Turkey to take Saudi boycott to the World Trade Organisation

Turkey will raise its concerns regarding an unofficial Saudi Arabia boycott against the Turkish goods this week at the World Trade Organisation (WTO), Middle East Eye can reveal.

Two Turkish officials told MEE that Turkey will officially present its complaint regarding the Saudi practice to the organisation.

An official agenda released by the WTO has also indicated that Turkey plans to discuss the matter at the Goods Council meeting taking place on 31 March-1 April. The agenda says Turkey has requested to talk about Saudi Arabia’s “trade restrictive policies and practices”.

The Goods Council would not automatically evoke any formal dispute between the two countries that could force Riyadh to pay compensation, it is instead a diplomatic way to deliberate on trade problems.

Under WTO rules, Turkey may file a dispute against Saudi Arabia to seek compensation for recorded losses if it can prove unwarranted Saudi tactics against its businesses.

Last year, Riyadh ramped up its efforts to target Turkey’s economy after a Turkish court’s decision to accept two separate indictments against Saudi officials said to be involved in the murder of Saudi journalist Jamal Khashoggi in Istanbul in October 2018.

Since October, the Saudi government has been systematically pressuring local businesses not to trade with Turkish companies and to remove Turkish goods from their shelves.

Turkish official bilateral initiatives and contacts with the Saudi leadership since last November have not born any results as Riyadh continues to deny the existence of any boycott.

“Whenever we bring up the issue, they convey some excuses and deny that there is any boycott against Turkish exporters whatsoever,” a senior Turkish official told MEE.

“Our repeated attempts to remedy the situations didn’t go anywhere. That’s why we decided to take it to the WTO.”

Slowdown in Turkish exports

Turkish exports to Saudi Arabia dropped by a remarkable 92 percent in February, from $290m to just $21m year on year, according to data released by the Turkish Exporters Assembly (TIM). In January, Turkish exports also suffered a 92 percent drop year on year.

The statistics indicate a steady slowdown in Turkish exports since October. As a result, Turkey’s annual exports to Saudi Arabia decreased by 24 percent in 2020, from $3.1bn to $2.3bn.

Relations between the two regional powerhouses have been at a low point since the murder of the Saudi journalist, whose killing is believed by the CIA to have been ordered by Saudi Crown Prince Mohammed bin Salman himself.

Turkish Education Ministry officials revealed earlier this month that Saudi Arabia closed eight Turkish schools in the cities of Mecca and Medina last year.

However, there are indications that Riyadh is seeking ways to overcome the rift through defence purchases.

Turkish President Recep Tayyip Erdogan said earlier in March that Saudi Arabia had requested to buy Turkish armed drones that could be used in Yemen.

Last year, the Saudi government signed a deal with a local company to supply armed drones after getting a technology transfer from a Turkish defence firm, Vestel Karayel. Six drones were expected to be delivered this year.

Yemen’s Houthis declared earlier this year that they shot down a Karayel, which was previously not known to be in service with the Saudi military.