A new era begins with the publication in the Official Gazette of the regulation regarding the Turkey-Ukraine Free Trade Agreement signed in Kiev, the capital of Ukraine, on February 3, 2022.
The FTA, negotiations between the two countries of which began in 2011, includes significant developments in trade in goods and services. The agreement covers many issues, from the removal of customs duties and transportation quotas to the promotion and protection of mutual investments.
TARGET OF $10 BILLION IN BILATERAL TRADE
Exports from Turkey to Ukraine increased by 20.4 percent last year compared to the previous year, reaching $2.7 billion. Exports from Turkey to Ukraine in 2022 were recorded as approximately $2.3 billion.
The foreign trade volume between the two countries exceeded 6.1 billion dollars at the end of last year.
In the first half of this year, Turkey’s exports to the country were $1.5 billion, while its imports from this country were $1.4 billion. In the same period, bilateral trade volume was calculated as $2.9 billion.
With the entry into force of the Free Trade Agreement between Turkey and Ukraine, the bilateral trade volume is aimed to increase to 10 billion dollars in a short time.
MARKET LOSSES FOR TURKISH EXPORTERS WILL BE PREVENTED
Within the scope of the agreement between the two countries, the customs duty burden on Turkish exporters will be largely eliminated. A significant portion of agricultural and industrial products originating from Ukraine will be liberalized. Thus, trade costs between the two countries will decrease and trade volume will increase.
The agreement will also provide tax reductions on some agricultural and iron and steel products that are sensitive for Türkiye.
Market loss will be prevented for Turkish companies, who will have the opportunity to compete under similar conditions with European Union (EU) exporters.
MUTUAL INVESTMENTS WILL BE ENCOURAGED
The agreement will bring significant gains, especially in terms of transportation and logistics. In this context, bilateral and transit transportation will be guaranteed without quotas, and trade between the two countries will be carried out freely without transportation quotas.
In addition, with the entry into force of the agreement, which aims to encourage and protect mutual investments, investment-related transactions and administrative processes in all sectors where the Turkish business world operates in Ukraine, such as construction, tourism, manufacturing, wholesale and retail distribution, pharmaceuticals, textiles, energy, freight and passenger transportation, will be simplified based on transparent and predictable rules.
