Turkey looks to more than double trade with Latin America, Iran

SANTIAGO (Reuters) - Turkey aims to boost trade with Latin America more than two-fold by 2023, in a bid to diversify away from its traditional export markets in the troubled economies of Europe and the Middle East, Economy Minister Mustafa Elitas said on Monday.

Turkish President Tayyip Erdogan makes a speech during his meeting with mukhtars at the Presidential Palace in Ankara, Turkey, November 26, 2015. REUTERS/Umit Bektas

The minister spoke to Reuters in the Chilean capital while accompanying President Tayyip Erdogan and a large business delegation on a tour of the region that will also include visits to Peru and Ecuador.

“Bilateral trade with Latin America currently stands at a little over $8 billion ... for 2023 which is our Republic’s 100-year anniversary, we want to reach $20 billion,” Elitas said in an interview late on Monday.

Citing the advantages of having a free trade agreement with Chile that aims to yield $1 billion in bilateral trade this year, Elitas said Turkey will ask Peru and Ecuador to “speed up” the finalization of bilateral free trade agreements.

Elitas saw Turkey benefiting from the emergence of neighboring Iran from years of economic isolation as world powers lift crippling sanctions in return for the Islamic Republic’s compliance with a deal to curb its nuclear ambitions.

“Turkey will be one of the countries that benefits the most,” Elitas said, adding that Turkey-Iran trade reached $22 billion in 2012 before the steep slide in oil prices pushed that figure down to $14 billion last year.

“Our objective is to reach $30 billion (in trade) with Iran by 2023,” Elitas said.

Asked if Turkey would now have to compete with Iran in order to attract foreign investment from Europe and elsewhere, Elitas said Tehran was not a rival because of its lack of democracy.

“Turkey is the most democratic country in the region and foreign investments will go to democratic nations, to countries that can guarantee those investments,” said Elitas. “If Iran advances with its economy then they could become a rival.”

Turkey’s Deputy Prime Minister Mehmet Simsek, in charge of the economy, has said battling inflation will be this year’s main challenge.

But a sharp rise in the minimum wage, hikes in electricity prices and taxes, and President Erdogan’s preference for low interest rates to boost growth were all obstacles.

Elitas also said Turkey should avoid excessive increases in interest rates.

“It’s important not to hike interest rates too much ... this does not create an environment that is conducive to investments ... currently interest rates in Turkey are not low, in fact they are high,” said Elitas.

Editing by Simon Cameron-Moore