07 March 2019

Financial Times: Fear of Brexit disruption stalks Turkey-UK trade ties

Turkey and the UK have a strong political relationship, and have spent the three years since the Brexit vote informally discussing the outline of a future free trade agreement. But Theresa May’s government made clear last month that an Ankara-London deal would not be in place in time for Britain’s scheduled exit date of March 29. Turkey’s status as a customs union partner but a non-EU state means that its hands are tied until the EU has itself struck a deal with the UK, experts said.

“The agreements say we can only sign a deal once the EU has a deal,” said Pinar Artiran, a professor of law and the World Trade Organization chair at Istanbul’s Bilgi University. “There has always been this problem.” Ms Artiran said that, while the customs union had brought many benefits to Turkey, the “asymmetrical” nature of the agreement meant that Ankara struggled to stand up for its own interests.

“We cannot take part in the decision-making process,” she said. “When trade agreements are being negotiated with third countries, or new legislation is being made, we are just notified. We do not have a seat at the table.”

Such concerns underscore UK anxiety about a possible similar arrangement for Britain after Brexit. Jeremy Corbyn’s opposition Labour party has called for the UK to be in a “permanent customs union” with the bloc, while the backstop to prevent a hard border with Ireland also involves elements of a customs union.

But the most worrying prospect for Turkish companies, and for the wider economy as it stands on the brink of recession, is a no-deal Brexit. Turkish products would face UK import tariffs and could struggle with delays at the British border. [...]

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