Ankara and Kyiv are set to sign a long-awaited free trade deal, Ukrainian President Volodymyr Zelenskyy said on Tuesday, days before Turkish President Recep Tayyip Erdoğan departs for an official visit to the ex-Soviet country that is expected to add a further boost to bilateral relations.
Erdoğan’s visit, expected on Thursday, is particularly meant to defuse tensions between Ukraine and Russia amid a standoff after Moscow massed tens of thousands of troops near Ukraine’s borders in recent weeks.
"We provide guarantees of financial stability for our country. We are preparing to send a strong economic signal – to sign within these two days the free trade agreement with Turkey," Zelenskyy was cited as telling lawmakers at the parliament Verkhovna Rada.
"Our groups are working so I’m sure we will agree on everything," the president noted.
Russia has more than 100,000 troops near Ukraine’s borders, while it denies plans to invade – an action that the United States and its allies have warned would trigger tough sanctions.
Ankara has good ties with both Kyiv and Moscow, but opposes Russian policies in Syria and Libya, as well as its annexation of the Crimean Peninsula in 2014.
While forging cooperation with Russia on defense and energy, Ankara has boosted its cooperation and also sold armed drones to Ukraine.
"Erdoğan will convey messages to Zelenskyy on maintaining peace in the region and preventing a rise in tension and hot conflict," an official told Reuters on Monday.
Last week, Erdoğan said Russia would be unwise to attack Ukraine and if it does, Turkey would do what is necessary as a NATO member.
Surging trade, defense cooperation
The Turkish president’s visit is seen by businesspeople as paving the way for talks on further cooperation and efforts for greater bilateral trade volume, which rose 67% year-over-year to around $7.42 billion (TL 99.28 billion) in 2021.
The figure surged from $4.68 billion in 2020 and could leap up to $10 billion within two to three years with a free trade agreement, said Ruşen Çetin, the head of the Foreign Economic Relations Board's (DEIK) Turkey-Ukraine Business Council.
Çetin said the FTA is expected to be signed on the sidelines of the 10th High Level Strategic Council meeting to be held during Erdoğan’s visit, which will mark the 30th anniversary of diplomatic ties.
Erdoğan and Zelenskyy have set a $10 billion annual trade volume target. Turkey’s exports surged 43% year-over-year to $2.9 billion last year, up from $2.1 billion in 2020, Çetin told Anadolu Agency (AA) on Tuesday, citing Turkish Statistical Institute (TurkStat) data.
Imports were up 87% to $4.52 billion versus $2.59 billion in 2020. The two countries have high exchanges, particularly in steel, yachts, the shipping industry, furniture, automotive supplies, fruits and vegetables, as well as the defense industry.
"If the FTA is signed between the two countries, our trade volume will increase up to $10 billion, which is a serious figure, in the next two to three years," Çetin said.
"The FTA has been on the agenda for many years. Issues such as slowing down or eliminating hampering tariffs and measures are being discussed. Most of these will be eliminated if the FTA is signed."
Ukrainian visitors are one of the most important markets for the Turkish tourism industry.
More than 2 million tourists arrived from Ukraine in 2021, a year-over-year increase of 106.5%, according to official data, reflecting a recovery as the impact of the initial wave of COVID-19 pandemic measures in 2020 receded. The countries agreed on visa- and passport-free travel in 2017.
Çetin noted the growing defense cooperation, citing exports and agreements made over the last couple of years, stressing there would "definitely" be talks on this area as well during Erdoğan’s visit.
The Ukrainian army has Turkey-made Bayraktar TB2 unmanned combat aerial vehicles (UCAV) in its inventory. Kyiv also inked a contract to purchase warships from Turkey. Ukraine is providing Turkey with important equipment and parts, particularly helicopter engines.
"No one is in favor of the political tension between Russia and Ukraine. This tension could inevitably affect our trade," Çetin said.
"There are no problems inside Ukraine for now. So far, there are no issues that our business negotiations, relationships and investments have been affected by. I don’t think there will be either because this issue could be solved in the triangle of Russia, Ukraine and Turkey," Çetin added.
"It is President Erdoğan who can best agree with the two sides on this issue."