IKV Chairman Ayhan Zeytinoğlu stated that the Free Trade Agreement (FTA) to be signed on 29 December 2020 is a pleasing development whereas reminding that to be able to sign a deal right after the EU-UK Trade and Cooperation Agreement, is a big success from part of the Turkish Trade Ministry which had been conducting bilateral negotiations with the UK during the transition period. IKV Chairman continued as follows:

“The UK is a crucial trade partner for Turkey, as it ranks our second biggest export market after Germany. Moreover, the UK is the 6th biggest economy in the world. Last year, our bilateral trade volume reached 25.25 billion dollars, while during the first 11 months of 2020, Turkey’s exportation to the UK was calculated around 10 billion dollars despite the conditions created by the pandemic. The FTA which will be signed today (29 December) will ensure the continuity of the trade relations between Turkey and the UK. But the Turkey-UK FTA must enter into force on 1 January 2021. The representatives of sectors such as gold, textile, garment, automotive, home appliances, machinery, iron, and steel that are among the biggest exports to the UK and of sectors that are highly dependent on importation from the UK were deeply concerned about the possibility of a ‘No Deal Brexit’. With the EU-UK Deal sector, representatives will be able to breathe again. On the other hand, although the Turkey-UK FTA will ensure the continuity of bilateral relations concerning industrial goods and processed agricultural products it will be based on country of origin certificate as Customs Union will end between the parties. 

The Turkey-UK FTA will ensure the existing trade continuity without any tariffs or quotas. In the deal, there also is a provision allowing the parties to negotiate the scope of bilateral relations and to expand them into new sectors by 2022. Therefore, it will be possible for bilateral relations to include areas such as services, digital tools, and agriculture. This will pave the way for a deep and comprehensive trade agreement which will allow deepening bilateral trade and investment relations. 

Lastly, Zeytinoğlu argued possible implications of the Turkey-UK FTA on the modernisation of the Turkey-EU Customs Union stating the following:

“The modernisation of the Customs Union with the EU, which is the biggest trade partner of Turkey, has not started yet due to political reasons. Nevertheless, on 1 October, the European Council offered a positive political agenda for Turkey that included the modernisation of the Customs Union. The issue will be negotiated at the European Council in March 2021. The fact that Turkey has signed an FTA could be an incentive to accelerate the modernisation process of Turkey-EU Customs Union, which would be a very positive achievement in Turkey’s exportation goals and also regarding foreign investment.”