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UK hails Turkey deal as 'major win' for automotive and manufacturing sectors

Saleha Riaz
·3-min read
The Grand Camlica Mosque in Uskudar district of Istanbul, Turkey. Photo: Getty
The Grand Camlica Mosque in Uskudar district of Istanbul, Turkey. Photo: Getty

The UK government said it has locked in tariff-free trading arrangements with Turkey, just days after it agreed a historic post-Brexit trade deal with the EU, as it approaches the end of the transition period.

When the UK leaves the EU, it will lose the benefits that comes with being part of the bloc — unified tariffs and trading conditions with other nations — and it now has to work out separate deals.

Turkey is now the most recent country it has secured a trade deal with, and the first after the post-Brexit deal.

The government said the deal is a “major win for UK automotive, manufacturing and steel industries” and supports a trading partnership that was worth £18.6bn ($25bn) last year.

“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,” the Department for International Trade said in a statement.

READ MORE: UK and European Union strike historic Brexit trade deal

“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,” it added.

The 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.

This supports UK importers of textiles, where the annual increase in estimated duties would have been around £102m under World Trade Organization 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 £174m.

“In under two years we have now reached agreement with 62 countries – and the European Union – to cover £885bn of UK trade,” the government said.

“This is unprecedented, with no other country ever negotiating so many trade deals simultaneously,” it added.

The government said its ambition is to secure free trade agreements with countries that cover 80% of UK trade within three years.

International trade secretary Liz Truss said the deal “paves the way for a new, more ambitious deal with Turkey in the near future, and is part of our plan to put the UK at the centre of a network of modern agreements with dynamic economies.”

“More trade and investment will drive economic growth across our United Kingdom and help us build back stronger from COVID-19,” she added.

Meanwhile Andy Burwell, director for international trade and investment at CBI, said “Turkey’s customs union with the EU made a trade deal with the UK complicated, but the pace at which the deal has been finalised following the negotiated EU deal shows the strength and depth of the relationship.

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