British Trade Minister Kemi Badenoch arrived in Istanbul on Friday to meet her Turkish counterpart Ömer Bolat to strengthen business links ahead of the expected launch of talks on a new free trade deal later this year.
Both Britain and Türkiye have agreed there is room to broaden the scope of their current free trade agreement, which was rolled over when Britain left the European Union.
Bolat said the ministries of both countries are currently conducting internal negotiations to develop and expand the deal into new areas. Their existing trade agreement covers goods but not services, digital or data.
"We hope to initiate negotiations to enhance the Türkiye-U.K. free trade agreement in new areas within 2024, he told the 7th Türkiye-U.K. Economic and Trade Joint Committee (JETCO) meeting.
Badenoch emphasized the opportunities for developing trade and investment partnerships between the two countries. She noted that trade between Türkiye and the United Kingdom had doubled in the past decade, and there is potential for further growth.
"I’m delighted to be here to try to unlock more U.K.-Türkiye trade ahead of talks on a 21st century trade deal later this year," she said, noting Britain's services sector in particular could benefit from any new agreement.
"There are significant opportunities in both countries to create employment, increase productivity, and foster growth for individuals and businesses," she noted.
Bilateral trade between Türkiye and the U.K. was up more than 17% to 26.2 billion pounds (about $33.16 billion) in the 12 months to June 2023, according to the British Consulate-General in Istanbul. It makes Türkiye the 17th largest trading partner for the U.K.
Total U.K. imports from Türkiye amounted to 16.1 billion pounds in the four quarters to the end of the second quarter of 2023.
"With its major economy and strategic position – where Europe, the Middle East and Asia meet – Türkiye presents huge opportunities for U.K. businesses," said Badenoch.
"I'm excited to start discussions on ensuring our new trading relationship with Türkiye unlocks those opportunities."
Britain is in advanced talks with India on a new free trade deal, and its Trade Ministry said it wished to progress talks on services-focused trade deals with Switzerland, Mexico and South Korea as well as Türkiye in 2024.
Bolat and Badenoch on Friday signed the Türkiye-U.K. JETCO Protocol and Action Plan, aimed at strengthening and advancing cooperation between the two states.
"This protocol and action plan cover trade, investment, contracting, technical consultancy services, science, technology, customs, as well as culture, environment, energy, and transportation, among other sectors," said Bolat.
During the trip, Badenoch will also visit Turkish Airlines, which 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.
She also announced that a U.K. guarantee helped secure over 1.2 billion euro ($1.31 billion) loan to build a 140-kilometer high-speed electrified railway connecting Kayseri and Yerköy.
The new railway line will help the country expand its low-carbon rail network, reduce road congestion, and cut net emissions on the Kayseri-Yerköy route by over 6,500 tons of CO2e per year.
UKEF, Britain's export credit agency, guaranteed the facility, with Italian (SACE), Polish (KUKE) and Austrian (OeKB) counterparts providing significant reinsurance.
Connecting to the Ankara-Sivas line which opened in April 2023, the new route is also expected to support regional economic growth by increasing regional passenger and freight rail capacity around Türkiye's capital region.
It marks the third high-speed railway project that UKEF, SACE and OeKB have jointly backed in Türkiye, with their support now helping to lay more than 900km of track for a more sustainable rail network.
"The U.K. is a services superpower – the second biggest exporter of services in the world – and one of my top priorities this year is using trade deals and strengthening business links to boost exports," said Badenoch.
Türkiye is a major supplier of goods such as vehicles, clothing and electrical machinery and goods to the U.K., which is its fourth largest goods export market, in return for 7.3 billion pounds of U.K. goods exports including power generators and metals.
While in Türkiye, Badenoch will also meet with top U.K. and Turkish investors, including Ford and Mott MacDonald, to discuss how the U.K. and Türkiye can boost investment in sectors such as manufacturing, tech and transport, building on the 8.9 billion pounds of U.K. investments in Türkiye and 720 million pounds of Turkish investments in the U.K.
Badenoch is also expected to sign a memorandum of understanding (MoU) on third-country collaboration to support joint U.K.-Türkiye projects such as the recent deal to develop 350km of drainage infrastructure in Iraq, to which UKEF will contribute 226 million pounds.
The statement said the minister would also announce Türkiye as a priority country under the U.K.'s International Science Partnership Fund (ISPF) – "opening the way for the best of the U.K. and Türkiye's scientists and innovators to partner together and bid into a 337 million pound global fund."
