Ankara tightens import measures amid pandemic

Turkish Finance Minister Berat Albayrak said that except for what the country cannot produce domestically, imports will not be as easy as before. (Reuters)
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Updated 25 May 2020

Ankara tightens import measures amid pandemic

  • Tariff increases signal return to closed economy, experts say

ANKARA: Turkey’s plans to restrict imports and increase tariffs on some products signal a return to a closed economy for the country, experts claim.

Finance Minister Berat Albayrak said that the government will introduce stricter measures for the import of goods apart from strategic items or those Turkey is unable to produce by itself.

“Imports will be very difficult from now on. Except for what we cannot produce domestically, imports will not be as easy as before,” Albayrak said last week, according to the state-owned Anadolu news agency.

Some experts said that the sudden move toward a closed economy could discourage foreign direct investment amid growing unpredictability in the country in the wake of the coronavirus pandemic.

Turkey increased customs taxes by 30 percent during the outbreak, and said it will add customs taxes to about 800 products, particularly those used by the automotive industry.

On Sunday, Ankara levied up to 14 percent additional duties on some types of steel imports.

A 300 percent jump in import taxes on Iranian watermelons since May 15 has been criticized by a deputy from the pro-Kurdish People’s Democratic Party (HDP), who said that traders are abandoning goods rather than carrying them across the border.

“This points to a new direction in Turkey’s trade policy,” Sinan Ulgen, a former diplomat and chairman of Istanbul’s Center for Economics and Foreign Policy Studies think tank, told Arab News.

Turkey has been in a customs union with the EU since 1996 and is the sixth main trade partner for the bloc with trade worth €138 billion ($150 billion).

The EU represents about 40 percent of Turkey’s global trade, with thousands of European companies operating in the country providing about three quarters of its much-needed foreign direct investment.

Ulgen said the latest announcement by Albayrak is a departure from the common external tariff of the EU — a core condition for the functioning of the customs union.

“What this measure could do is essentially create a trade diversion whereby these products now start to enter Turkey from the EU as opposed to be directly imported. As a result, Turkey would lose all tariff revenues because the EU would get the tariff revenues on these products,” he said.

Ulgen also warned that the government’s decision is likely to affect foreign companies in Turkey and threaten foreign direct investment.

“One key criterion to attract such investment is to have a predictable policy framework,” he said.

Aydin Sezer, an expert on trade policy, said that Ankara’s overnight move is designed to encourage local production at the expense of domestic traders.

“However, this decision will affect domestic producers that import raw materials and intermediate goods. It will make it expensive to import from third countries and will prevent the outflow of foreign currency,” he told Arab News.

Countries that are hurt by sudden protectionist measures could retaliate, he said.

Turkey’s trade has been hit by the pandemic, with imports in April dropping by 28  percent to almost $12.9 billion, and the foreign trade deficit standing at $3.4 billion.

Conflict-hit Libya to restart oil operations but with low output

Updated 10 July 2020

Conflict-hit Libya to restart oil operations but with low output

  • There is significant damage to the reservoirs and infrastructure
  • A first cargo of 650,000 barrels will be shipped by the Kriti Bastion Aframax tanker

TUNIS: Libya’s National Oil Corporation (NOC) lifted force majeure on all oil exports on Friday as a first tanker loaded at Es Sider after a half-year blockade by eastern forces, but said technical problems caused by the shutdown would keep output low.
“The increase in production will take a long time due to the significant damage to reservoirs and infrastructure caused by the illegal blockade imposed on January 17,” NOC said in a statement.
A first cargo of 650,000 barrels will be shipped by the Kriti Bastion Aframax tanker, chartered by Vitol, which two sources at Es Sider port said had docked and started loading on Friday morning.
The blockade, which was imposed by forces in eastern Libya loyal to Khalifa Haftar’s Libyan National Army (LNA), has cost the country $6.5 billion in lost export revenue, NOC said.
“Our infrastructure has suffered lasting damage, and our focus now must be on maintenance and securing a budget for the work to be done,” NOC chairman Mustafa Sanalla said in the statement.
Control over Libya’s oil infrastructure, the richest prize for competing forces in the country, and access to revenues, has become an ever-more significant factor in the civil war.
The internationally recognized Government of National Accord, supported by Turkey, has recently pushed back the LNA, backed by the United Arab Emirates, Russia and Egypt, from the environs of Tripoli and pushed toward Sirte, near the main oil terminals.