The Ukraine–Turkey free trade agreement

Negotiations between Ukraine and Turkey on a free trade agreement ran, on and off, for well over a decade. The agreement was signed in February 2022, days before the full-scale invasion.

Why it took so long

Because the two economies compete in several places and complement each other in others, and the negotiation was essentially about which is which.

Agriculture was the persistent difficulty, as it is in almost every trade negotiation involving either country. Both are significant agricultural producers with politically sensitive sectors, and neither wanted full liberalisation across the board.

What it covers

Progressive elimination of tariffs on the large majority of industrial goods, with staged timetables for sensitive categories, and a more limited and quota-based arrangement in agriculture. Provisions on services, procurement and dispute settlement of the kind now standard in modern agreements.

The genuine opportunities

Machinery, vehicles and components, chemicals and construction materials moving one way; agricultural raw materials, metals and processed food moving the other. Textiles and consumer goods in both directions depending on segment.

The geography helps enormously: the Black Sea is a short route, and short routes matter most for heavy or low-margin goods where freight is a large share of landed cost.

What determines whether it delivers

Rules of origin, as always, and whether cumulation is available so that inputs from third countries do not disqualify a product. Customs procedure at both ends. And, in the current period, insurance and logistics rather than tariff levels.

A tariff removed is worth nothing to an exporter who cannot get cover for the shipment. That is the sequence in which these things actually bind.

For someone doing business between the two, the signing of an agreement fifteen years in the making is not a start but an invitation: the real work begins when the two customs services start reading the same document the same way. Having worked between these two countries for twenty years my expectation is measured — the difference it makes will be less than expected in the first five years and more than expected in the next ten.