Connecting worlds: Turkiye’s rapidly expanding trade with Southeast Asia and Oceania

Turkiye’s trade with Southeast Asia and Oceania has picked up incredible pace during the current globalised and connected market environment. As a strategic nation-state, industrial powerhouse and economic powerhouse, Turkiye is using its strategic location and policy advantage to expand relations with these areas. Turkiye’s trade volume with Southeast Asia increased to about $10 billion in 2023, up 15 per cent from the previous year, while trade with Oceania (with a majority of Australia and New Zealand) was $2.5 billion, up ten per cent per annum. Such numbers underline Turkiye’s growing presence as a global trade partner and point to further cooperation.

Turkiye’s relations with Southeast Asia have become a vital element of its economic diplomacy. The $10 billion in trade in 2023 is a testament to the increased commercial partnership and the convergence of Turkiye’s export strengths with Southeast Asia’s need for quality products. Most Turkish exports to the region come from the machine industry, textiles and automotive parts, industries in which Turkiye has developed a market share worldwide.

Machinery exports contributed significantly to this trade due to Turkiye’s robust manufacturing capacity and expertise in industrial equipment. According to the Special Association of Southeast Asian Nations (ASEAN) 2023 Investment Report, machinery exports to Southeast Asia totalled $3.5 billion in 2023, supporting the industrial revolution in Indonesia, Vietnam and Thailand. In the same vein, car parts valued at $2 billion were in high demand because of the growing automobile industry in these countries. Turkiye’s expertise in precision engineering and low-cost manufacturing has made it a preferred partner in this field.

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Textiles are another stronghold of Turkiye’s exports to Southeast Asia. Textile exports topped $2.8 billion in 2023, fuelled by Southeast Asia’s rising middle class and the growing demand for inexpensive but stylish clothing. Turkiye’s reputation for its high-quality fabrics and innovative designs is attractive in markets like Malaysia and the Philippines, where they are looking for alternatives to their traditional suppliers.

With these wins, there’s still a lot of room to expand. With ASEAN economies growing by 4.5 per cent annually on average, Turkiye could build on its influence in technology-based sectors, renewable energy products and digital services. Free trade agreements with ASEAN would also remove tariff barriers, further boosting trade.

Oceania: A stable and effective partner

Though smaller in scale, Turkiye’s relations with Oceania – mostly Australia and New Zealand – have continued to develop steadily. Turkiye’s exports of agriculture products and building materials account for a ten per cent growth in its $2.5 billion trade volume in 2023. Turkiye exports farm products to Oceania thanks to its land richness and high-end agro-processing sector. These exports reached $1.5 billion in 2023, with dried fruits, nuts and olive oil among the most popular products in Australia and New Zealand. Turkish produce’s quality and organic certification align with Oceania’s consumer expectations for healthy, sustainable food. According to the Ministry of Trade of Turkiye, building materials worth $800 million in construction materials is another important aspect of Turkiye’s Oceania trade. Turkiye’s world-famous marble, ceramics and steel products found homes in Oceania’s rapidly growing construction sector. As the largest infrastructure developments in Australia and New Zealand take place, Turkiye is well-positioned to supply quality materials at affordable prices.

The Oceania trade relationship provides untapped opportunities in renewable energy technology, defence technology and tourism. Education cooperations and cultural exchange programmes could also strengthen bilateral relations, boosting trust and mutual respect.

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While trade volume growth is positive, challenges must be resolved to continue and accelerate this growth. Non-tariff obstacles, inefficiencies in logistics and geopolitical risk are all real dangers. Turkiye’s geographic separation from Southeast Asia and Oceania, for example, drives up the cost of transport, thereby affecting the competitiveness of exports. Turkiye must use multiple approaches to overcome these difficulties:

1. Promoting diplomatic engagement: Strengthening political connections through high-level visits, trade missions and cultural tours can set the foundation for more economic contacts.
2.  Infrastructure investments: Creating optimised logistics chains, such as shipping channels and air cargo, can help cut transport costs and delivery times.
3. Export diversification: The entry into emerging industries like digital technologies, medical devices and renewable energy can further enrich Turkiye’s trade portfolio.
4. FTAs and economic partnerships: Reaching trade agreements with ASEAN and Oceania nations will enable exports by cutting tariffs and regulatory costs.

Turkiye’s trade with Southeast Asia and Oceania is now at an emerging stage, growing strongly and providing mutual benefits. By resolving logistical issues, expanding the export base and strengthening diplomatic ties, Turkiye could unlock further growth in the coming years. In an era when Turkiye is striving to become a global economic powerhouse, its relationships with Southeast Asia and Oceania will be crucial to the country’s future. Due to their dynamic expansion and mutual complementary characteristics, these markets serve as trading partners and key allies in Turkiye’s pursuit of economic and geopolitical dominance.

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The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Monitor.