Five Years After Mavi Marmara, Israeli Exports Feel the Impact

Export Institute says all exports except for chemicals declined in 2014.

Moti Milrod

Five years after Israel’s raid on the Turkish vessel Mavi Marmara – the event that most analysts say led to the souring of bilateral relations – Israeli exports to the country have finally taken a turn for the worse.

An analysis of Israeli exports undertaken by the quasi-governmental Export Institute found that with the exception of chemicals, all other Israeli exports to Turkey fell last year. The number of companies exporting to Turkey also fell to 515, although the number has been shrinking since at least 2010 when it reached 575.

The analysis, conducted by the institute’s chief economist Shauli Katznelson, found that Israeli exports to Turkey more than doubled in 2010-2014 to about $2.75 billion. But last year exports not counting chemicals dropped a sharp 8% to just $500 million.

Chemicals are Israel’s biggest export to Turkey by far, accounting for about 80% of the total, but Katznelson said that much of that was refined-oil products that were re-exported to third countries and therefore less affected by the ups and downs of political ties.

Israel and Turkey enjoyed more than a decade of close economic and military ties, which gradually deteriorated under the rule of Turkey’s Islamist Prime Minister Recep Tayyip Erdogan. Relations took a big setback after the Israeli army’s raid on the Mavi Marmara, which was among a flotilla of vessels seeking to break the Gaza blockade, and the death of nine Turkish nationals on board.

As recently as last July, Israel’s Economy Ministry said exports to Turkey were running ahead of 2013’s record level, with the figure climbing nearly 25% to $949.2 million in the first four months of the year.

Among the biggest sectors to show a decline last year was metals, which plunged 32% last year to $105 million, and machinery and equipment, which dropped 15% to about $40 million.

Among the 575 companies that reported exports to Turkey in excess of $20,000 annually, the institute found that 72% saw exports to the country drop in the following years. About a third of the companies that were exporting to Turkey that year had dropped out by 2014, it said.