The epochal Free Trade Agreement between Turkey and Ukraine, inked on February 3, 2024, heralded a new era of economic symbiosis between the two nations as it came into force on August 2, 2024. This watershed moment was officiated by a presidential decree published in Turkey’s official gazette, delineating the commencement of a mutually beneficial economic chapter.
The Turkish Trade Ministry, in its official communique, elucidated the ramifications of this agreement. An array of customs duties on Turkish goods previously imposed by Ukraine will be eradicated, while others will witness a phased removal over a designated transition period. This strategic abatement of trade barriers is anticipated to invigorate bilateral trade, fostering a robust economic nexus.
Complementarily, Turkey has committed to abolishing customs duties on imports of agricultural and industrial products of Ukrainian provenance. The Turkish Trade Ministry underscored that tax reductions, and within certain quotas, will be implemented for some sensitive agricultural and iron and steel products, cognizant of sectoral susceptibilities. A selection of products has been prudently exempted from the ambit of the agreement to safeguard domestic industries.
Further granularity on the provisions of the FTA is expected to be divulged by the Turkish Trade Ministry in subsequent days, shedding more light on the nuanced impacts of this comprehensive accord. This anticipation is shared by economic analysts and trade stakeholders keen on understanding the full spectrum of the agreement's implications.
Concurrently, Ukraine’s Ministry of Economy has articulated that Turkey will establish a zero import duty on 510 out of 840 metallurgical products under the auspices of the FTA. Additionally, reduced import duties will apply to another 130 products, signifying a substantial liberalization of trade in metallurgical commodities. This measure is envisaged to bolster Ukraine’s metallurgical sector, a critical pillar of its economy.
In a bid to nurture the domestic metallurgical sector, Ukraine has judiciously reserved the prerogative to impose customs duties on scrap metal exports. This protective stance aims to ensure the availability of raw materials for local industries, thereby fostering indigenous industrial growth and stability.
The commencement of the Ukraine-Russia conflict precipitated a marked decline in Turkey’s imports of finished and semi-finished steel and ferrous scrap from Ukraine. This downturn underscored the exigency for such a trade pact to reinvigorate and stabilize the metallurgical supply chain amidst geopolitical perturbations.
