Türkiye and UK Sign Trade Plan Ahead of FTA Upgrade

Türkiye and the United Kingdom have signed a 16-point JETCO action plan to accelerate negotiations on upgrading their 2021 Free Trade Agreement (FTA), with the aim of lifting bilateral trade toward US$40 billion and deepening cooperation in trade and investment. The move comes as two-way trade approaches GBP 28 billion, remains goods-heavy and imbalanced, and underscores the strategic importance of expanding the agreement to cover services and investment more comprehensively.

Türkiye and the United Kingdom (UK) have signed a new trade action plan aimed at deepening bilateral economic cooperation, marking a key preparatory step toward upgrading their existing Free Trade Agreement (FTA). The move signals renewed momentum in Ankara–London trade relations as both sides seek to modernize the post-Brexit framework governing their commercial ties.

The agreement was concluded during a high-level meeting of the UK–Türkiye Joint Economic and Trade Committee (JETCO), underscoring both governments’ intention to expand trade volumes, improve market access, and address non-tariff barriers ahead of formal FTA upgrade negotiations.

Türkiye-UK trade volumes and sectoral cooperation

Bilateral trade between Türkiye and the UK has continued to grow steadily. UK official statistics show that the relationship is sizeable and has continued to expand in current-price terms.

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In the four quarters to the end of Q2 2025 (the 12 months to the end of June 2025), total UK–Türkiye trade in goods and services reached GBP 27.9 billion, an increase of 4.4 percent (or GBP 1.2 billion) compared to the previous year. Over the same period, UK exports to Türkiye totalled GBP 9.9 billion (up 2.4 percent, or GBP 232 million) while UK imports from Türkiye reached GBP 18.0 billion (up 5.6 percent, or GBP 951 million).

This left the UK with a total trade deficit of GBP 8.1 billion with Türkiye in the four quarters to end-Q2 2025, widening from a GBP 7.4 billion deficit in the four quarters to end-Q2 2024. The deficit is driven primarily by goods: the UK recorded a trade in goods deficit of GBP 7.2 billion over the period, alongside a trade in services deficit of GBP 882 million.

Structurally, trade remains goods-led. In the four quarters to end-Q2 2025, goods accounted for 65.8 percent of UK exports to Türkiye (GBP 6.5 billion), while services accounted for 34.2 percent (£3.4 billion). On the import side, goods represented 76.3 percent of UK imports from Türkiye (£13.7 billion), while services were 23.7 percent (GBP 4.3 billion).

The calendar-year picture is similar. In 2024, total trade reached 27.3 billion, up 4.0 percent year-on-year. UK exports were GBP 9.5 billion (down 4.4 percent), while UK imports were GBP 17.8 billion (up 9.2 percent), reinforcing the pattern of higher import growth and a persistent deficit.

These figures matter for the FTA upgrade: if the agreement remains primarily goods-focused, it may improve procedures and reduce friction, but it is less likely to shift the broader imbalance or capture higher-growth segments, especially services and investment-driven trade.

Türkiye-UK tare in goods

The commodity mix illustrates the depth of industrial linkages and the concentration of trade in a few major categories.

In the four quarters to end-Q2 2025, the top UK goods exports to Türkiye were led by:

• Mechanical power generators (GBP 1.6 billion; 24.4 percent of goods exports);

• Cars (GBP 797.7 million);

• Metal ores and scrap (GBP 594.1 million);

• Beverages and tobacco (GBP 489.4 million);

• Medicinal and pharmaceutical products (GBP 307.3 million).

UK goods imports from Türkiye in the same period were led by:

• Road vehicles other than cars (GBP 2.7 billion; 20.1 percent of goods imports);

• Cars (GBP 1.5 billion);

• Clothing (GBP 940.1 million);

• Miscellaneous electrical goods (GBP 809.9 million); and

• Electrical machinery (consumer) (GBP 762.4 million).

