Trade

Turkey and UK plan talks to build on $31bn trade ties

July 18, 2023, 2:55 PM

Turkey UK trade: A bus production line at a factory in Arifiye, Sakarya province. Vehicles are one of Turkey's main exports — Economists said the wage hike was set to cause a medium-term deterioration in the outlook for inflation

Governments want to renegotiate free trade agreement
UK is Turkey’s 4th biggest export market
Talks on revised deal to begin next year

Turkey and the UK are to begin talks on a revised free trade agreement, building on a relationship that was worth £23.5 billion ($30.7 billion) in 2022.

The deal would replace the existing UK-Turkey agreement, which was put in place after Brexit and does not cover services or digital industries.

The UK is the second biggest services exporter in the world, behind the US. The sector contributes around 80 percent of the UK’s GDP.

The announcement on Tuesday follows a call last week between the two countries’ trade ministers, the UK’s Kemi Badenoch and Turkey’s Ömer Bolat. The talks are expected to start next year.

Turkey is a major supplier of goods such as vehicles, clothing and electrical machinery to the UK, which is its fourth largest goods export market. British exports to Turkey include power generators and metals.

Total bilateral trade increased by 30 percent last year compared to 2021. UK exports to Turkey were valued at £8.5 billion while UK imports from Turkey totalled £15 billion.

Turkey was the UK’s 18th largest trading partner in 2022, accounting for 1.4 percent of total UK trade.

The UK-Turkey Joint Committee, which oversees implementation of the free trade deal, met on Tuesday in Ankara to move formally towards renegotiation.

Badenoch, the UK’s business and trade secretary, said after the announcement: “Turkey is an important trading partner for the UK and this deal is the latest example of how we are using our status as an independent trading nation post-Brexit to negotiate deals that are tailored to the UK’s economic strengths.

“I look forward to using the deal to deepen the UK-Turkey trading relationship, drive economic growth and support businesses up and down the country.”

Lord Offord, the UK’s exports minister, will visit Turkey this month to meet business leaders and discuss opportunities.

Aircraft manufacturer Airbus, which has a long-term partnership with the Turkish government, welcomed the announcement.

Simon Ward, president of Airbus Turkey, said: “Greater alignment on cross-border trade will improve competitiveness and provide opportunities for businesses across numerous sectors.”