Economic ties between our countries have flourished thanks to the Free Trade Agreement
Turkish companies are engaged in several industries in Serbia, comprising textile, automotive, machinery, wholesale and retail trade, contracting services, banking, tourism, healthcare, and energy. We spoke with Ms. Yasemin Yüce, Commercial Counsellor of the Embassy of Türkiye to Serbia, about the secret of success in the Serbian market.
There are plenty of Turkish companies doing business in Serbia. What is so special about our market for Turkish companies?
With its strategic location in the center of Southeast Europe, skilled labor force, competitive running costs, free trade agreements promoting access to multiple markets, and investment incentives, the interest of our companies in Serbia is growing and quickly transforming into tangible benefits. While the number of Turkish companies in Serbia was around 100 in 2015, today, nearly 900 Turkish companies are actively doing business in Serbia and employing more than 8,000 workers. Furthermore, our investment stock in Serbia has experienced significant growth, rising from a mere USD 1 million in 2011 to USD 307 million in 2022, based on the data from the Central Bank of the Republic of Türkiye.
In what industries and fields are most Turkish companies working here?
Turkish companies are engaged in several industries in Serbia, comprising textile, automotive, machinery, wholesale and retail trade, contracting services, banking, tourism, healthcare, and energy. Notably, two significant motorway projects in Serbia, the Morava Corridor and the Belgrade-Sarajevo highway, are being built with the participation of Turkish contractors. Moreover, numerous investors in the automotive and textile industries have manufacturing plants in Serbia that produce goods for corporations worldwide. In the service sector, our country’s most important banking, healthcare, energy, and transportation companies continue to operate in Serbia. Additionally, several Turkish companies involved in the automotive, construction, healthcare, ICT, energy, transportation, and food processing industries persist in their endeavors to establish new or additional investments or commence new projects in Serbia.
Nearly 900 Turkish companies are actively doing business in Serbia and employing more than 8,000 workers
What do you think about your overall experience working in the Serbian market? Is it easy for a Turkish company to do business here?
Economic ties between our countries have flourished thanks to the Free Trade Agreement, which entered into force in 2010 and expanded in 2019, the Agreement on the Reciprocal Promotion and Protection of Investments, Joint Economic Commission meetings, and numerous other agreements and mechanisms. Furthermore, Turkish enterprises’ proficiency in providing prompt and secure delivery of high-quality and reasonably priced products in Serbia furnishes our businesses with a competitive edge in this market. Additionally, despite the lack of a common border, the long-standing and significant history shared between Türkiye and Serbia strengthens the proximity between our countries and facilitates a conducive foundation for our commercial affiliations. This situation provides a significant boost to our bilateral trade and economic ties. All these factors have led Serbia to become Türkiye’s one of the most important trading partners. In 2022, Türkiye became the 7th most vital trade partner for Serbia.
Our Embassy has witnessed a rise in requests from Turkish and Serbian firms keen on investing, establishing businesses, or participating in trade. This highlights the eagerness of Turkish firms to investigate potential in Serbia and the request of Serbian businesses for Turkish goods and services.
What kind of trends have you noticed in the foreign trade volume?
Under the Free Trade Agreement between Türkiye and Serbia, both Parties eliminated customs duties on imports of all industrial products. Regarding agricultural products, Türkiye and Serbia exchanged mutual concessions for certain products in the form of tariff quotas subject to MFN duty reduction or exemption.
In this context, our foreign trade volume reached USD 1.31 billion in 2018 and has continued to display an upward trend with the Free Trade Agreement. Based on data from the Turk[1]ish Statistical Institute, our bilateral trade surpassed the target set by the two Presidents at the Second High-Level Cooperation Council in 2019, reaching a record of USD 2.35 billion in 2022. Serbia’s exports to Türkiye amount to USD 573.6 million, whilst Türkiye exported USD 1.77 billion to Serbia in 2022.
The long-term trade volume target is set at USD 5 billion, and we will strive to collaborate with the public and private institu[1]tions in both countries to attain this objective.
Both of our countries are doing well in green energy and digitalisation. Are there any plans for joint action?
Over the last ten years, Türkiye has diversified its energy mix significantly, with particularly impressive growth in renewable energy thanks to supportive government policies. Besides, in 2022, Türkiye’s ICT sector has become an integral part of its economy, with a market size of USD 24.7 billion and USD 2.9 billion in exports to Europe, the Middle East and North Africa, Asia, and North America.
Conversely, Serbia has prioritized green energy and digitalization concerns, resulting in significant and tangible advancements. It is evident that these matters will further boost Serbia’s economy in the future.
Therefore, renewable energy and ICT are important in our future bilateral relations. Our objective is to actively collaborate in Serbia’s digital and green transformation by exchanging our companies’ experiences and know-how.
Serbia to become Türkiye one of the most important trading partners
What kind of economic cooperation between Türkiye and Serbia do you expect to see this and next year?
I firmly believe that strengthening economic and cultural ties between Türkiye and Serbia through various dialogue mechanisms will augment development and prosperity. Additionally, due to the COVID-19 pandemic and the conflict in Ukraine causing a worldwide disruption of supply chains, our economic partnership has been further intensified, especially by adopting near shoring and friend-shoring strategies. We believe that our present commercial relationship has the potential to elevate to higher levels by investing in new sectors and collaborating on mutual project.