US’ threatening statements on Turkey’s S-400 purchase disturb business for both countries



As all eyes are now turned toward a face-to-face meeting between President Recep Tayyip Erdoğan and U.S. President Donald Trump, who are expected to hold extended talks on the Russian-made air missile defense systems, an issue that has been occupying the agenda in recent months, on the sidelines of the G20 Summit in Japan’s Osaka, which is to kick off today.

Tensions between the two NATO allies have been rising over Ankara’s purchase of the Russian S-400s, which Turkey is about to receive in the first half of next month. Washington threatened Turkey that it could face sanctions and would be excluded from the F-35 program, a multinational NATO defense project in which Turkey is a major manufacturer and buyer.

Turkey has on every occasion argued it won’t back down on the deal and that it was already a done deal and that buying the Russian defense system is a matter of sovereign decision-making. Threatening statements from the U.S. have disturbed businesspeople from both countries, according to Turkey-U.S. Business Council (TAİK) Chairman Mehmet Ali Yalçındağ.

In an interview with the Turkish Sabah daily, Yalçındağ elaborated on how the process would affect trade between the two countries, stressing that the threatening discourse of the U.S. was unacceptable. “As TAİK, we are against the use of economic sanctions as an imposition of political consequences. Everyone knows such kinds of sanctions do not work and that they have not yielded results in the past either,” Yalçındağ said, adding the free market economy did not favor threats and sanctions. “American businesspeople in trade relations with Turkey are not satisfied with the crisis as they express at every opportunity. As TAIK, we make every effort to keep the issue warm in the eyes of both the American business community and the influence groups,” he said.

Yalçındağ recalled that the issues had occurred between the two countries before, pointing to the importance of diplomacy. “There is currently very tight diplomatic traffic,” he noted, highlighting that the Erdoğan-Trump meeting would also address this issue.

Yalçındağ said while there could be conflicts among the allies, dialogue and compromise were always essential between the parties.

He explained that Turkey could respond in the event of sanctions. “In the short term, we will take some steps to overcome the contraction in the economy, attract investment and expand the foreign trade volume,” he continued. “In the long run, on the other hand, relations with the United States will also need to be improved at the level of congresses and lobbies.”


CAN HARM NATO AIR DEFENSE’Yalçındağ also responded to the threatening statements by the U.S. regarding the procurement of the F-35 fighter jets. “Turkey has been one of the nine partners of the F-35 fighter jet project for 20 years. The F-35 procurement of the Turkish Air Force is a strategic issue planned for the future of not only Turkey but also the NATO air defense system,” he said. “The U.S. may exclude Turkey, perhaps taking the risk of extending the cost and duration of the program to make other countries manufacture the parts produced in Turkey. However, the problem is not limited to manufacturing. If the U.S. excludes Turkey, it is then willing to harm NATO’s air defense against Russia. Therefore, we believe that NATO has come first as the basis for the solution of this issue.” Yalçındağ recalled that Turkey proposed to apply to NATO’s arbitration to solve this situation and authorize a joint NATO commission to examine the problem. “We find it difficult to understand why the Pentagon opposes the establishment of a commission within NATO,” he further stressed. “Refusing NATO’s arbitration and just asking us not to purchases the S-400s is not a friendly and sincere attitude. There is also the principle of pacta sunt servanda [agreements must be kept], which is also damaged with this action. Developments taking place between Turkey and the United States in the context of the F-35 incident and the arbitrary abolition of such agreements by the U.S. will pose a question mark in the eyes of other countries seeking to engage in such long-term commercial engagements with the U.S.”



Stressing that despite the tension between the two countries, the investment appetite of American businesspeople continued, Yalçındağ said General Electric (GE) built a global engineering center in Gebze and an innovation center in Kurtköy, while PepsiCo founded Europe’s largest potato warehouse in Manisa, raising its total employment to 43,000 people. “CocaCola opened its 10th factory in Turkey at the end of 2017. Procter and Gamble and Dow Chemical are growing in capital. Citibank manages 60 countries in the Middle East and North Africa [MENA] region with no branches from Turkey,” he noted. “Medtronic has made new investments to conduct Middle East and Central Asia operations from Turkey, while Mondelez moved its gum production line in France to Turkey with an investment of $42 million. In other words, large and small investments continue. TAIK and our U.S. partner American Turkish Council [ATC] are instrumental in all of this. Daily outgoing and incoming monetary movements in the stock market should not be confused with the investment appetite.”



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