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Mar 08 2019

Concerns grow among Turkish companies over no-deal Brexit

The Turkish economy could lose billions of dollars if Britain does not reach a deal with the European Union before March 29 as Turkey exports many products to the United Kingdom via an EU customs union agreement that Ankara signed with Brussels in 1995, the Financial Times reported.

Britain and Turkey have been discussing a future bilateral trade agreement to keep the deals intact to minimise disruption for importers and exporters after March 29, but have not yet reached a deal.

"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," the newspaper said. Turkey does not have a seat at the table when the EU negotiates with countries about trade agreements, according to Pınar Artıran, a professor of law at Istanbul’s Bilgi University.

“There’s a lot of concern from Turkish companies. They want answers, but we can’t give answers because we don’t know (what will happen),” the FT quoted Chris Gaunt, the head of the British Chamber of Commerce in Turkey, as saying.

Turkish companies would face import tariffs and delays at the British border after a possible no-deal Brexit.

Worst hit would be Turkey’s car sector, with an estimated $3.8 billion loss a year for Turkey's economy and risking 5,900 jobs, according to the Financial Times.

The white goods and textile sectors follow the car sector. Turkish company Arçelik's BEKO products, which make up one-in-five home appliances sold in Britain, would be hit by a no-deal Brexit. The textile sector could lose $2 billion annually in the same scenario, according to the head of the Istanbul Apparel Exporters Association Mustafa Gültepe.

Despite the dark clouds wandering above the Turkish economy, some are still optimistic.

“I think in the end, if there is Brexit, the Turkey-UK relationship would get even closer due to what has gone on through this process,” the FT quoted the Arçelik CEO Hakan Bulgurlu as saying.

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