Politics threaten Turkey's trade links When Turkey's energy minister was refused permission this week to fly to an oil and gas conference in northern Iraq it cast a spotlight on the political and economic tightrope his country has to walk. Baghdad's abrupt decision, which forced the mid-air turnround of Taner Yildiz, the mild-mannered minister in question, was part of a wider trend. In a sense, Ankara is caught between Athens and Damascus, between the economic crisis in the eurozone and the political crisis in the Middle East. Keen to reduce its dependence on the stagnant EU economy, Turkey has looked to its south and east for new markets, even though diplomatic relations with several of those countries have become vexed if not downright poisonous. With the risk that bad politics may yet turn those trade links sour, a political question mark hangs over Turkey's economic success story. The size of the shift is remarkable. Over the past five years, the EU's share of Turkey's total exports has plummeted from 57 to 38 per cent, even as the proportion going to the Middle East and Caucasus has doubled to 28 per cent. Next year Iraq is set to become Turkey's biggest export market, ahead of Germany. So far this year, Iran has been the second biggest, because of its purchases of billions of dollars of Turkish gold which have helped slash Ankara's current account deficit. But it does not need a particularly delicate nose to detect the whiff of political risk. To take the example of Iraq, Recep Tayyip Erdogan, Turkey's prime minister, and Nouri al-Maliki, his Iraqi counterpart, have lately been predicting civil war in each other's countries. Meanwhile, the shipments of gold to Iran do not look long for this world. They have already started being diverted to third countries such as the United Arab Emirates, presumably in an effort to avoid attention, and the US Senate has just backed legislation intended to bring them to a halt More generally, Turkey's push to the south and east is complicated by two big developments in the region. First, Sunni-Shia divisions have hardened, notably because of the war in Syria, where Iran and Iraq are on the opposite side from Turkey. At the same time, geographical boundaries drawn up by the British and the French early last century are coming under strain. What Ankara sees as the Shia Mr Maliki's excessively sectarian approach, is partly behind its dispute with Baghdad. But so, too, is the border issue: one fear in Baghdad, and perhaps the real reason why the energy minister's trip was so sensitive, is that planned gas and oil pipelines intended to link Kurdish northern Iraq directly with Turkey may speed that region's economic and, ultimately, political independence. Baghdad has already effectively stopped new Turkish companies from opening in most of the country, and last month the Iraqi government pushed out the Turkish Petroleum Corporation from an oil exploration deal in Basra. Turkish businessmen protest their strength is precisely the ability to thrive in adverse conditions that would make a western European pale. But such an argument can be stretched too far and after the Yildiz incident Turkish diplomats made their concern all too clear. Meanwhile, the shadow of sanctions lengthens over Turkey and Iran's economic ties. There are plenty of indications that Tehran currently uses Turkey to sidestep sanctions: Iranians set up 651 companies in Turkey during the first nine months of this year, more than twice as many as investors from any other country. But, as with the gold sales, the sustainability of the trend is open to doubt. And while Mr Erdogan argues that Turkey cannot afford to cut natural gas supplies from Iran - Ankara accounts for 90 per cent of Tehran's gas exports - Turkey has rejected similar sanctions in the past before ultimately complying. All of which means Turkey's businessmen face an uncertain future in the Middle East. Just as Ankara's greater diplomatic engagement with the region has involved risks so, too, has the shift in its economic focus. One big question amid the upheaval in the Arab world is whether economics will trump politics in that volatile terrain, or whether Ankara's trading dream will be dragged to earth.