Türkiye said on Friday that negotiations to update the free trade agreement (FTA) with the United Kingdom would technically start in London in early June, a day after the two states announced the intention to include services and goods in the deal.
The two fellow NATO allies already have an FTA, which was rolled over when Britain left the European Union in 2020, but a review by both sides last year concluded there was room for improvement.
Trade Minister Ömer Bolat said the existing FTA that came into effect in early 2021 was established to provide a legal framework for mutual trade following Brexit and stressed the deal has progressed "remarkably well" despite the challenges posed by the COVID-19 pandemic.
"Our bilateral trade has reached $19 billion, with Türkiye having a surplus of $6 billion in trade last year. However, trade can fluctuate over the years. The crucial aspect is to maintain momentum in bilateral trade," Bolat told Anadolu Agency (AA).
His remarks came after his meetings with U.K. Trade Secretary Kemi Badenoch and British and Turkish businesspeople in the capital London.
The minister emphasized the strong partnership between Türkiye and the U.K. in military and political realms, highlighting their robust economic and trade relations.
Bolat said the existing free trade agreement covered industrial products and outlined the objectives for updating the deal.
These include expanding its coverage to include service sectors such as education, health care, banking, telecommunications, transportation and tourism, as well as encouraging and enhancing joint investments and obtaining mutual concessions in agricultural products.
Bolat emphasized that negotiations for updating the FTA were mutually proposed by both countries to facilitate an environment conducive to increasing trade on a win-win basis.
"We will seek to maximize benefits for our own country while they will present their demands for their own countries ... The existing FTA will continue for industrial products. However, if conditions are created where both countries can increase their trade on a win-win basis, then an agreement can be reached," said the minister.
Regarding the significance of cooperation beyond tourism, Bolat highlighted that Türkiye has a $5 billion services trade with the U.K., mentioning a memorandum of understanding signed two months ago in Istanbul for joint collaboration between Turkish and British firms in construction services abroad.
He also underscored the importance of financial support from the U.K.'s official export credit agency, UKEF, amounting to approximately $4 billion for critical projects in Türkiye, particularly in railways and renewable energy.
Bolat expressed the aspiration to surpass $19 billion in mutual trade despite a period of global economic slowdown. "Our initial goal for this year is to exceed $19 billion and reach $20 billion in bilateral trade," he noted.
Bolat also recalled Turkish Airlines' aircraft orders from Airbus, indicating significant collaboration between Türkiye and the U.K. in the aerospace industry.
The national flag carrier is set to buy 220 Airbus jets in a contract the British government called one of the U.K.'s biggest export deals to date due to the Airbus and Rolls-Royce parts made in the country.
Bolat emphasized that economic ties between the two nations are of paramount importance to the U.K., given the involvement of British companies in aircraft manufacturing and engine production in Türkiye.