For businesses, these categories point to where an upgraded agreement could be most immediately relevant, rules of origin for vehicles and components, customs cooperation and trusted trader mechanisms for industrial supply chains, and improved trade facilitation for consumer goods with high volumes and frequent shipments.

Services: UK strength in market share, Türkiye strength in travel receipts

The services data provides one of the clearest arguments for broadening the FTA beyond goods.

In the four quarters to end-Q2 2025, the UK’s top service exports to Türkiye were:

• Financial services (GBP 717 million);

• Transportation (GBP 696 million);

• Travel (GBP 670 million);

• Other business services (GBP 519 million);

• Intellectual property (GBP 257 million).

On the import side, services imports from Türkiye were dominated by travel at GBP 3.3 billion (76.9 percent of services imports), followed by transportation (GBP 388 million) and other business services (GBP 265 million). This helps explain why the UK runs a services deficit with Türkiye, even as the UK maintains a relatively strong competitive position in higher-value service segments such as finance and professional services.

That relative strength is also reflected in the UK’s market share metrics for 2024:

• Total UK market share in Türkiye: 3.3 percent (goods and services),

• Goods market share: 2.6 percent,

• Services market share: 7.9 percent.

In practice, this suggests that an upgraded FTA that meaningfully improves services access and reduces regulatory friction could be one of the most consequential areas for UK businesses—and one of the areas with the greatest potential to change the overall balance of bilateral trade.

Investment ties: Sizeable UK outward FDI stock in Türkiye

Trade is only one part of the economic relationship. UK outward foreign direct investment (FDI) stock in Türkiye stood at GBP 7.5 billion at the end of 2023, a 4.9 percent decrease (or GBP 385 million) compared with end-2022. Türkiye accounted for 0.4 percent of total UK outward FDI stock.

This is relevant to the upgrade agenda for two reasons. First, a modernised FTA typically includes provisions that improve investment predictability, transparency, protections, and clearer pathways for commercial presence. Second, it signals that UK–Türkiye relations already extend beyond cross-border trade into long-term operational commitments, supply chains, and service delivery models that are harder to capture in a goods-only framework.

Business footprint and regional distribution

The data also suggests a wide business base behind the bilateral relationship. In 2024, around 7,800 UK VAT-registered businesses exported goods to Türkiye, while around 14,200 UK VAT-registered businesses imported goods from Türkiye, indicating a particularly large importer ecosystem.

Goods trade is also geographically distributed across the UK. In 2024, UK goods exports to Türkiye were strongest from regions including the North East and West Midlands (among others), while imports were heavily represented across multiple regions including London and the South East—illustrating that the relationship is relevant to manufacturing clusters as well as consumer-facing and logistics-heavy parts of the economy.

Targets and timeline of the Türkiye–UK upgraded FTA

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On the policy side, both governments have framed the action plan as part of a push to raise bilateral commerce from current levels toward US$30 billion in the short term and US$40 billion in the medium term. Separately, UK business stakeholders have suggested that an upgraded FTA could potentially enter into force in the second half of 2026, depending on the pace of negotiations and domestic ratification.

For Türkiye, closer trade ties with the UK form part of a broader strategy to diversify export markets and deepen partnerships beyond the European Union. For the UK, upgrading the FTA with Türkiye aligns with its post-Brexit trade policy objectives, particularly the pursuit of deeper economic relationships with large, fast-growing markets.

An upgraded agreement could be particularly significant for services trade, where British firms have strong competitive advantages, as well as for Turkish exporters seeking more predictable and comprehensive access to the UK market.

Outlook for an upgraded Türkiye-UK FTA

While negotiations are ongoing, expectations are building around the timeline for implementation.

In December 2025, Chris Gaunt, chair of the British Chamber of Commerce, indicated that an upgraded UK–Türkiye FTA is likely to enter into force in the second half of 2026.

If concluded as planned, the modernised agreement would mark a substantive evolution of UK–Türkiye trade relations, supporting higher trade volumes, deeper investment ties, and a more resilient bilateral economic partnership in an increasingly uncertain global trade environment.

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