Bilateral trade volume between UK, Türkiye heading towards to £20B

By Gokhan Yildiz

ISTANBUL (AA) – The bilateral trade volume between Türkiye and the UK reached £18.1 billion in the four quarters to the end of Q4 2021, according to the British consul general Istanbul and Trade Commissioner Eastern Europe and Central Asia.

"The Free Trade Agreement signed between the UK and Türkiye end of 2020 was very important in terms of safeguarding bilateral trade, which reached £18.1 billion in the four quarters to the end of Q4 2021," Kenan Poleo told Anadolu Agency.

Poleo said that this figure was a 20.2% increase compared to the previous year, which is a good sign of the resilience of the bilateral trade after the COVID-19 pandemic

Poleo underlined that Türkiye is an indispensable partner for the UK.

"Following Brexit, Türkiye and the UK are among the largest European countries not in the EU. While we hugely value our connections to the EU and European bodies like the Council of Europe, both of us are busily engaged in other regions of the world," Poleo said.

He went on to say, "The UK is working to strengthen our partnership with Türkiye and make both countries safer and more prosperous. That means working together on regional stability and security, partnering on counter-terrorism, and growing our bilateral trade and investment."

There is a high demand in the UK for Turkish-made goods; in fact, the UK has become the second biggest export destination for Türkiye, he said.

"Türkiye has become one of the key trading partners of the UK – well inside our top twenty export destinations. The new FTA has also removed any uncertainty about what would follow the customs union, an issue businesses on both sides were understandably concerned about. And crucially, businesses will continue to enjoy tariff-free access for Turkish exports to Britain and British exports to Türkiye."

"But we want to go further and have committed to adding new sectors to the FTA. According to the review clause in our trade agreement, by the end of 2022, the UK and Türkiye will start discussing new sectors, including services, agriculture, investments and the digital economy, which were not subject to our trade carried out under the EU's customs union. This will give us the opportunity to see the real potential of the trade between the two countries."

- Total exports to Türkiye amounted to £6.5B

Underlining that there are huge opportunities for the UK-Türkiye trade relationship, he noted in this period, total exports to Türkiye amounted to £6.5 billion, making Türkiye the UK's 18th largest trading partner and 23rd largest export market.

In addition to the bilateral trade, the mutual investments between Ankara and London continue to increase, he said, adding, "The UK was ranked as the top investor in Türkiye in 2021, accounting for 19% of all investment into Türkiye. Along with our long-term investors such as Vodafone, HSBC, Rolls Royce, BP and many more, we have recent investors like BUPA, Dyson and Vitabiotics."

Voicing satisfaction to see a growing number of Turkish investors realize their global ambitions through strategic investments in the UK, he said, "2021 was another year Turkish companies favored the UK among others and we now see an increase in the number and size of greenfield investments in various sectors in the UK."

"Some examples are Getir's over £100 million investment across the UK, Eren Holding's £ 500 million corrugated curd board investment and Ciner Group's glass bottling investment for £390 million. Technology scale-ups also continue to favour the UK for their global expansion."

Also, Poleo believes The Uk's open, liberal economy, large customer base, flexible and dynamic labor market, business-friendly taxation system, and strong, transparent rule of law will help more Turkish companies to invest in the UK.

The UK has positioned itself as a successful technology hub, there are various tech clusters spread over the country, creating unique ecosystems for technology scale-ups, he noted.

"We should continue to encourage investment to tie our economies together in a more meaningful way which will enable our businesses to become more competitive by benefiting from greater efficiency," he stressed.

- Türkiye's advanced manufacturing industry

He pointed out that there are untapped potentials in cooperation in clean growth and renewables, with the UK's complementary skills and expertise.

Noting Türkiye's advanced manufacturing industry is able to produce many parts in Türkiye and the UK has been exporting renewable Technologies, he added: "According to WB, Türkiye has 69 GW offshore wind capacity, which has not been used at all. The UK, on the other side, has huge experience with the world's largest offshore wind power plants. Hydrogen is another potential sector. UK companies now produce, store and transport hydrogen and fuel cells."

Stating that defense industry cooperation is an important strand of a commercial relationship, he said: "Türkiye has a well-developed defense industry and state-supported companies are listed in world's top 100, it has young qualified engineers, which is essential to developing this industry. UK industry has a lot to offer to complement Turkiye's ambitions in this technology-focused sector."

"Defense and Aerospace sectors offer opportunities where our countries can cooperate to create economies and scale and benefit each other's competitive advantage. We are happy to see already fruitful cooperation between our countries in this critical area. Turkiye's flagship project TF-X is a very good example of this collaboration."

He highlighted that digital transformation is a common priority for the UK and Turkish governments as set out in high-level strategic documents such as national AI strategies of both countries.

"The UK tech ecosystem remains one of the most exciting and promising in the world. Türkiye's strategic location, coalescing influences from Europe and Asia, makes it an ideal ground for fresh IT initiatives. There is a large population with supportive demographics, extensive reach of wireless and wireline broadband infrastructure, and supportive government policy. We hope that these factors, combined with UK support and cooperation, will rapidly accelerate the development of Türkiye's technology sector."

Noting that the UK – Türkiye Digital Technologies Forum with a Roundtable meeting was launched in June, Poleo added: "The Forum will provide a platform for collaboration/publicity of opportunities and will address some of the international/bilateral barriers to innovation in the sector. We will continue facilitating dialogue and realising commercial opportunities between the two countries."

Meanwhile, recalling the UK-Türkiye Green Finance Conference was delivered on March 17 in London, he said that more than 200 people attended, including five Turkish ministers and deputy ministers and five UK ministers, including the Turkish Minister of Treasury and Finance, Secretary of State for International Trade Anne-Marie Trevelyan.

"It was a truly impressive showing, and the delegations sent by Türkiye and the UK showed the commitment both sides have for achieving Net Zero and developing green finance in Türkiye," he said.

*Writing by Seda Sevencan