What will new free trade deals mean for Turkey?

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Turkey is reaching out to build economic ties with Ukraine and the UEA.


Turkey appears to be entering a new era of bilateral cooperation, with free trade agreements on the cards between the Black Sea nation and the United Arab Emirates, as well as with Ukraine. But what exactly would be the benefits of this type of deal?

Here, we'll take a closer look at these examples of greater economic partnership, as well as what they could mean politically going forward.

Turkey and Ukraine

Turkish president Recep Tayyip Erdogan traveled to Kyiv this month to sign both a defense sector deal securing the provision of drones and an FTA that has been under negotiation for several years.

A bilateral agreement has arisen since Turkey began to emerge as one of Ukraine's most important trade partners over the past ten years, with trade growing 50 per cent during the first nine months of 2021 alone.

It is hoped that this value could double in the coming years thanks to the benefits of the FTA, leading to greater wealth for both nations.

Turkey and the UAE

Meanwhile, president Erdogan has also visited Abu Dhabi and Dubai this month to pave the way for further warming of trade ties between them. 

It is thought this will build on a November 2021 visit by Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed Al Nahyan to Ankara by adding to around 12 cooperation deals already signed.

Indeed, agreement was reached in a raft of sectors, including technology, energy, trade, direct investment and the environment, with the Burj Khalifa lit up in the colors of the Turkish flag to mark the success.

Benefits of a deal with the UAE

News of a forthcoming Turkish FTA with the UAE is particularly significant given the years of tense geopolitical relations between them. Both sides have frequently found themselves on opposite sides during the ongoing conflicts created by the Arab Spring in 2011 in particular.

President Erdogan's support for the Muslim Brotherhood proved inflammatory for the Gulf region, while Abu Dhabi and Ankara were on opposing sides in the Libyan civil war.

Relations became so tense that flights between Dubai and Turkey would frequently be suspended and UAE citizens were forbidden from accessing Turkish websites unless they had a VPN.

However, not only did the collapse of the Muslim Brotherhood relieve some of the tension, but there has been growing awareness that the economic needs of both economies are not being met by geopolitical sparring in regional conflicts.

Turkey's economy has found itself in crisis lately, with the value of the lira plummeting and inflation at an all-time high, while even the far-richer UAE knows that it will need to diversify away from oil as the world goes greener - and that it could use Turkey as a conduit to trade in Asia.

Both seem to be aware that they are critical trading partners and could significantly benefit from greater export volumes and the streamlined trade processes that could come about as a result of an FTA.

"Dialogue and cooperation between Turkey and the United Arab Emirates carries great significance for peace and stability in our entire region," said president Erdogan in Dubai this month.

Benefits of a deal with Ukraine

Meanwhile, Turkey is sure to be keen to strike a deal with Ukraine as it strives to play peacemaker during a time of growing tension between Ukraine and Russia.

Turkey has ties with its Black Sea neighbor in the defense industry, as well as due to its being part of the Ottoman Empire in the past.

However, Turkey also needs Russia as a key supplier of energy, not to mention the income it provides from tourism. For these reasons, it has taken care to preserve its relationship with Russia's president Putin (although even this may be tested due to Russia's recent military activities).

For Ukraine's part, developing smaller bilateral agreements is in its interest since it seems NATO membership may be a long time coming.

Oleh Nikolenko, a spokesman for the Ukrainian foreign ministry, told Politico: "In the meantime, we create smaller, mobile, flexible and efficient alliances that help us address our needs, including in security, today."

Turkey knows that this is a difficult time for its economy and appears to have embraced the potential advantages that working together with other nations and building bridges could have in future. It may therefore be that more FTAs could be sought by the nation soon.