Understanding Turkey’s Current Foreign Policy
Turkey’s Foreign Policy in regards to the Iranian sanctions and the Khashoggi case
Washington unilaterally imposes sanctions on Iran.
“On November 5, we will place tough sanctions on Iran’s ruling regime. Our aim is to compel Iran to abandon its destructive activities. The sanctions will target the regime”. With a tweet, Mark Pompeo officially announced the imposition of US unilateral sanctions on Iran.
The sanctions were previously eased after the 2015 signing of the Joint Comprehensive Plan of Action (JCPOA), commonly known as the Iran nuclear deal (Mousavian, 2008). The decision was already announced on August, 6 2018 by US President Donald Trump, who added that US allied countries will not be able to trade with Iran (Le Blond and Dehghan, 2018). This caused many uncertainties amongst many US allies. The EU is the strongest and toughest ally of the US to oppose the sanctions (Tertrais, 2018), and Turkey – an important NATO ally – is probably the country most hurt by the sanctions.
Ankara answers to the Iranian Sanctions
Iran has one of the cheapest and largest supplies of oil in the world (Meredith, 2018). Indeed, it has the capacity to export 3 million barrels a day. However, due to the sanctions, it is now only exporting 1 million barrels per day (Observatory for Economic Complexity, 2018). Turkey buys almost half of its oil from Iran (44% in 2017, with a trading volume of about $10.7 billion) (Ibid.). Additionally, nearly 40% of Turkey’s electricity production is sourced with gas (Republic of Turkey Ministry of Energy and Natural Resources, 2018).
Turkey cannot even afford to buy oil from other current sellers, since the second largest exporter of oil to Turkey is Russia (Observatory for Economic Complexity, 2018), also under heavy sanctions by the US, and on which Turkey cannot depend more, since it is not in NATO, and Ankara has always been the US’ biggest ally in the Middle East. Also, Turkey is the third biggest buyer of Iranian non-oil products (Ibid.).
Resolution of similar problems in the past
In the past, when Turkey bought oil from Iran during US sanctions, the US unofficially gave its tacit consent, on the basis that Turkey would not go through the US banking system, since, when the US sanctions any country, it excludes it from its banking system. However, Iran does not and did not want to be paid in Turkish lira, since the trade imbalance between Turkey and Iran in favour of Iran would result in Iran having too much Turkish currency. Therefore, Turkey exported and exports gold to Iran through Qatar (Ibid.).
Relations between Ankara and Washington.
However, Turkish banks and companies cannot afford to disregard the US sanctions (Daragahi, 2018). The Turkish government is trying to offset the potential damage by, for example, extending loan maturities, or making it easier to repackage debt (Stratfor, 2018). Nevertheless, these efforts will not be enough to reassure most Turkish banks, since about half of their deposits are in US dollars. In any case, Turkey seems to be working in another direction as well. In August, the Energy and Natural Resources Minister, Fatih Dönmez, said that trade between Turkey and Iran will continue as part of a long-term bilateral contract, which is set to run until 2026 (A Haber interview, 2018).
Relations between Iran and Turkey
Indeed, after the sanctions on Iran, during a bilateral meeting between Erdogan and Rouhani, the Iranian leader underlined the necessity of using national currencies in bilateral business transactions. He also called for a revision of the Iran-Turkey preferential trade agreement, which is currently in favour of Iran (Observatory for Economic Complexity, 2018). Consequently, exports to Iran are currently rising very slowly, and are now around 0.5% of GDP.
This came at a cost. Erdogan condemned the US government’s “unacceptable and unstable” stances toward other countries, and echoed Rouhani’s call for boosting trade to defy the US sanctions (Press TV, 2018). Consequently, relations between the US and Turkey grew even further apart. However, according to Reuters, there is light at the end of the tunnel for Turkey. Indeed, it is possible that Trump’s tactic to sanction Iran will fail, and prove to be more harmful to the US itself than to Turkey and the EU. Indeed, French Finance Minister Bruno Le Maire said recently that the “outcome of that crisis with Iran will be the chance for Europe to have its own independent financial institutions, so we can trade with whoever we want” (Sheahan, Escrtitt, 2018).
The EU, Turkey and Iran to balance out the US
As a matter of fact, the US sanctions on Iran may be a way for the EU to get out of the SWIFT system, thus reducing the influence of the US on it. As a result, the euro would arguably become more important in the international economic arena, hence increasing the power of the European Union, since other countries could use the euro, instead of the US dollar, to trade with Iran. Additionally, the convergence of interests between Turkey and the EU opens up another possibility for Turkey to increase its relationship with EU, getting closer to a more likely future membership of the EU.
