UK-Turkey Free Trade Deal

On December 29th, 2020, the UK’s International Trade Secretary Liz Truss and Turkey’s Minister for Trade Ruhsar Pekcan finally signed the UK-Turkey Free Trade Agreement (FTA). The deal, which took effect on January 1st, 2021, aims to strengthen ties between the two nations and ensure that trade between the two will not be affected by the UK's exit from the European Union (EU). 

In 2019, trade between the UK and Turkey was £18.6 billion. The UK is Turkey's 2nd largest export market for goods like precious metals, vehicles, textiles, and electrical equipment. The country is also Turkey's 5th largest foreign investor, while over 3,000 British companies such as Unilever, Shell, BP, Vodafone, and HSBC are doing business in Turkey. 

Ruhsar Pekcan, the Minister of Trade of Turkey, labeled the agreement as necessary in future UK-Turkish relations, stating, "without a deal, about 75% of Turkish exports to the UK would be subject to tariffs, causing the loss of some $2.4bn (£1.78bn); this risk is now gone."

The new deal will allow the UK to secure preferential tariffs for 7,600 UK businesses that export machinery, iron, and steel to Turkey while protecting automotive and manufacturing supply chains. The deal also allows the two countries to widen their scope to include services and agriculture within the next two years.

Both the UK and Turkey are in desperate need of economic boosts due to their current vulnerable positions. To make matters worse, they are also not on good terms with one of their biggest trading partners, the EU. The UK voted to leave the EU in 2016 and has been going through an acrimonious negotiation with its former partners. Even though an agreement has been signed between the two, there is still a lot that needs to be finalized. 

On the other hand, Turkey's relationship with the union is also very rocky. The EU is worried that Turkey is backsliding on previous agreements, and Turkey's territorial disputes with EU member Greece have only further weakened their relationship. These actions have resulted in the EU parliament calling for a halt on Turkey's membership talks, making the FTA more needed than ever.

Learn More with Export Portal

Export Portal understands the importance of communicating relevant information to help businesses thrive in the world of trade. To learn more about the latest news, make sure to check out our Blog Page!