UK and Turkey to Update Free Trade Agreement (FTA)

Overview Chris Gaunt, Chairman of the British Chamber of Commerce in Turkey, stated that both nations are working to upgrade their existing 2020 FTA. Negotiations are expected to conclude by late 2025, with the new agreement taking effect in 2026.

Key Objectives

• Beyond Goods: While the 2020 agreement focused mainly on industrial goods, the update aims to expand cooperation into services, technology, AI, and engineering.
• Strengthening Services: Services currently make up 34% of UK exports to Turkey. The UK hopes to significantly increase this figure.
• Trade Volume: Current bilateral trade stands at £28 billion (approx. $36 billion USD), making Turkey the UK’s 16th largest trading partner.

Strategic Importance

• Turkey as a Gateway: Turkey’s location serves as a bridge between East and West, offering the UK a gateway to Middle Eastern and African markets.
• Investment Flow: Turkish tech startups are seeking capital in the UK, while British investors are looking for opportunities in the Turkish market.

Global Challenges The report notes several challenges impacting international trade, including:

• High inflation and high interest rates.
• Political uncertainty, specifically regarding U.S. tariff policies under the Trump administration.
• Tightening visa policies globally, though movement for UK-Turkey students and business professionals remains relatively flexible.

Conclusion The goal of the updated FTA is to provide stability and deeper economic cooperation, securing Turkey’s role as a regional hub and creating new business opportunities in emerging technologies.

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