New Delhi: Turkey has sprung a surprise by emerging as a net gainer from the Brexit deal signed between the UK and the EU on Thursday.
Soon after the Brexit deal, Turkish Lira witnessed regaining its lost sheen and further touched its highest value for months, after Turkish Trade Minister Ruhsar Pekcan and Dominick Chilcott, the British ambassador to Turkey, signed a free-trade agreement.
Until the Brexit deal, the agreement between the two major economies were confined to the offices of the governments of the two countries. It would not have been possible to sign an agreement with Britain until its position in the European Union was resolved, as Turkey is not yet an EU member.
The free-trade agreement, which comes into effect on January 1, between the two countries has bought cheers among the businessmen of both sides as it would offer them freedom to transport goods and products without any tariffs.
Pekcan lauded the deal as the most significant trade pact for Turkey since the signing of a customs union agreement with the EU in 1995.
"The free trade agreement is a new and special milestone in the relationship between Turkey and United Kingdom," Pekcan said during the ceremony.
British Foreign Trade Minister was apparently elated after signing the deal as she believes that the deal ensures thousands of jobs in Britain as well as in Turkey, the seventh largest trade partner of the United Kingdom.
Trade between Turkey and the UK was worth 18.6 billion pounds in 2019, and the UK is Turkey's second-biggest export market, mostly for precious metals, vehicles, textiles and electrical equipment. The new deal will exempt around 7,600 UK businesses from preferential tariffs.
"It paves the way for a new, more ambitious deal with Turkey in the near future, and is part of our plan to put the UK at the centre of a network of modern agreements with dynamic economies," said the UK's International Trade secretary, Liz Truss.
Turkey is the manufacturer of one out of every 5 large vehicles sold in the British market. Turkey is also a good launch pad for the UK to court with the rich markets in south Asia and the Middle East.
The agreement also bears political implications as the UK has made cordial links with Ankara which faces collective isolation of the EU members. Though Britain is aiming at establishing its sovereignty in its decision of choosing its partners, the agreement with Turkey will not go down well with Brussels.
The two parties have committed to strengthen this cooperation by encompassing more sensitive areas, especially the military sector. Three years ago, Turkey and Britain finalised a defense deal worth $ 120 million to contribute to the Turkish warplanes development program, and the agreement was signed between BAE Systems and "Turkish Aerospace Industries" (Tusas).
Britain is counting on this deal in order to promote its defense industry, and Turkey expects to develop the capacity of the air force, as part of the Turkish military's endeavor to achieve self-sufficiency in the manufacture of war equipment.