Palestine at the Center of Israel-Turkey Trade

On the north side of Istanbul’s Golden Horn, the Mavi Marmara sits in quiet isolation. In May 2010, the Turkish vessel was carrying aid for the besieged Gaza Strip when Israel forcibly intercepted it in international waters. Nine activists were killed in the raid, and a tenth succumbed to his injuries last month.

The maritime crisis set off several years of polarized relations between Israel and Turkey that both countries believe are now on the mend. These improving ties may produce humanitarian and economic benefits for the West Bank and Gaza Strip.

A Rapprochement

At the urging of U.S. President Barack Obama, Israel’s Prime Minister Benjamin Netanyahu called his Turkish counterpart, Recep Tayipp Erdogan, in March to apologize for the attack and to promise compensation in the amount of $20 million to the families of the Turkish victims.[1]

"Sending humanitarian aid to Palestinians in Gaza through Turkey is the next phase in contacts," explained Erdogan last month. "Once this stage is complete, we can move on to the normalization process.” [2]

“There’s every reason to believe that relations between Israel and Turkey will be normalized,” echoed Israeli Foreign Minister Avigdor Lieberman. [3]

Nevertheless, lingering suspicions in both capitals continue. Netanyahu is wary of being burned by Ankara after announcing his regret for the deaths of Turkish citizens, the payment of compensation, and a resumption of diplomatic ties. Erdogan is said by those with close ties to his office to be sensitive to Netanyahu’s concerns, but he remains skeptical of Israel’s intentions in Gaza and the West Bank. 

Commercial Routes Blocked by War

Despite such caution, an agreement is expected to boost economic cooperation between the two countries. The Turkish government hopes for progress in two broad areas: an improvement and expansion of the successful trade route from Iskenderun to Haifa to Sheikh Hussein Bridge to Jordan (and Saudi Arabia); and broadening commercial ties between Turkey and the Palestinian Authority, both in the West Bank in terms of trade expansion and exports, and in the Gaza Strip via trade through Israel and a maritime route.

Turkey’s trade links with Jordan and the Gulf have been completely transformed by the war in Syria. The most efficient route from Turkey to these markets has always been overland through Syria.

The war in Syria, however, has made safe and reliable vehicular passage through the country impossible. Insurance companies have refused to insure cargo, causing difficulties in the transfer of loads from Turkey to other countries. As a result, alternative routes through Egypt and Israel have been developed in the last two years.

Alternative Trade Routes

The Egyptian route—which ran from Turkey to Port Said and overland through Sinai before a short voyage across the Red Sea to the Saudi port of Duba—was politically attractive during the short tenure of President Mohamed Morsi. Due to a strong political affinity between Erdogan’s Justice and Development Party and Egypt’s Muslim Brotherhood, Cairo offered generous subsidies to make the route competitive. But Morsi’s ouster in July 2013 and the subsequent souring of relations between Ankara and Cairo, together with growing security problems in Sinai and in Egypt generally, reduced the attraction of the Egyptian option.[4]

This has left Turkey with only one option: a maritime trade bridge to Israel. That this option has been consolidated during the worst era of broken relations between Israel and Turkey attests to the power of mutual interest driving the program.

The route works as follows: Turkish ships dock at Haifa once a week, laden with containers on Turkish trucks filled with Turkish and other goods, such as shoes and chickpeas, destined for Jordan and the Gulf markets. Security protocols are addressed at the port of embarkation. The trucks are licensed in Turkey and are manned by Turkish drivers. Up to 60 trucks proceed in a convoy extending half a kilometer in length directly from Haifa to the Sheikh Hussein Bridge to Jordan, a two-hour drive.[5]

This crossing is also the principal conduit for Israel’s growing trade with Jordan and beyond.  Once in Jordan, the merchandise is offloaded to Jordanian trucks that continue to the Gulf. (The trucks must be offloaded because Saudi Arabia does not admit trucks that have passed through Israel, a condition that has created work for Jordanian truck drivers.) Some of the trucks return to Turkey carrying goods and agricultural produce from Jordan for the Turkish market and beyond, including carpets, lemons, and sewing machines. Others return empty.

Extending Turkish Trade with the West Bank and Gaza

While both Turkey and Israel are interested in extending trade to Jordanian and Gulf markets, Turkey is also interested in expanding its trade route to include exports from the West Bank. Turkish trucks that now return to Turkey empty from Jordan could pick up Palestinian exports, principally agricultural produce at Jalame near Jenin or the Bazaq Crossing checkpoint at the north end of the Jordan Valley. Turkish proponents of this idea hope that the understanding between Turkey and Israel will create the political will on Israel’s side to facilitate this trade.  

As for Gaza, the dialogue between Israel and Turkey already includes an Israeli agreement in principle to allow humanitarian goods originating in Turkey into Gaza through Kerem Shalom, the border crossing on the Israel, Gaza, and Egypt border. (Erdogan had originally demanded a complete end to the Israeli-imposed blockade on Gaza but seems to have backed away from that position in the face of Israeli intransigence.)  Turkey is already taking advantage of this opportunity by resuming construction on a hospital in Gaza.

Gaza is in desperate need of a trading border open to the outside world that functions according to internationally acceptable standards and practices—a border that will enable Gazans to go back to work. Despite Israel’s withdrawal from Gaza in 2005, it still retains control of access routes to the Strip, and its long-standing policy of constraining the economy of the Strip hardened dramatically after the election of Hamas in 2006 and Hamas’ assumption of authority in Gaza in June 2007. And Egypt, led by newly minted President Abdul-Fattah el-Sisi, is, if anything, more adamant than Israel in its refusal to countenance the creation of a functioning trade border between Egypt and Gaza, viewing an open trade route as Israel’s responsibility.

Palestinians in Gaza have long been interested in establishing a port from which they can trade freely with the outside world. Israel has effectively prevented such an arrangement by sealing Gaza’s borders, a decision that the international community has not effectively countered. Turkey, in addition to its desire to trade with the West Bank, has an interest in making a material contribution to Gaza's economy beyond humanitarian aid and in making good on Erdogan’s often stated public commitment to Gaza’s well being.

Under such a system goods destined for Gaza would depart from a Turkish port. Security would be provided under a protocol with Israel, similar to the arrangement with the Turkish truck convoys now transiting from Turkey via Israel to Jordan. A simple roll on/roll off facility in the Gaza port would receive goods for import/export. The newly unified Palestinian Authority would participate in security, administrative, and operational issues.

This month’s meeting of donors belonging to the Ad Hoc Liaison Committee, the aid coordination arm of the international community since 1993, may raise issues related to Gaza’s economic rehabilitation, now made more palatable by the return of the Palestinian Authority to Gaza as part of the intra-Palestinian reconciliation. International support for Gaza’s economic revival will encourage all local parties to address the issue far more seriously than has been the case in recent years.

Putting Gaza back to work offers ready advantages to all parties. Israel is determined to reduce its operational (and political) role in Gaza trade; the proposed route would bring about a lessening of international criticism of its blockade of Gaza. Egypt has an interest in reducing pressure that would increase its responsibility for Gaza, as well as an interest in reducing the functionality of the tunnel economy between Gaza and Sinai. Turkey wants to promote tangible expressions of its support for Palestinians, especially those in Gaza. And for the long-suffering people of Gaza, a resumption of trade offers a long-desired opportunity to end policies that have reduced them to penury.