Tunisia slashes trade deficit by taxing Turkish goods

Tunisia’s government has slashed its foreign trade deficit by taxing Turkish goods, the Arab Weekly reported.

The country started buying Turkish products, from sunflower seeds to wedding dresses, in 2011, when an Islamic party with close ties to the government of Turkish President Recep Tayyip Erdogan, won power in a coalition and took control of the trade ministry. The trade deficit with Turkey has since ballooned – the country has now become the biggest exporter to Tunisia after China and Italy.

Ennahda, the Turkish-backed Islamist coalition partner in Tunisia’s government, walked out of parliament when the measure was passed in December and has accused the government of discrimination against Turkey. Tunisian Islamists often tout Erdogan’s economic policies as a model for Tunisia, the Arab Weekly said.

Tunisia’s trade deficit with Turkey grew from approximately $208 million in 2010 to more than $707 million in 2017, Tunisian government figures indicated.

Consumers see Turkish products as better quality than Chinese equivalents, but the imports have ravaged local industry, causing factories to shut down and farmers to shrink their crop sizes, Arab Weekly said.

“Farmers in Beja, Mateur and Bizerte incurred huge losses because of the imports of Turkish sunflower seeds. Sunflower farmed areas shrank from 24,000 hectares in 2011 to 4,000 hectares in 2016 with the number of working days falling from 180,000 to 6,000,” said Naceur Amdouni, a farmer who heads the local branch of the country’s farmers’ union. “Why do they undermine a culture that benefits the soil and the farmers by importing such seeds?”

The textile industry has also been hit hard, with 300 firms shut down and 40,000 people losing their jobs in the past seven years, trade union officials said.

Tunisia’s parliament voted in December to raise taxes on Turkish imports by up to 27%. The legislation went into effect on Jan. 1.

On Feb. 6, the government said the trade deficit was down 83 percent in January compared to the same period last year, Arab Weekly reported.