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Putin’s Visit to Turkey: Who Will Pay for the “Breakthrough in Bilateral Relations”?

President Vladimir Putin’s recent state visit to Turkey outlined the long-awaited breakthrough in the bilateral relations of the two countries. The meeting brought new life to a relationship that had been characterized by the “limits of growth” problem and that required a qualitative broadening of the established model of cooperation.

Published on December 8, 2014

President Vladimir Putin’s recent state visit to Turkey for the High-Level Russian-Turkish Cooperation Council (HLCC) meeting outlined the long-awaited breakthrough in the bilateral relations of the two countries. The meeting brought new life to a relationship that had been characterized by the “limits of growth” problem and that required a qualitative broadening of the established model of cooperation.

The events of early December can also be framed in terms of a new stage in Turkey’s struggle for influence in the greater Middle East. The current phase of the transformation in the region—associated with fallout from the “Arab spring” and emergence of the Islamic State—is perceived by Ankara as an opening with huge potential for Turkey’s image and its strategic position in the Middle East. In this difficult climate, Turkey sees an opportunity to compensate for previous setbacks in its foreign policy and play the role of a leading regional power.

The gas agreements announced following the HLCC meeting can be viewed as another Kremlin jab against the West but also as a reflection of Ankara’s regional geopolitical ambitions. It is worth mentioning that until recently Turkey and Azerbaijan stood in opposition to Russia’s South Stream mega-project and offered their own means of energy supply growth and diversification within the framework of the Southern Gas Corridor.  To realize this goal, Ankara invested significant resources in negotiations on the Transcaspian and Transanatolain pipelines with Turkmenistan. However, Washington’s decline in enthusiasm about the initiative,  together with the expansion of armed conflicts on Turkey’s borders (in Iraq and Syria), created new complications for both projects. Combined, these factors pushed Ankara to search for alternatives in realizing its energy-related ambitions.

The successful realization of the new project announced by President Putin and President Recep Erdoğan would help Turkey—a country which is not well endowed with natural resources— become a key player in the global energy market. Moreover, starting in 2015 Turkey will receive a six percent discount on Russian natural gas. Thus, President Erdoğan’s moves toward closer cooperation with Russia are quite logical and consistent with his goal of political and economic stability in Turkey. He now has a viable reason to correct for Turkey’s previous foreign policy strategy of bypassing Russian territory in the transit of oil and natural gas from Central Asia to the West.

Economic calculations constitute the core dimension of this new Russian-Turkish project. However, there is also a significant political dimension to these agreements. Ankara recognizes that Moscow has found itself in a growing conflict with the West by making certain choices regarding the conflict in Ukraine—a country within Russia’s traditional sphere of influence. Turkey also has a growing conflict on its doorstep; the expansion of the Islamic State has thrown Ankara into a situation of heightened geopolitical risk and has forced it to make difficult choices. President Erdoğan clearly does not approve of the West’s strategy for solving the problem of the Islamic State. This disagreement explains why Russia and Turkey are searching for other alternatives to the traditional balance of power in the region.

The Russian and Turkish political elites share a common view of the modern international system. Both countries find themselves in opposition to the unipolar world, consider the struggle against political extremism and radicalism to be a priority for international cooperation, and exhibit similar views on economic globalization as a process with both bright and dark sides. Over the last two decades, Russia and Turkey have managed to overcome a legacy of block confrontation and have opted for a depoliticized model of economic cooperation.

This paradigm of “realistic politics,” dominated by broad mutual interests, has allowed the two countries to bypass some acute problems in their bilateral relations—even as the number of such issues has risen. Yet, in their pursuit of further trade and economic cooperation, Moscow and Ankara cannot continue to “agree to disagree” by distancing themselves from the issues that remain outside of the “positive agenda.” The last year has seen a number of new questions on which Russia and Turkey’s positions are almost diametrically opposed: the civil war in Syria, the conflict in Ukraine, the annexation of Crimea, the question of Cyprus, and relations with Georgia and Armenia.

Disagreement over Syria remains a sticking point in the bilateral relations between Russia and Turkey. In the context of the Islamic State’s expansion, this problem has gained a new dimension. The United States does not currently accept Turkey’s initiatives of creating a buffer security zone on the Turkish-Syrian borders or agreeing on a no-fly zone over Syria.  With these moves, the West makes it clear that it does not support Turkey’s ambitions of becoming the principal power in the Middle East.

The new stage in Russian-Turkish relations and the realization of the recently signed agreements—especially those affiliated with the construction of a new pipeline—will strengthen Turkey’s geopolitical and economic position. This raises the question of how far Russia is willing to go in enabling Turkey’s rising profile in the Middle East.

Another question in the context of new Russian-Turkish initiatives and deals is how they could affect the relations between Ankara and Brussels. Recent visits of EU official representatives to Turkey following the meeting between Putin and Erdoğan only prove the importance of this standpoint. The growing discontent against the credibility of the EU’s conditionality policy together with the current stagnation in the accession negotiations created an impression that the EU’s ties and influence over Turkey and its economy has diminished.

However, despite  the current stagnation of Turkey’s accession process and the resentment against the EU that has become a common feature of Erdoğan’s rhetoric, the EU retains its influence over Turkey based on two major factors. The first is the dependence of Turkey’s economy over the EU, which is much greater than the dependence of the EU’s economy on the Turkish market. Turkey has become an increasingly important trade partner for EU countries, but unequal economic interdependence between Turkey and the EU strengthens the EU’s leverage over Turkey. While the EU is Turkey’s the most important import and export partner, Turkey ranks only as seventh in the EU’s import and fifth in export markets. The EU’s share in Turkey’s total trade is over nine times larger than Turkey’s share in the EU’s total trade. Furthermore, the residents of the EU make up most of the foreign direct investment to Turkey: in 2013, more than 70 percent of Turkey’s foreign direct investment came from the EU.

The second factor is the rising concern in Turkey over the Transatlantic Trade and Investment Partnership (TTIP)—talks between the EU and the United States about a common, free trade zone and its potential impact on Turkey’s economy. Turkey’s customs union with the EU has already made Turkey a part of the final EU-U.S. deal, but Turkey is still not a part of the talks. Given the fact that any free trade agreement with the EU makes the Turkish market open for any goods going through the EU without paying duties, but at the same time doesn’t give the same opportunity to Turkish goods, the concerns of President Erdoğan over TTIP is obvious. And the current situation is giving Ankara a new trump card in its negotiations with both the EU and the United States.

Pavel Shlykov is a senior research fellow at the Institute of Asian and African Studies, Moscow State University.

Carnegie does not take institutional positions on public policy issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of Carnegie, its staff, or its trustees.