President Recep Tayyip Erdoğan touted Turkey’s investment advantages to businesspeople in the United Arab Emirates (UAE) on Tuesday after a flurry of agreements between the two countries seeking to build economic bridges after a yearslong rift.
Visiting the Gulf country for the first time since 2013, Erdoğan received a grand reception on Monday with the UAE's de facto ruler Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed Al Nahyan (MBZ) meeting him on arrival and the world’s tallest tower, the Burj Khalifa, projecting Turkey’s flag.
Having moved to put years of tense relations behind them, Turkey and the UAE have opened the doors to a new phase in bilateral relations marked by deeper economic cooperation after a yearslong rift.
Erdoğan’s two-day return visit followed a trip by the crown prince to Ankara in late November that marked a significant move toward overcoming disputes.
Mutual goal: Stronger relations
"Our mutual goal is to carry our bilateral relations to much higher levels in all areas," Erdoğan told a meeting with investors in Abu Dhabi, particularly stressing the strong common will to boost investment relations.
"Turkey provides very important advantages for investors looking for alternatives to Asia-centered production areas."
Erdoğan and the crown prince oversaw the signing of 13 agreements on Monday, including on trade, industry, defense, health and medical sciences, land and sea transportation and climate action.
The visit in November had yielded investment accords worth billions of dollars and was MBZ’s first official trip to Turkey since 2012 and the highest-level visit by an Emirati official since relations between the two countries hit a low.
Erdoğan said on Tuesday that that trip "started a new era" with the UAE, adding there was a "strong collective will to develop trade relations and increase investments."
Talks on trade, investment deal
The UAE and Turkey on Monday signed a joint statement on starting negotiations for a bilateral trade and investment deal, known as a Comprehensive Economic Partnership Agreement (CEPA), the Emirati states news agency WAM said.
Emirati Minister of State for Foreign Trade Thani Al Zeyoudi told Reuters the UAE expected trade with Turkey to increase substantially once the CEPA came into effect, which he said he hoped the two sides could finalize within six months to a year.
Erdoğan called on business leaders in the UAE to invest in Turkey.
"As the leading representatives of the private sector in the United Arab Emirates, I am sure you fully comprehend the benefits of establishing commercial and investment partnerships with Turkey," he said.
"It is you, the esteemed members of our business world, who will realize the two countries’ potential, especially in trade and investments."
The UAE in November said it earmarked a $10 billion fund to support mainly strategic investments in Turkey. The fund will focus on strategic investments, including in the energy and health sectors.
Last month the two countries agreed on a nearly $5 billion swap deal in local currencies.
The president dubbed the UAE as Turkey’s prominent trade partner in the Gulf region, and said trade volume and buoyancy in private sector partnerships were maintained even during a period of tense relations.
"I believe that as countries that complement each other economically, we will cover a significant distance in a short time," Erdoğan said.
"The UAE offers financial support and favorable investment opportunities to high-tech companies and startups. Turkey, with its dynamic and young population, is leading new global initiatives that develop advanced technology."
Top regional trading partners
Turkey and the UAE remain crucial regional trading partners. The Gulf country has said it hopes to double or triple the trade volume with Turkey, which it sees as a route to new markets.
About 400 Emirati companies operate in Turkey, the UAE’s 11th largest trading partner, WAM said.
Their bilateral trade volume had reached nearly $15 billion in 2017, the highest level ever, before declining as relations strained.
The turnover dropped to as much as $6.9 billion a year later, before rebounding to nearly $7.9 billion in 2019, according to the Turkish Statistical Institute (TurkStat) data. The volume rose further to $8.3 billion in 2020 despite the coronavirus pandemic, before dropping slightly to $7.6 billion last year.
Turkey and UAE changed roles when it comes to registering a surplus in their exchange. Turkey’s exports to the country had hit an all-time high of nearly $9.2 billion in 2017, compared to imports worth $5.5 billion.
However, Turkey registered a trade deficit in the following years, before it reversed the trend again last year.
Its exports had totaled $3.14 billion, $3.52 billion and $2.72 billion in 2018, 2019 and 2020, respectively, versus imports of $3.78 billion, $4.34 billion and $5.57 billion, according to the data.
Turkey exported around $5.2 billion worth of goods to the UAE last year and bought nearly $2.4 billion worth of products from the country.
Dubai trip
Erdoğan on Tuesday also met with the UAE's prime minister and ruler of Dubai, Sheikh Mohammed bin Rashid Al Maktoum, at the Expo 2020 Dubai, where the two discussed ways to develop bilateral relations.
Turkey is attending the expo, the first world fair held in the Middle East, with a pavilion that has been set up with the theme "Creating the Future from the Zero Point of Civilizations."
Held under the banner "Connecting Minds and Creating the Future," the Expo 2020 Dubai was delayed for a year due to the COVID-19 pandemic. It opened its doors to exhibitors from almost 200 countries on Oct. 1 last year and will conclude at the end of March.
Equipped with the latest technologies, the Turkey pavilion offers visitors a chance to embark on a journey that sheds light on the beauty, export products, technology, nature, unique history and cultural richness of the country.