ANKARA, Turkey: Turkey and the United Kingdom have signed a free-trade agreement as the UK prepares to leave the European Union’s economic orbit at the start of the new year.
The deal, which will come into effect on January 1, aims to support trade between the two countries which was worth more than $25 billion in 2019.
It is one of many post-Brexit trade deals the British government is pursuing with nations around the world and came days after it finalised a trade agreement with the EU.
The UK left the EU on January 31 of this year but remained subject to the bloc’s business regulations and within its customs union during a transition period that ends on December 31.
Turkish Trade Minister Ruhsar Pekcan and Dominick Chilcott, the British ambassador to Turkey, signed the British-Turkish agreement.
Pekcan hailed the deal as the most significant trade pact for Turkey since the signing of a customs union agreement with the EU in 1995.
“The free trade agreement is a new and special milestone in the relationship between Turkey and United Kingdom,” Pekcan said during the ceremony. Britain is Turkey’s second-largest export market.
A British government statement said the deal will secure existing preferential tariffs for some 7,600 British businesses that exported goods to Turkey in 2019, ensuring the continued tariff-free flow of goods.
Both countries have said the deal will lead to a more comprehensive agreement in the future.
Both the countries secure trade agreement in a major win for UK automotive, manufacturing and steel industries.
The deal supports a trading partnership worth £18.6 billion last year.
The agreement lays the groundwork for a more ambitious UK-Turkey trade relationship in the future.
The deal will secure existing preferential tariffs for the 7,600 UK businesses that exported goods to Turkey in 2019, ensuring the continued tariff-free flow of goods and protecting vital UK-Turkey supply chains in the automotive and manufacturing sectors.
Both countries have also committed to working towards a more ambitious free trade agreement in the future, which will go further than the existing deal and will be tailored to the UK economy.
Today’s agreement will ensure preferential trading terms for UK businesses that exported more than £1 billion worth of machinery, and iron and steel exports worth £575 million, to Turkey in 2019.
It also ensures UK businesses can continue to import under preferential tariffs, compared with no agreement. This supports UK importers of textiles, where the annual increase in estimated duties would have been around £102 million under WTO terms.
Tariffs applied to UK imports of washing machines and televisions will remain at 0%, compared to up to 2% and 14% respectively under WTO terms.
Vital UK-Turkey supply chains will also be protected for automotive manufacturers, such as Ford, which employs 7,500 people in the UK. Car parts are imported from the UK to Turkey to assemble the Ford Transit range of vehicles, a third of which are then exported to the UK. In 2019, UK car exports to Turkey were worth £174 million.