Chilean FTA gives hope to Turkish-Brazilian Business Council chairman

According to him, the similar makeup of the two countries' economies makes them natural partners for trade and improved relations. But an abundance of high-level meetings over the past several years have given many, including Eken, hope that economic relations between the two will soon surge. This week's signing of a free trade agreement (FTA) with Chile is evidence, he feels, of a growing Turkish business interest in South America.

Trade volume between Brazil and Turkey stood at about $222 million for much of the early part of the decade. It was not until 2006, when then-Foreign Minister Abdullah Gül visited the country, that relations began to pick up. Relations received a further boost in 2007, when a high-level delegation traveled to Turkey and signed a number of agreements relating to trade and investment. The visit of Brazilian President Luiz Inácio Lula da Silva a couple of months ago, which marked the first official visit of a Brazilian head of state to Turkey since Brazilian Emperor Pedro II visited the Ottoman Empire in 1876, served only to further these relations. During the visit, Lula was quoted as saying, “It is absurd that countries as important as Turkey and Brazil do not have a stronger relationship.” “Turkey and Brazil have great potential, but I believe we're not even living up to 10 percent of that potential,” Lula went on to tell business leaders in İstanbul.

During Lula and his delegation's May visit, Brazilian Development, Industry and Trade Minister Miguel Jorge said that he hoped to make Brazil one of Turkey's leading trade partners. This aspiration still has a long way to go, though. Trade between the two countries now stands at about $1.5 billion, with trade, for the most part, to the advantage of Brazil. Of this figure, Eken was quick to point out, only about $500 million was Turkish exports to Brazil. Reuters quoted Jorge as saying, “We should have three to four times that amount as soon as possible.” According to Jorge, Turkey was Brazil's 44th largest export market and 56th largest importer. And 82 percent of the products that Brazil imported from Turkey were industrial and for commercial purposes.

But there is increasing hope that relations between the two countries will increase dramatically in the years to come. Petrobras, Brazil's national oil and gas company, and the Turkish Petroleum Corporation (TPAO) have recently signed an agreement to explore for gas in the Black Sea, and Petrobras has committed to investing some $400 million in the coming years. With TPAO's contribution, the amount is expected to reach around $800 million.

Eken was also hopeful that many other opportunities for cooperation between the two countries will exist. “Our business lines are quite parallel,” he said. “We both produce autos, have strong construction sectors, are leaders in textiles and produce yachts. In many ways we're on the same level.” He saw many opportunities. “We are good at tourism, and we have learned over the years,” he said, suggesting that Turks could partner up and build hotels in Brazil. Turkey attracts around four times more tourists annually than Brazil.

He said that increased trade levels with Brazil would have the added bonus of bringing Turkey closer to signing a free trade agreement with Mercosur, a regional trade bloc comprising Brazil, Argentina, Paraguay and Uruguay.

Jorge said as much when in Turkey, with Reuters quoting him as saying: "Turkey has a special place for Brazil, because our relations hinge on the trade bloc Mercosur. Basically, the point of this partnership would be a four-plus-one formula which would erase import duties for the countries involved." 

A high-level delegation of Turkish officials including Trade Minister Zafer Cağlayan is in Chile today to sign an FTA with the country -- the first of its kind in South America. Eken saw the signing of such agreements as evidence of the growing potential for Turkish entrepreneurs in the fields of textiles, white goods, yachts, energy and tourism.

He also felt that proper Turkish strategies in Brazil could lead to Brazil forming a regional hub for other South American countries as well as the Caribbean. Eken claimed to have proposed that Turkey emulate the Brazilian “ApexBrasil” program, whereby the government builds massive warehouse facilities in strategic countries which are then rented to Brazilian companies at bargain-basement prices to serve as various trade hubs.