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TURKEY BRIEF: Turkish - U.S. Relations 2011 TABLE OF CONTENTS FOREWARDS DEİK President’s Message .....................................................................................................................................................................................................4 DEİK Executive Committee Chairman’s Message ....................................................................................................................................6 DEİK / Turkish-American Business Council (TAİK) Chairman’s Message ..................................................................8 I. COUNTRY PROFILE: INTRODUCING TURKEY .................................................................................................................11 1.1 HISTORY, GEOGRAPHY, POPULATION, ECONOMIC DEVELOPMENTS ..........................11 1.2 FUTURE PROSPECTS ...........................................................................................................................................................................15 1.3 THE EU ACCESSION PROCESS...............................................................................................................................................17 II. MAJOR EXPORTS OF TURKEY .............................................................................................................................................................20 2.1 AUTOMOTIVE ...............................................................................................................................................................................................20 2.2 IRON AND STEEL .....................................................................................................................................................................................38 2.3 TEXTILE AND APPAREL ...................................................................................................................................................................45 2.4 JEWELRY ..............................................................................................................................................................................................................53 2.5 MARBLE, CERAMICS, SANITARY PRODUCTS AND GLASSWARE .............................................58 2 Turkey Brief: Turkish - U.S. Relations III. INVESTMENT OPPORTUNITIES IN TURKEY .......................................................................................................................63 3.1 FINANCIAL SERVICES .......................................................................................................................................................................63 3.2 PRIVATIZATION ..........................................................................................................................................................................................97 3.3 FOREIGN INVESTMENT.............................................................................................................................................................. 117 3.4 TOURISM ......................................................................................................................................................................................................... 121 3.5 CONSTRUCTION AND REAL ESTATE ....................................................................................................................... 135 3.6 ENERGY ............................................................................................................................................................................................................. 152 3.7 HEALTHCARE ............................................................................................................................................................................................ 186 3.8 CHEMICAL PRODUCTS ................................................................................................................................................................ 194 3.9 INFORMATION AND COMMUNICATION TECHNOLOGIES (ICT) .................................... 200 3.10 CONSUMER ELECTRONICS ................................................................................................................................................... 208 3.11 FOOD AND AGRICULTURE ..................................................................................................................................................... 210 3.12 EDUCATION ................................................................................................................................................................................................ 217 3.13 ENTERTAINMENT AND MEDIA ........................................................................................................................................ 220 3.14 DEFENSE .......................................................................................................................................................................................................... 222 3.15 SHIPPING AND SHIPBUILDING ........................................................................................................................................ 229 IV. TURKEY-U.S. ECONOMIC RELATIONS .................................................................................................................................. 232 4.1 LEGAL FRAMEWORK ...................................................................................................................................................................... 232 4.2 ORGANIZATIONS IN TURKEY ............................................................................................................................................ 233 4.3 MAJOR BUSINESS ACTIVITIES IN 2010 AND 2011 .................................................................................. 234 4.4 TRADE RELATED ISSUES ............................................................................................................................................................ 236 V. DEİK AND TAİK ...................................................................................................................................................................................................... 246 Turkey Brief: Turkish - U.S. Relations 3 Dear Readers, Turkey has been rapidly integrating into the global economy and has become an appealing country for investment, on the way to become the full member of the European Union. Turkey achieved this leap with its dynamic and active private sector leading in the Balkans, Middle East, South Africa and Central Asia. Therefore, Turkey is perceived as a leader and taken as an economic model in these regions. The Turkish economy is being transformed in the 1980s from a state-led to a market-oriented economy Before 1980, total export was only $3 billion. 90% of its export consisted of agrarian products and the Turkish economy was the 26th in the world. Today, Turkey has transformed into a country, which has an export volume of $130 billion where 92% of these exports consist of industrial goods. Turkey, as the biggest economy of Eastern Europe and Middle East, has become 17th biggest economy in the world while 6th biggest economy in Europe. Recent studies also predict that Turkey will continue to be the “BRIC of Europe” with its democratic credentials, economic model and strong private sector in the upcoming years, and rank by the year 2050 the 5th largest economy in Europe after the UK. The foreign trade volume of Turkey is around a $300 trillion. Turkey by itself performs the 65% of the total export of industrial goods of the Middle East and Africa region. Turkey is the 6th biggest trading partner of the European Union. The competitive markets such as OECD, EU and the U.S. account for 65 % of Turkey’s total export. Today, Turkey is the second after the U. S. in producing 7 different automobile trademarks. In the last 38 years, up until the end of 2010, Turkish contractors have undertaken almost 5.894 projects in 86 countries, with a total value of some $187,3 billion. In 2010, 33 Turkish contracting companies are on the list of “Top 225 International Contractors” announced by the leading international industry magazine “ENR - Engineering News Record”. Turkey ranked second in the world after China. There are 24 Turkish companies within the list of 100 biggest companies in Islamic world. Previously considered as a flank country, Turkey now stands as a central country in the zone on which the world intensively focuses. Turkey also ranks second in the world in road transportation sector following the U.S. On the other side, thanks to her geographical location, while Turkey has become the main energy corridor for Euro-Mediterranean region, liberal and reformist investment climate with highly competitive investment conditions lead Turkey to become a major destination for overseas investment. Turkey has become the country of opportunities. 4 Turkey Brief: Turkish - U.S. Relations Turkey and the US relations based on a successful strategic partnership, has three main pillars, military, political and economic. Traditionally, the first two pillars have always been strong whereas the third pillar has not still reached to a satisfactory level. With its $14 trillion Gross Domestic Production, the USA is a huge economic potential for Turkish exporters. Share of Turkey is just 0.3 % in the US total imports.