Turkey's industrial and supply chain policy: Goals and prospects for German-Turkish economic cooperation and bilateral relations

Turkey's geopolitically motivated industrial and supply chain policy implies close ties to Germany as well as a security and economic policy orientation towards the EU. Ankara wants to bring production and sales into line with EU standards and establish a green high-tech and services economy. However, its decarbonisation measures remain inadequate. Turkish stakeholders see disruptions to global supply chains as creating the opportunity to relocate European production chains to Turkey (near-shoring). The government, the private sector and business organisations are all working to expand sustainable energy supplies. Turkey's authoritarian domestic policy - namely, the dismantling of democracy, repression and disregard for the rule of law - makes it extremely difficult to deepen bilateral cooperation. Despite close economic ties, there are normative differences between Germany and Turkey and consistent strategy to overcome them is lacking. Rather, the Turkish government is focused on using industrial policy to compensate for shortcomings in the rule of law. Amid the geopolitical tensions between the United States and China, Turkey is performing a delicate balancing act: it is maintaining its ties to the West while at the same time expanding its technology partnership with China and energy cooperation with Russia German policy towards Turkey requires a strategic rethink. It should endeavour to promote economic stability, strengthen Turkey's security policy integration into Europe and counteract Ankara's strategic rapprochement with Moscow and Beijing. Going forward, cooperation should be made conditional on democracy, the rule of law and human rights.