The Turkiye–Israel trade boom: Talk is cheap, but money talks

The Crade, March 14, 2024 —

While denouncing Israel’s actions in Gaza as a ‘genocide’ and ‘inhumane,’ Erdogan is stealthily supplying Israel and its military forces with all the necessary goods to keep on ticking.

Muslim-majority countries have been especially vocal amid the global condemnation directed toward Israel for its genocidal war on Gaza. For obvious reasons, Muslim leaders face mounting pressure from their populations to adopt a firmer, more assertive position on the Palestinian cause. This pressure has only intensified as the war, now in its sixth month, coincides with the holy month of Ramadan.

Among these leaders is Turkish President Recep Tayyip Erdogan, who initially adopted a relatively neutral stance toward Tel Aviv’s war in order to position himself as a mediator in the prisoner exchange between Hamas and Israel. 

However, the enormous Palestinian civilian death toll – now approaching 32,000 in Gaza – and mounting international condemnation of Israel’s actions have complicated Ankara’s mediation ambitions. 

Erdogan’s rhetoric shifted significantly and quickly in response to the global outrage when, on 20 October, he publically declared that Israel’s military actions amounted to “genocide.”

Then, during a pro-Palestine rally a week later, the Turkish president called Israel a “war criminal,” leading to the recall of ambassadors from both countries for a thorough assessment of the situation. 

Turkiye’s trade with ‘war criminal’ Israel

Considering Erdogan’s critical stance, the recall of Ankara’s ambassador from Tel Aviv, and the ongoing massacres of thousands of women and children in Gaza, Turkiye, under the rule of the Justice and Development Party (AKP) – whose political roots are mired in Islamist ideology – might have been expected to reassess its trade ties with Israel. 

Overnight, Turkiye, the only Muslim-majority NATO member state, could have imposed economic sanctions to pressure Israel into a Gaza ceasefire. But that did not happen.

Instead, not only has trade between Turkiye and Israel skyrocketed, but the majority of commerce and shipping operations are being conducted by companies affiliated with a group supported by Erdogan, the Independent Industrialists and Businessmen’s Association (MUSIAD). 

While publicly, pro-government factions in Turkiye target and censure individuals for patronizing Starbucks and other international franchises that have demonstrated support for Israel, in private, they milk profits out of Israel’s war on Gaza. 

Ergodan’s public condemnations mean nothing in light of his secretive expansion of trade activities with the occupation state.

In 1996, Turkiye and Israel signed a Free Trade Agreement (FTA) that mutually exempted both countries from customs duties on industrial product imports, in a deal that significantly developed Israeli–Turkish economic relations. 

Despite the various political crises that have cropped up between Turkiye and Israel – as in the Mavi Marmara incident, when Israeli commandos stormed a Turkish-flagged Gaza aid ship and killed aid workers – their economic ties have continued to grow quietly in the background, particularly since 2002, when Erdogan and the AKP came to power. 

That bilateral trade volume has seen a remarkable increase over the years: data from the Turkish Exporters Assembly (TIM), Turkish exports to Israel expanded five-fold from $1.4 billion in the early 2000s to $5.1 billion in 2023. Moreover, Turkiye is among the top four states for Israeli imports.

Fueling the Israeli war machine 

Turkiye provides 65 percent of Israel’s steel imports, with Turkish multi-sector conglomerate ICDAS – affiliated with MUSIAD – notable as a key exporter to the occupation state. Since the onset of the Gaza war on 7 October alone, ICDAS has shipped 50,000 tons of steel to Israel. 

A portion of this steel supports Israel’s military industry in the production of munitions that are currently being used to decimate the densely-populated Gaza enclave and attack neighboring Lebanon and Syria. Notably, ICDAS has facilitated steel exports to the port of Haifa with 64 shipments in 2023 and nine more after 7 October.

ICDAS’ contributions extend beyond trade; the company has also been recognized for its role in constructing a mosque in Canakkale, an effort that earned a commendation from Mehmet Gormez, the President of Religious Affairs. At a ceremony marking Israel’s 69th anniversary, ICDAS was, telling, honored as the top Turkish exporter to Israel.

In addition, Israel sources 95 percent of its cement from Turkiye, with notable clients that include the Israeli Ministry of Defence. According to the Turkish Statistical Institute (TUIK), cement exports to Israel totaled $174 million in 2023, with $6.39 million of that figure recorded from 7 October to the present. 

Leading Turkish cement exporters to Israel include Akcansa, Limak, Oyak, Nuh Cement, and Eren Holding. The latter, a member of the MUSIAD, has most notably supplied Israel with over 200,000 tons of materials since 7 October.

Facing Turkish public outrage over its exports to Israel, MUSIAD made a statement on 10 February to address its member companies’ trade with Israel: 

In recent days, our organization and members have been put under suspicion due to the alleged commercial activities of a few of our members with Israel. For this reason, we are meticulously examining the allegations that put our institution and members under suspicion in line with our charter and are operating our internal processes. Information will be provided when the processes are complete.

Despite that promise, MUSIAD did not respond to the Evrensel newspaper’s requests for information on its processes, and evidence of ICDAS’ unabated steel exports to Israel has emerged. According to TIM’s data, ICDAS exported steel worth $35 million in January 2024 and $38.5 million in February.

Bypassing the naval blockade 

An important indicator of the sustained economic engagement between Turkiye and Israel – despite Tel Aviv’s continued war crimes in Gaza – is the active maritime traffic linking the ports of both countries. This comes at a time when the Red Sea naval blockade of ships destined for Israeli ports by Yemen’s Ansarallah-aligned armed forces is heavily supported by Arab and Muslim populations worldwide.

Turkish Transport Minister Abdulkadir Uraloglu, in a conversation with journalist Kemal Ozturk, revealed that between 7 October and 31 December 2023, 701 ships embarked from Turkish ports to those in Israel, averaging eight voyages daily.

This tally encompasses 480 vessels departing directly from Turkish ports for Israel and 221 additional ships originating from third-country ports, which docked in Turkiye while en route to Israel.

Although AKP leaders and MUSIAD member companies have upped their negative rhetoric against Israel, Turkiye–Israel economic relations are thriving like never before. Turkiye continues to meet Israel’s critical needs for steel, cement, vegetables, fruits, automobiles, and electrical appliances, while Zorlu Holding meets 7 percent of Israel’s electricity needs thanks to its energy investments in the occupation state.

Publicly visible political tensions between Ankara and Tel Aviv appear to have had no impact on the commercial front. Erdogan’s calculations are not hard to discern: Turkiye is currently grappling with an economic crisis and is heavily invested in enhancing ties with pro-Israel Washington and EU to enable its recovery. 

After all, the full normalization of Turkiye’s relations with Israel in 2022 facilitated similar progress with Greece and Egypt.

Continuing the ‘shame trade’

In this context, Ankara is trying to stay clear of rekindling a political crisis with Israel, and so Erdogan directs most of his public criticism specifically at Israeli Prime Minister Benjamin Netanyahu, whom he perceives as nearing the end of his political career. 

For Ankara, political and economic objectives take precedence over humanitarian concerns, allowing trade between Israel and Turkiye to persist despite the popular, widespread anger over the genocide taking place in Gaza and calls for severing bilateral relations altogether.

At a pro-Erdogan rally in western Sakarya province on 24 February, a banner demanding “End the shame trade with Israel” was promptly confiscated by police officers. Despite the gathering’s support for the president and his party, this rhetoric was clearly a step too far for Turkish political and business elites. 

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