buffers to withstand medium-term challenges

A potential tapering of the U.S. government’s quantitative easing (QE) program is likely to result in higher funding costs, greater funding outflows and a reduced availability of credit across global financial markets but the impact on various sectors of Turkey’s economy will likely be limited and short-lived, Moody’s Investors Service has said. “If and when the U.S. Federal Reserve begins QE tapering, Moody’s would expect Turkey to face medium-term challenges in meeting its current account financing needs. However, the sovereign’s balance sheet and its economy possess sufficient buffers to withstand likely medium-term challenges linked to meeting its own financing needs in a QE tapering scenario,” it said on Dec. 2. The rating agency added that a range of tools introduced since the 2009 recession have strengthened Turkey’s ability to withstand volatility in capital flows. Turkish banks can handle tapering Moody’s also said Turkish banks would be able to cope with challenges arising from tighter funding conditions that are likely to result from QE tapering. “Despite a somewhat greater reliance on foreign  market funding since 2009, and the resulting increase in the Turkish banking system’s vulnerability to potentially volatile wholesale market conditions, Moody’s considers the system’s likely exposure to the effects of QE tapering to be moderate and its liquidity resources to be sufficient.” Moody’s noted that QE tapering would have “a moderately negative impact” on Turkish corporates in light of a number of vulnerabilities stemming from corporates’ dependency on bank funding, mostly with short maturities, in foreign currencies and at floating interest rates. Turkish covered bonds will be more resilient to the effects of QE tapering than the above sectors. The sector’s legislative framework and market practice offer investors credit protection against potential increases in non-performing loans and declines in property values, it said.  Moody’s upgraded Turkey’s government bond ratings by one notch to Baa3 from Ba1, and also assigned a stable outlook to Turkey on May 16.

Source:Turkish Daily News