Free Trade Agreement (FTA)
The UK and Turkey signed a free trade agreement (UK-Turkey FTA) on 29 December 2020. A free trade agreement aims to reduce barriers to trade between signatory countries.
This is one of several agreements that the Government has created since the UK’s departure from the EU, in order to maintain as far as possible existing trade relationships with other countries.
The Department for International Trade’s guidance on trade with Turkey states that the UK’s previous trading relationship with Turkey was governed by the EU-Turkey customs union. These existing arrangements have now been transitioned into a traditional free trade agreement.
The UK-Turkey FTA has provisionally applied since 1 January 2021 and awaits ratification procedures by both countries.
What The UK-Turkey FTA Does
The UK-Turkey FTA sets out how the new trading relationship between the UK and Turkey works. The Department for International Trade’s guidance on trade with Turkey summarizes the provisions in the agreement:
- trade in goods – including provisions on preferential tariffs, tariff rate quotas, rules of origin and sanitary and phytosanitary measures;
- customs and trade facilitation;
- intellectual property;
- government procurement;
- technical barriers to trade;
- trade remedies; and
- dispute settlement.
The Government Published Several Documents Alongside The UK-Turkey FTA, Including:
- Explanatory Memorandum: This includes policy considerations. For example, the purpose of the UK-Turkey FTA is to ensure the continuity of trade between the UK and Turkey. The Government says it is intended to have the same effect as pre-existing arrangements that the UK was a party to whilst a member of the EU. However, due to the nature of Turkey’s relationship with the EU, there are certain elements that cannot be replicated in the new agreement. This includes the free circulation of goods. In these cases, the UK-Turkey FTA provides alternative arrangements.
- Report to Parliament by the Department for International Trade: This report includes an explanation of the differences between the UK-Turkey FTA and the existing arrangements with the EU. The main difference is the transition from a customs union to a traditional free trade agreement structure. In the EU-Turkey custom union, goods benefit from free circulation between the EU and Turkey. This is different to a free trade agreement, where products can only be traded free of import duties if they originate in signatory countries. The report states that these changes impact upon trade because goods now need to meet preferential rules of origin agreed between the UK and Turkey. The new rules of origin provisions also affect the documentation requirements for traders.
- Annex to Decision No 02/2021: This provides an update on the new rules of origin provisions.
Unless the UK and Turkey agree otherwise, either country can terminate the agreement six months after notifying the other party in writing.