In the long run, the US withdrawal from the international scene could lead to a shift away from an American-led system, to a multi-polar international system, where the EU would have the chance to grow internationally, and get closer to Eastern countries such as Turkey, Iran and Iraq. However, despite these possible calculations, in the short term, Turkey seems to suffer from the US decision, since it makes trade with Iran harder, and puts Turkey in an unfavourable position in relation to its NATO allies.
All this coincides with the Khashoggi case, involving a critic of the Saudi regime who disappeared after entering the Saudi consulate in Istanbul. The Turkish Government accused Saudi Arabia of murdering Khashoggi, and claim to have proof of it. Despite the fact that the Turks rightly criticise the Saudis and say they are the aggrieved party, Ankara has taken this as a possibility to get closer to its NATO allies, and take a point in the match against Saudi Arabia, which is a big oil competitor to Iran (Hassantash, 2018). On top of this, Saudi Arabia is the only country in the region with Turkey to claim the leadership of the Sunnis (Al-Rashed, 2018), as Turkey is considered as a model in the region, as regards democratic, religious and social aspects (Ataman, 2018: 230-232).
The liberation of Brunson
On top of this came the liberation of Pastor Andrew Brunson – who had been working for over 20 years at a Christian church in Izmir – arrested over alleged links to terrorist groups, including the Gulenist movement (United States Department of State, Bureau of Democracy, Human Rights and Labor, 2017). Indeed, following the failed coup of 2016, Turkey has arrested various American citizens (Ibid.). The reaction by the US Government was hard on Turkey. Sanctions were imposed on aluminium and steel, as well as withholding delivery of 100 F-35 jets (DeYoung, Lynch and Paletta, 2018). Erdogan insisted on a “hostage exchange” between Gulen and Brunson.
However, in August the US doubled the sanctions on Turkey, which occurred during one of the biggest economic crises it has ever faced (Ibid.). It may seem natural, although somewhat naïve, to suggest that Brunson’s release was aimed at making the US drop sanctions on Turkey, so that the Turkish currency would have the chance to grow faster. However, Turkey faces bigger threats and issues in relation to the US.
New possible relations between Turkey and the US
Turkey and the US have some disagreements, most important of which is the support of PKK by the US in the war in Syria (Perry and Coskun, 2018). Indeed, for Turkey it is a life-or-death issue not to support PKK, and to treat it as a terrorist organisation. Therefore, by releasing Brunson, Turkey may also aim to push the US into stopping its support for the Kurdish-Turkish terrorist organisation. However, freeing a US citizen could not directly lead to the US changing its strategy in Syria.
The final deduction is that unilateral US sanctions on Iran, the Khashoggi case, increasingly strained relations between the US and Turkey; the economic crisis and the Turkish and Saudi rivalry in the region all add up towards pushing Ankara to reconsider its relationship with its allies and its neighbours, and to work to obtain a closer relationship with NATO allies – specifically the US. With regard to Saudi Arabia, there is a clear rivalry. Since its close relationship to the US, also following the huge sum of money which was passed from Saudi Arabia to Washington (Perper, 2018 and Hubbard, 2018), Turkey surely needs to find other means to be the main ally of the US in the Middle East. This is because Ankara needs more help in the war in Syria, and cannot afford to be pushed by Washington into halting its trade with Iran. On the same note, announcements against the US equally help Turkey to increase its relationship with the region, and especially with the EU, where Turkey’s membership has been under debate for decades.
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- Ataman, M. (2018). Insight Turkey 2018? ?- Spring 2018 (Vol. 20, No.2): The Gulf on The Verge.
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- Sam Meredith (2018). US sanctions on Iran are set to keep oil prices elevated, analysts say. [online] Available at: https://www.cnbc.com/2018/08/06/us-sanctions-on-iran-could-push-oil-prices-above-90-a-barrel-by-year-.html.
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- Z. (2018). How the killing of Jamal Khashoggi affects Turkish-Saudi relations. [online] Available at: https://www.economist.com/the-economist-explains/2018/11/01/how-the-killing-of-jamal-khashoggi-affects-turkish-saudi-relations.
Autore dell’articolo*: Sam Andrea Williams, studente in ‘International Relations’ alla University of Kent, nonché visiting student presso la Bogazici Universitesi, Istanbul.
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