The Tie That Still Binds Israel and Turkey: Trade

Turkey has downgraded its diplomatic ties with Israel over a Gaza spat

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Only hours after The New York Times leaked a U.N. report on Israel's deadly raid of a Gaza-bound flotilla, Turkey has announced that it will be downgrading its diplomatic ties with Jerusalem, expelling Israel's ambassador and deputy ambassador to Turkey, and cancelling all defense contracts between the two countries. At issue is Israel's refusal to apologize for the deaths of nine Turkish nationals in the 2010 raid (on Thursday, the U.N. criticized Israeli forces for using  "excessive and unreasonable" force during the incident but maintained that Israel's naval blockade of Gaza is legal, a position Turkey refutes).

Yet even as relations between the longtime regional allies sour, there's one aspect of their partnership that's still humming along: commerce. The Wall Street Journal notes that trade between the two countries rose by a quarter last year to more than $3 billion (representing just under 3 percent of Israel's foreign trade that year). In the first half of 2011, the Israeli newspaper Globes adds, Israeli-Turkish trade rose 26 percent to $2 billion. According to Ynet, Turkey is Israel's sixth-largest and fastest-growing export destination, with chemicals and oil distillates representing the primary exports (the photo above shows former Israeli Industry and Trade Minister Benjamin Ben-Eliezer meeting with Turkish Defense Minister Vecdi Gonul in 2009). "The relationship between Turkey and Israel has deteriorated somewhat on [the] surface, but deep underneath there really is no change in the relationship," a Turkish professor told the country's Today's Zaman last week. "Economically, we have seen some decrease in tourism, but the red lines have not been crossed and the US will not let two of its most important allies in the Middle East cross that [those] line[s]." Uriel Lynn, president of the Federation of Israeli Chambers of Commerce, told Ynet that Turkey's business sector doesn't "feel committed to the government in the crisis" because the government hasn't demanded "such a commitment."

If the spat over Gaza does eventually poison bilateral trade, it could take a serious toll on both countries' economies. On Friday, Foreign Minister Ahmet Davutoglu hinted at a "Plan B" that could involve sanctions if Israel remains unwilling to apologize for the flotilla incident (Today's Zaman says a Plan B could also involve a campaign against Israel at the U.N., legal action against senior Israeli figures in European courts, and a freeze on military cooperation between the two countries). Israel's Haaretz adds that Ankara is threatening to suspend trade between Turkey and Israel as well. Today's announcement by Turkey, however, made no mention of commerce.

This article is from the archive of our partner The Wire.