Pop quiz: what emerging market Islamic nation that has been an American military ally for more than half a century is not a major trading partner with the U.S.?
The answer is… Turkey. Though hopefully that answer will soon change.
The U.S. currently has Free Trade Agreements (FTA) with 17 countries. Close military allies (Israel), Muslim countries (Jordan), and emerging economies (Chile) are all represented. So, yesterday’s submission to Congress calling for an FTA with Turkey is certainly overdue. Opening up trade with a NATO member who possesses the 17th largest economy in the world, and is being compared to rising economic powers such as Brazil, is a no-brainer for the United States, especially considering the economic benefits of free trade.
First, an FTA would lower Turkish tariffs on American goods, especially American food and agricultural products (which are currently under 18% tariffs). These decreased production costs would allow US companies to expand their business, creating jobs and stimulating the economy in the process.
As a corollary, freer trade would lower US tariffs on Turkish imports into the US. Some products such as Turkish clothing currently cost between 15-20% more because of import duties. These tariffs are laid on American consumers, so taking them away would allow Americans to pay less on everything from tennis shoes to pillows to televisions. Furthermore, many of these Turkish importers actually have stores in the US and employ Americans. Not only would an FTA allow Americans to pay less for Turkish goods, it would also allow these stores to expand their business and employ more Americans as well.
Finally, even the negotiations of such an agreement can benefit the economy, as investors and businesses realize that economic growth lies ahead in the near future. A brighter economic future translates to more bullish investment.
There is little doubt an FTA would provide a variety of benefits. And particularly given all the talk in Congress about the need to further stimulate the economy, why not try the number one recommended method of job creation and quickly move forward on free trade discussions with Turkey.