Turkish exports at risk by hard Brexit
The threat of the Britain’s hard exit from the European Union looms large over Turkey, which stands to lose access to its second-largest export market for years to come, Reuters reported on Monday.
Turkey’s autos, textiles and appliances face the biggest risk if Britain ultimately leaves the bloc without trade arrangements, effectively wiping out most of the country’s $3.7 billion (£2.8 billion) trade surplus with Britain, if there is a so-called hard, or no-deal Brexit, the agency said.
Among non-EU countries, Turkey would feel the most pain from the move with $2.4 billion annual loss in exports, followed by South Korea and Pakistan, it said, citing a United Nations report.
Exports are vital to Turkey’s economy as it recovers from recession after last year’s currency crisis knocked some 30 percent off the value of the lira. Britain’s departure from the bloc without a replacement trade deal would mean that Turkey, covered by the EU’s customs union, would lose open access to the British market.
Bilateral trade between the countries hit $18.6 billion last year, however, a hard Brexit would require that customs duties are imposed and that could only be reversed by a replacement deal.
“If we have a no-deal Brexit, Turkey and the UK can only seal their trade deal after the EU and the UK have done theirs. And that would take years,” Reuters quoted Kati Piri, the European Parliament’s rapporteur on Turkey, as saying.
Britain and the EU agreed last week to delay Brexit until Oct. 31. All options, including the hard Brexit, are still open.
Turkey has been covered by the EU’s customs union for more than 20 years.
“It will be very hard to replace the current trade chain if there is a no-deal Brexit,” Çigdem Nas, secretary general of Turkish think-tank Economic Development Foundation, told Reuters.
Duties and other disruptions would hit Turkey’s auto industry the hardest, followed by textiles and home electronics industries, the three categories that made up half of Turkey’s $11.1 billion exports to Britain last year.