UK, Turkey post-Brexit Free Trade Agreement
The Impact on Trade Between Turkey and the UK
The UK and Turkey have entered into a post-Brexit free trade agreement at the beginning of this year. In general the agreement ensures continuity across trade but there is a significant change in proving the origin of the goods which may have an impact on e-commerce businesses.
The UK has been pursuing many post-Brexit deals with countries around the world as it finalised a trade agreement with the UK. On 1 January 2021 a new free-trade agreement between Turkey and the UK came into effect.
In 2019, trade between Turkey and the UK was worth more than $25 billion. Britain is the second largest export market for Turkey and there are about 7600 British businesses that export goods to Turkey, which makes the deal significant for both countries and ensures the continued tariff-free flow of goods. However, there are a few changes that may impact on your business if you trade with Turkey as part of your e-commerce enterprise. There is definitely a great degree of continuity now that the trade agreement is in place, especially with regards to the tariff-free flow of goods. There are also some changes to consider most significantly the need to prove origin.
As a side note - An interesting and potential beneficial change is that in some instances the non-preferential applied rates for imports into the UK may be lower, this is due to changes in the UK’s Most Favoured Nation tariff schedule, so double check what applies for your business; you may be pleasantly surprised.
The main change resulting from the agreement is associated with “Rules of Origin”. All exporters now need to prove origin - that the good must originate in one of the parties. To benefit from preferential tariffs the importer will now be required to declare that they have proof that the goods conform with the rules of origin. The process for doing so is through self-certification and this is essential to be able to benefit from these preferential rates. The UK government has provided online tools that can be used to check product-specific and country-specific information that would now apply. These can be found at Trade with the UK and Check How to Export Goods. However, should you require additional information then a company that specialises in sales support can assist.
If your business exports from the UK then you can continue to use EU materials or processing in your exports to Turkey, however, you must also ensure that the working or processing you do in the UK goes beyond the minimal operations listed in the agreement and the other conditions are met. For example, it is not sufficient to just package or label a product from the EU and export it to Turkey as a good originating in the UK.
There are also still a few interim measures that are in place until 31 December 2021, a significant one for businesses selling in the UK is that some items that have the CE mark may continue to be sold in Great Britain. This applies to those goods which have been assessed by EU recognised notified bodies, including those based in Turkey.
The information contained in this article is from the UK Government website on guidance for Trade with Turkey and is meant to provide a brief overview of the free trade agreement. It is recommended that you continue to check on the information relevant to your business, especially considering that the agreement has a review clause that allows for expanding the deal within the next two years.
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