beyondbrics

Turkey is talking of boycotts in its increasingly bitter dispute with France.

At the centre of attention: Sodexo, the French food company now the target of Istanbul restaurateurs who say revenue from $2bn’s worth of Turkish meals is at stake.

This follows the French Senate’s decision, late on Monday night, to approve a law making it a crime to deny that the Ottoman Empire committed a genocide against Armenians in 1915.

Turkey, which denies that the mass killings constitute genocide, furiously opposes the law and previously threatened “permanent sanctions” were it to pass. But, for now, Ankara has stayed its hand, putting its hopes in a last minute deliverance from an uncomfortable dilemma.

Turkey previously suspended political, military and economic meetings when the French National Assembly passed the bill in December and Recep Tayyip Erdogan, prime minister, suggested this week he might not return to France if Nicolas Sarkozy, French president, is reelected.

But further steps could be problematic. As a country with a customs union with the European Union, Turkey cannot block imports from any EU state, including France.

It could seek to prevent French companies from winning state tenders but the difficulty with many such competitions over the past year has been a lack of interest or funding among qualified companies – not problems that excluding French contenders would help solve.

And it might be equally counterproductive to act against French companies already established in the country. For example, Renault’s majority owned Turkish subsidiary has been a source of exports to markets such as North Africa, Russia and the Middle East – no laughing matter in a country with as hefty a current account deficit as Turkey’s.

Indeed the bigger problem of sanctions – including diplomatic steps such as downgrading relations – is that no one thinks it likely that French parliamentarians will vote to overturn the new law. So the “permanent” steps Turkey is considering could turn out to be precisely that, rather than a mere gesture easily reversed.

No wonder then that Erdogan says now is a time of patience, while Abdullah Gul, the country’s president, suggests that dissident French Senators rush the new law to France’s constitutional council where it could possibly be annulled before being signed by Sarkozy. (Some 60 Senators are needed for such a move.)

Enter the Chamber of Istanbul Restaurant Owners, unencumbered by such calculations.

“We will carry out a boycott against the people who are trying to blacken the name of Turkey for political reasons in France,” declared Sait Karabagli, the chamber’s chairman, announcing steps he said would hit not just Sodexo but also Ticket and Multinet, two other French-owned food groups. “We and our 13,500 members have decided to say enough to the French companies,” he added.

Karabagli reckons $150m is at stake in the boycott he is proposing – part of the reason for his action in the first place. He claimed the French companies were exploiting Turkish restaurants by imposing an eight per cent commission on $2bn or so or receipts – and also asked for help for the Turkish state to get the commission come down.

Sodexo was unavailable for comment.

Meanwhile one real risk of the Turkish-French dispute is that someone, somewhere may have to eat their words.

Related reading:
Turkey lashes out over French genocide bill, FT
France and Turkey tighten the screw on Syria, FT
Erdogan, justice and the rule of law, FT