UK-Turkey Trade Relations Face Uncertainty Amidst Coronavirus Pandemic and Brexit

Strategic Insights -

The outbreak of the coronavirus in Turkey has highlighted the country's importance as a manufacturing hub for the United Kingdom, with over 400,000 surgical gowns airlifted from Istanbul to Britain in recent weeks. Trade between the two nations was valued at roughly £15 billion per year before the pandemic, with 90% of goods dispatched to Britain via Europe without tariffs or complicated rules of origin. Despite growing trade, Turkish business chiefs are disappointed with the slow pace of post-Brexit trade negotiations, which cannot proceed until a wider agreement with the EU is concluded.

Key Takeaways:

  • The UK relies heavily on Turkey for manufacturing supplies, including white vans, washing machines, car parts, and flat-screen TVs, with a trade value of £15 billion per year.
  • The coronavirus pandemic has accelerated the importance of Turkey as a manufacturing hub, with 400,000 surgical gowns airlifted from Istanbul to Britain.
  • Turkish business chiefs are disappointed with the slow pace of post-Brexit trade negotiations, which will only proceed once a wider agreement with the EU is concluded.
  • Ankara's feud with Europe over refugees may put Boris Johnson in an uncomfortable position, as he backed the EU in the dispute.
  • The Turkish case reflects how the EU's close relationship with non-member states could become a headache for British negotiators, who are likely to detect the influence of Brussels in trade talks long after the Brexit process is concluded.
  • Experts warn that if trade talks break down, the cost of Turkish goods will increase, and there may be delivery delays.
  • A key component of Turkish trade, which would need to be negotiated before a deal with the UK, is an "upgrade" of its relationship with the EU, including lifting quota limits on Turkish lorries imposed by Greece and Bulgaria.
  • Red tape restrictions imposed by EU transit countries are severely hurting Turkish trade, with Alper Ãzel of the International Transporters Association calling for quotas to be lifted.

Statistics:

  • £15 billion: The trade value between the UK and Turkey per year, before the pandemic.
  • 400,000: The number of surgical gowns airlifted from Istanbul to Britain in recent weeks.
  • 90%: The proportion of goods dispatched to Britain from Turkey via Europe without tariffs or complicated rules of origin.
  • 37: The number of free trade agreements concluded by Turkey to date.
  • £-Jan 2021: The expected trade agreement with Turkey by the British government.

Sources:

  • Chris Gaunt, chairman of the British Chamber of Commerce in Turkey, is cited as saying "Turkey is probably the closest country that has the capacity to produce this sort of material, due to a massive textile centre."
  • Berna Gozbasi, executive treasurer of Turkey's Foreign Economic Relations Board, is quoted as saying "We are sorry to lose a friend within the European Union, but we believe that Brexit also brings new opportunities to expand our bilateral economic relations."
  • Alper Ãzel, spokesman for Turkey's International Transporters Association, is quoted as saying "We have no quota limitation with the UK, but we do with Austria, Hungary, Slovenia, and others..."
  • Prof Ali Tekin, a UK-Turkey trade expert, is quoted as saying "Generally speaking the relationship is tense and the Europeans are very worried about the behaviour by Mr Erdogan, so I think the trust is very low."