FREE TRADE AGREEMENT SIGNED BETWEEN TURKEY AND THE UK

England, signed a free trade agreement with Turkey for the first time since the signing of the Brexit agreement to leave the EU. The trade agreement, signed by both trade ministers in a video conference call Tuesday, will enter into force on January 1. Thanks to the agreement, the current flow of goods of UK is expected to remain unaffected, with  leaving the EU at the end of the year.

While trade between London and Ankara was worth £ 18.6 billion in 2019; England, mainly for precious metals, tools and textiles was the second largest export market of Turkey for electrical appliances. Turkey's agreement with England is the fifth largest free trade agreement carried out after the agreement with Japan, Canada, Switzerland and Norway.

Although Turkey has a customs union agreement with the EU but not members of the EU. For that reason, the new agreement between the UK and Turkey, can not be enter into force until the Brexit agreement is completed. Therefore, the agreement will enter into force as of January 1, 2021, with the end of the UK's Brexit process.

The deal had an immediate impact on the foreign exchange market. After the deal, the Turkish Lira, which had been fluctuating against the dollar, started to gain value. The TL gained value against the Dollar and TL-Dollar parity reached the lowest level of December (7.3 levels). Similarly, the euro also depreciated against the TL and fell to the 9 band, the lowest value of December.