From 'Zero Problems' to Zero Trade

According to the Turkish Contractors Union, since 1973, Turkish contractors in Libya have completed more than 565 projects with a total value of $29 billion. In 2011, the Turkish government had first rejected foreign intervention against leader Moammar Gadhafi because of Turkish business contracts and money owed to them. Erdogan — who had initially asked “What does NATO have to do in Libya?" — eventually agreed to establish the main headquarters for NATO's intervention in Izmir and carried out sustained negotiations with the transition government for the money owed to Turkish contractors.

Some of the 200 Turkish companies operating in Libya have engaged international arbitration but still have not collected the money owed to them.

Ro-Ro blow from Egypt

The crisis faced by Turkish businesses is not limited to Libya. Turkey’s export sector, which has been coming up with alternative routes after losing its Syrian routes, is now gearing up to pay the cost of the crisis with Egypt because of Turkey’s non-recognition of President Abdel Fattah al-Sisi. Egypt has said it will not renew the agreement covering Ro-Ro ferryboat trips when it expires on April 20.

Following the loss of transit routes through Syria, Turkish exporters shifted their routes to Saudi Arabia and other Gulf countries by organizing Ro-Ro ferries between Iskendurun and Port Said. This route was regulated by agreements signed between Turkey-Egypt and Egypt-Saudi Arabia in 2012. If a new agreement cannot be reached with Egypt, Turkish exporters will suffer heavily.

Serafettin Asut, chairman of the Mersin Chamber of Commerce and Industry, said, “We have two alternatives. Either we will persuade Egypt or send ships carrying our goods through the Suez Canal. This, of course, means higher costs.” Problems with Libya and Egypt will increase the pressure on the Turkish economy, which is already sending warning signals.

But Erdogan’s uncompromising attitude is limiting the maneuvering room of the Turkish government, even if it's willing to be flexible.

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