Turkey suspends high-level diplomatic ties with Netherlands as row escalates

By bne IntelliNews March 14, 2017

Turkey has announced a series of sanctions against the Netherlands in a diplomatic row that erupted last week when the Dutch government barred Turkish ministers from speaking at referendum rallies in Rotterdam.

Turkey will suspend all high-level diplomatic relations with the Netherlands, Deputy PM Numan Kurtulmus said on March 13.

Ankara also will not allow the Dutch ambassador, who is currently on leave, to return to Turkey and it will close its airspace to Dutch diplomats.

As part of the sanctions, the government will also advise the Turkish parliament to withdraw from a bilateral friendship group.

The measures, however, do not include economic sanctions.

The Netherlands is one of the top investors in Turkey. There are more than 2,500 Dutch companies doing business in the country, including ING Bank and Rabobank, though many of these are likely to be companies registered there for tax reasons.

Dutch companies have the largest share in FDI inflows to Turkey between 2002-2015 with over $21bn, according to the information on the website of the Turkish Foreign Ministry. In 2016 alone, Dutch companies’ investments in Turkey amounted to $956mn, a 14% share in total FDI inflows into the country.

Last year, nearly 1mn Dutch tourists visited Turkey, down from 1.23mn in 2015.

The bilateral trade, however, is less significant. Exports to the Netherlands were only $3.6bn last year, accounting for 2.5% of Turkey’s total exports. In return, Turkey purchased $3bn worth of goods from the Netherlands in 2016.

The measures would remain in place until the Netherlands took steps to redress its actions, Kurtulmus told reporters in Ankara after a cabinet meeting. He added that Turkey may also re-evaluate a key migrant deal with Brussels that has helped Europe stem the flow of refugees.

The EU has urged calm.

“Matters of concern can only be resolved through open and direct communication channels. We will continue to provide our good offices in the interest of EU-Turkey relations, the European Commission said in a statement.

Nato also called on Turkey and the Netherlands to defuse the tension.

“I would encourage all allies to show mutual respect, to be calm and have a measured approach,” Nato head Jens Stoltenberg said on March 13, Reuters reported.

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