Turkey bypasses Syria to reach Middle East via Egyptian ports
Egypt’s Minister of Transport Galal Moustafa Saeed and Turkey’s Economy Minister Zafer Çağlayan signed a memorandum of understanding on Monday for the establishment of a transit transportation route connected by a Ro-Ro line. (Photo: AA)
The first Ro-Ro ship to take Turkish goods to Gulf countries via Egypt is to leave the Port of Mersin on April 26. The much-awaited Ro-Ro line, taking the place of the Syrian route that has become too costly for Turkish exporters because the Syrian side significantly increased fees to transship goods, will allow Turkish exporters to reach not only Jordan and Gulf countries on the Arabian peninsula, but also African countries with relative ease.
One major defect of the Ro-Ro option instead of the Syrian route was the cost; the Egyptian route using Ro-Ro costs exporters around $1,000 more than the Syrian route. But Economy Minister Zafer Çağlayan's words in the press conference on Monday were reassuring: “Our exporters will not suffer any inconvenience. Their costs will not be greater than when they take the Syrian route.” A businessman, who spoke on condition of anonymity, told Today's Zaman that the exporters would be offered $1,000 per truck as a subsidy by the state. As per the memoran-dum of understanding prescribing cooperation in Ro-Ro and transport by land, signed by Çağlayan and Galal Moustafa Saeed, Egypt's minister of transport, a Ro-Ro line between the ports of Mersin and Alexandria will enable Turkish trucks to travel to third countries by way of Egypt.
Çağlayan believes the Egyptian route, thanks to which Turkish trucks will reach Saudi Arabia in three-and-a-half days, will be one of the major export routes for Turkey in the future, allowing Turkey to access African market easily.
With that in mind, Turkey is planning to establish a logistics center in Alexandria in a short time, Çağlayan announced. Dr. Alaa Ezz, secretary-general of the Federation of Egyptian Chambers of Commerce, and one of the members of the Egyptian delegation, believes the agreement signed between the two countries is “just a framework in which many initiatives are being created.” “It’s just the tip of the iceberg,” he told Today’s Zaman. Ezz, who is very enthusiastic about the agreement, indicated that the Egyptian businesswise community sees it as the first step in major cooperation. Thanks to the logistics center, Turkish exporters will easily cater to Gulf countries as well as Africa. In addition, the government is considering setting up a second logistics center near the Libyan border. Making use of Egypt as a logistics hub, Turkish firms could significantly boost their exports, Ezz claimed; he sees Turkey as a strategic partner.
Noting payment is a major problem in trade with Africa, given that most African banks are not “first-class” banks that big international banks don’t ratify and that payment is in cash in most cases, he said: “But when you have a logistics center in Egypt, no letter of credit will be needed for trade. The African businessmen will just come to the center, pay and get what they want.” Ezz also invites Turkish companies to set up production plants to produce the labor-intensive parts for goods in Egypt, while sending the technological components from Turkey. Noting that Egypt would open the door for Turkish goods to 1.8 billion consumers through the free trade areas it enjoys in organizations such as the Common Market for Eastern and Southern Africa, Mercosur (Southern Common Market: an integration project bringing together South American countries) as well as privileged trade with the United States, “In this way Turkish companies could penetrate huge markets. We don’t have any quotas, any customs in these areas,” he said.
Saeed said his country was passing through a great revolution and the normalization process was continuing, and he expressed pleasure to cooperate with an important country like Turkey in the region. In addition, he noted that cooperation would further increase trade volume and that projects such as Ro-Ro transportation would boost the influence of both countries in the Middle East. Turkish trucks taking the Ro-Ro line to Alexandria will travel by land to another port on the Egyptian Red Sea coast, Safaga for example, to once again take a Ro-Ro to a port in Saudi Arabia or Jordan. The Ro-Ro line between Turkey and Egypt has been on the agenda since relations with Syria deteriorated because of the ongoing clashes in that country. The agreement, which is considered to be a win-win situation for both countries, will also allow Egypt to reach Asian and countries in the Eastern Europe easily by way of Turkey.
The trade volume between Turkey and Egypt is expected to reach $5 billion in 2012, up from $4.2 billion last year. Total Turkish investments in Egypt are nearly $2 billion, 10 percent of all Turkish foreign investments in the world, while the number of Egyptian firms having investment in Turkey is 115.