How Brexit will affect UK – Turkey Trade, Is it an Opportunity or a Threat for British Businesses?
The UK and Turkey have locked in tariff-free trading arrangements, which will support the trading relationship worth £18.6 billion in 2019 and committed to working towards a more ambitious trade agreement in the future. 29 DEC 2020 - GOV.UK
“A historic day for Turkish-UK relations” "This is a historic day for Turkish-UK relations. We are taking the first step towards further deepening our ties... We reached a tariff-free agreement, as planned, which includes all industrial and agricultural goods," she said.
The Turkish trade minister, Ruhsar Pekcan and the UK’s ambassador to Turkey, Dominick Chilcott, attend the signing ceremony in Ankara via video link with Liz Truss in the UK. Photograph: Muhammed Yaylali/Anadolu Agency
“Today’s agreement will ensure preferential trading terms for UK businesses that exported more than £1bn worth of machinery, and iron and steel exports worth £575m, to Turkey in 2019. It also ensures UK businesses can continue to import under preferential tariffs, compared with no agreement,” Russ said.
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
Automotive: About a third of the engines built in the UK go to Turkey as one in five new vans sold in Britain come from Turkey.
There are more than 3000 British companies operating in Turkey. Main Turkish exports to the UK are mainly gold, made-up textile articles, garments, electrical and non-electrical machinery, motor vehicles and parts, iron and steel products, insulated wires, cables and other electric conductors as well as Construction materials.
The UK is Turkey’s second-biggest export market and Turkey’s fifth-largest investor.
There were fears among business people of the two countries recently because of Turkey’s customs union agreement, which in theory would have brought hefty tariffs. But, following the deal, the worries leave their place to relief.
HERE COMES THE OPPORTUNITY and WHY
The biggest trading partner of UK that accounts for app. 50% of total trade is "EU Bloc"
While the UK-EU TRADE AND COOPERATION AGREEMENT signed on Dec 2020 (BREXIT DEAL) secures a no-tariff or quotes on the movement of goods between the UK & the EU, there seems to be "Gray Areas" where the UK had to make compromises.
According to an article written by ANNA ISAAC from Politico, states:
"Overall, however, as expected, it is a deal that cleaves one market into two. The agreement will make trade between the U.K. and the EU more complicated than it has been while Britain was a member of the bloc, as explained in this at-a-glance view of the agreement, but it does go some way to smoothing the cliff-edge that would have been inevitable if no trade deal had been struck at all. The agreement on paper will also likely evolve during its implementation, making the consequences harder to judge for some areas than for others."
While Brexit creates and uncertainty for all British Businesses...Trade deal with Turkey is signed.
Turkey is a large and fascinating market with plenty of export / import opportunities for UK based businesses. It is home to both large multinationals and local businesses with a strong entrepreneurial culture. (Department for International Trade)
EU-UK trade is expected to face uncertainty and struggles in the soon future
Turkey is the only Non-EU country in the EU customs Union since 1995
Majority of the Turkish products already satisfies the EU regulations and standards
The Turkish (TL) currency has experience a dramatic value loss in the recent years and currently offers a highly competitive pricing for UK companies.
5 Jan 2021 (1 GBP = 10.07 TL)
5 Jan 2018 (1 GBP = 5.07 TL)
Potential Opportunities at a glance:
Energy: "Green" Energy Investment
Infrastructure: Construction Materials & Outsourcing
Advanced Manufacturing: Automotive After Sales Part
Healthcare and Life Sciences
+ Government Incentives & Project life cycle support, Proximity to EU, Middle East, APAC markets.
- Need for reliable, professional local partners in Turkey.
Would you like to hear more about Procurement or Investment Opportunities in Turkey?
Here, at Levene Consulting, with the support of our close & reputable partners in Turkey and local service providers based in UK, we aim to be your reliable bridge into Turkish market and ease the decision making process for you by right data and transparent consultative approach.
Who we are? We are a boutique consulting firm based in London / UK specialised in TR-UK trade & business. We work with some of the biggest companies in the Turkey which allows us to source an opportunity faster than anyone else.