Actualizing Potential: An Outlook on Turkey-Kurdistan Trade

In a recent interview with Kurdistan Chronicle, Mehmet Kaya, Chairman of the Diyarbakır Chamber of Commerce and Industry, evaluated the current state of commercial relations betw

Actualizing Potential: An Outlook on Turkey-Kurdistan Trade
December 28, 2023

In a recent interview with Kurdistan Chronicle, Mehmet Kaya, Chairman of the Diyarbakır Chamber of Commerce and Industry, evaluated the current state of commercial relations between Diyarbakır and the Kurdistan Region of Iraq (KRI). He shared his ideas and suggestions for improving them and actualizing their promise in the near term.

Pointing out the immense commercial potential of the KRI for Turkey’s trade activities, Kaya stated that the close ties of brotherhood and language that are nurtured by being neighbors are the primary sources for this latent potential.

Missed opportunities

Underscoring the importance of commercial developments for Turkey and the KRI, Kaya referred to the fact that export figures have essentially remained the same since the 2010s. “We have the same trade figures today as we did ten years ago. While the KRI is growing its share of Iraq’s national income, Turkey’s market share has remained stagnant, with the figures even declining for a period. Unfortunately, this was not a process that Turkey managed well.” 

Kaya stated that all countries can have problems with other countries from time to time, emphasizing that this is a common occurrence, but that countries should have different understandings and methods for neighbors, as they know them more intimately.

Mentioning how the 2017 Kurdistan Region independence referendum led Turkey to start a political process that disrupted trade relations with the KRI, Kaya said that Iran became a priority in that process and the focus shifted away from the KRI’s market. The chairman explained how the central government picked erroneous political fights with the Kurdistan Regional Government (KRG) in order to dominate across all domains, from customs to airports. As a result, trade with Turkey was blocked, products coming from Turkey were boycotted, and taxes were imposed.

“Looking back now, you can see that there was an opportunity that Turkey missed. If the process had been managed correctly, Turkey’s trade volume with Iraq today would easily exceed $50 billion,” said the Chairman.

Turkey-KRI trade was undermined because of excessive security policies and an external security strategy that was “similar to the survival strategy of the 1990s.” Explaining that the persistent failure to build a second customs gate was impairing Turkey’s trade with the KRI, Kaya noted that these developments could have helped prevent the economic crisis that Turkey is experiencing today.

“We need to learn lessons from what happened,” said Kaya. “In other words, even if there are crises in this region from time to time, we should not disrupt the methods that will ensure that both societies grown their abilities to meet their needs through symbiotic commercial relations.” 

“The more we increase trade and relations with our Kurdish brothers, the better the relations between Turkey and Iraq and Turkey and the KRI will be, and they will become countries that protect each other,” he continued. “When I met with KRG officials in 2015, they spoke highly of Turkey. However, Turkey’s extremely harsh reaction after the referendum changed that perception, and they began to feel that Turkey was not their friend. It is essential to calculate the potential outcomes of actions and learn from mistakes,” Kaya concluded.

Commercial partners

Pointing out the potential for mutual economic gain for both Turkey and the KRI, Kaya noted that KRG President Nechirvan Barzani, Turkey President Recep Tayyip Erdogan, and Turkey Minister of Foreign Affairs Hakan Fidan all agree that it is possible to establish good relations. “Turkey should abandon its nationalist logic. After all, every region has its own conditions, and it is necessary to approach the situation by respecting those conditions. The strict nationalist mentality in foreign policy should disappear and should never return. I think this is the most important lesson to be learned,” he said.

“If you cannot sell goods to your neighbors, you cannot sell anything to the world,” Kaya said, arguing that Turkey should work on to find ways to increase trade with Iraq, the KRI, and all its neighbors to the south. Kaya also explained that Turkey can make roughly 10% profit from sales to Europe but up to 90% from the KRI, and described the KRI as Turkey’s “commercial partner,” noting that a significant portion of the brands in the region come from Turkey. 

“Today, the development of economic relations is the most important method for guarding against the deterioration of political relations, which applies around the world. For example, the EU tries to safeguard each member’s trade regimes and work quickly to resolve political instability and become intermediaries. Relations between Turkey and the KRI should be the same,” he said, adding that countries should prioritize contributing to strengthening democracy and trade in other countries. The primary way to achieve this is to eliminate the “survival problem in one’s head.”

The second way is to increase the number of commercially accessible areas. Kaya believes that at least two more customs gates are needed between the KRI and Turkey and underlined that these should be connected to the KRI’s commercial channels and compatible with Turkey’s axis of trade, which include being close to a port. “We shouldn’t open a new customs gate just for the sake of opening one. The ones that are open today contribute to border trade, but they are not enough, and we should aim for larger volumes,” said Kaya, noting that Turkey’s current maximum trailer truck capacity is 4,000 per day but could reach 15,000.

“If your Kurdish brother is satisfied, he will be friends with you. If you support your Kurdish brother, he will support you. We need to learn and teach this well. Democracy, diplomatic relations, and trade should all be exemplary,” said Kaya. “We should also be aligning our laws more closely and carry out studies on how to minimize trade-related problems, from customs rules to taxation, so that they can be solved more expediently. The ombudsman method, for instance, can be introduced, which is a necessary aspect of trade.” 

Kaya underscored that the problems that business people experience in Turkey or the KRI should be handled by a system that is above the court, and asserted that it would be beneficial to create common commercial language, all of which could reduce conflict. Creating compatible financial transactions was another area that Kaya highlighted, arguing that a joint study should be carried out on this issue. While people should be prevented from carrying unregistered money, a system is also needed for them to easily repatriate their earnings, he maintained.

The chairman concluded by highlighting the role of investment in fostering commercial relations. “I would also like to add that Turkey is an attractive center for investors in Kurdistan. Many investors from Turkey are investing in the KRI, especially in the food and construction sectors. But there are also Iraqi and Kurdish investors in Turkey who were born and raised in Kurdistan. Turkey is an important gateway for them to expand their businesses to the world. Turkey has a population of 86 million and does most of its trade with Europe.”

“We need to develop collaborations that will enable Kurdish capital and Kurdish business people to come and do business here (in Turkey) easily,” Kaya concluded.

Sevda Kaplan is a Dicle University Physical Education graduate who has been a journalist since 1993. With a background in presenting and TV reporting, she notably held a six-year term as vice president of the Journalists Association. Alongside her ongoing journalism career, she has authored two novels in the Kurdish language. 

Copyright ©2023 All rights reserved