Our Exporters Are Able To Turn Global Crisis Into Opportunity

There's something we always repeat: Trade is like water; it always finds a path to flow. During the pandemic, we witnessed this phenomenon vividly, and for the past few months, especially after the attacks on trade ships passing through the Suez Canal by the Houthis, we are seeing it in Asia-Europe maritime transportation. Western container operators, who control a large portion of global container transportation, halted their passage through the Suez Canal and began following the route discovered by Bartolomeu Dias six centuries ago around the Cape of Good Hope.

This elongated route has had adverse effects on transportation costs, leading to a negative impact on global inflation. Turkish logistics firms have been working on alternative routes for Asia-Turkey shipments, yet our exporters cannot escape the additional costs. This situation is not unique to us alone. Studies suggest that the impact of the Cape of Good Hope route on the European Union economy could reach up to 135 billion Euros.

Our exporters' greatest advantage lies in their ability to swiftly devise solutions in challenging conditions. I believe that our exporters' flexibility was the fruit of remaining in surplus despite the global trade contraction the previous year and achieving the highest export figure in the history of the Republic in the first month of the year, while the storm was still raging outside.

Due to rising labor costs in our country, many of our sectors have started to lose their competitiveness in the global market, and we are beginning to see the adverse effects of this on exports. In January, our sectors most affected by losses were ready-made garments, iron and non-ferrous metals, leather, olives and olive oil, cement, glass, and ceramics.

We have formally conveyed our request to raise the minimum wage support to 1,400 TL to the President and the economic administration. Should this request be met, it would facilitate the reintegration of our sectors and further fortify the competitiveness of our existing industries.

This would enable us to transform the crisis stemming from the re-routing of trade routes into an opportunity. Freight costs have surged even more in the past two months compared to the rise observed during the pandemic period, and they are expected to continue escalating as the issue persists.

Turkish exporters possess the capacity to turn such crises into opportunities, and with the backing of our government, we are poised to achieve this. While our pursuit of new markets to boost exports remains ongoing, the European market will invariably play a pivotal role in realizing our objectives.

At such a time when the EU economy has suffered enough economically from the Ukraine-Russia war and is struggling with inflation, the extra cost due to the Red Sea will accelerate the search for solutions.

Europe is actively pursuing parity not only in its standards for environmental and product quality but also in product pricing. Turkish exporters have the potential to offer the solution sought by the EU, aided by the provision of employment support.