Entering final straight of signing the Free Trade Area Agreement between Ukraine and Turkey has become a significant event, though somewhat shaded by the events of the coming "Ukraine-EU" summit. However, if both documents are signed, it means that our country has made important steps to extend its economic partnership in both East and West. The majority of Ukrainians know Turkey as a tourist destination, but Turkey is and always has been Ukraine's up-and-coming partner in other spheres of economy.

Ukraine mainly exports to Turkey metals and agriculture products, in particular oils, fats, seeds. By the end of 2012 the export of Ukrainian goods to Turkey took the second place in the total volume of export, yielding only to the export to Russia. Comparing to 2011, goods turnover between two countries has grown by 7.8%. For January-July period of 2013 the share of export to Turkey made 6.1% in the total volume of export for the same period, then again, yielding only to the export volumes to Russia (24.9%). In other words, the trend to hold the second place persists. Moreover, a relatively new trend emerges. Thus, according to the State Statistics, Ukraine has increased the volume of supplies of sawn timber and rough wood, as well as hardcoal.

Import of Turkish goods in Ukraine includes, mainly, fruits, nuts, plastics, knitted fabric. During his visit to Turkey, minister of energy and coal industry Eduard Stavytski defined prospects for cooperation in oil and gas industry and atomic energy. In particular, the parties discussed joint projects within the Black Sea Economic Agreement, which will enable to diversify energy supplies to Ukraine. In this respect, Ukraine may benefit from the project of Trans-Anatolian gas pipeline from Azerbaijan to Turkey. And finally there is tourism, which is one of the primary industries for Turkey.
Investments as a line of cooperation are of no less importance. For the last 11 years Ukraine has been regularly presented in Izmir international fair, and it finally pays off with investment growth. Thus, in 2012 the share of Turkish capital in the total amount of foreign investments made about 0.3% and the growth itself made 14 billion US dollars. In particular, Turkey invests into Ukrainian manufacturing industry, transport and communication, real estate.

Going into details of the free trade area agreement with Turkey, ForUm asked experts about possible benefits for both countries. Serkan Bagin, secretary general of the All-Ukrainian public organization "Union of manufacturers and entrepreneurs of Turkey and Ukraine TUSIB", told ForUm that Turkey has adverse balance regarding the trade between Ukraine and Turkey, but with signing of the free trade area agreement the goods turnover will increase. "Ukraine mainly exports iron and steel, agriculture products, and invests into Turkish economy. In turn, Turkey exports cars and plastics. I doubt the structure of goods turnover will change somehow, as basic parameters of Ukrainian and Turkish economies will hardly undergo drastic changes within the next years. What we hope for is trade turnover growth." Serkan Bagin also noted that tourisms remains the key sector of cooperation. "According to the official data, more than half a million Ukrainian tourists have visited Turkey in 2013. Moreover, Turkey has updated the rules and prolonged visa-free stay for Ukrainian citizens from 30 to 60 days. Hopefully, Ukraine will make a return move. Turkey wants and expects more and more Ukrainians to come on vacation." In response to the question about trade barriers, which may limit the growth of goods turnover, Serkan Bagin noted it is a common problem of the world economy in general. "I cannot say that a certain group of goods cannot access Ukrainian market due to some barriers, and I do not think that Ukrainian barriers are an obstacle for mutual trade."

In turn, president of Ukrainian analytical center Oleksandr Okhrymenko confirms that the free trade area agreement with Turkey may become a positive push for Ukrainian engineering and metallurgy, but also adds that Ukrainian confectioners may benefit from it as well. "By the end of 2012 the goods turnover between Ukraine and Turkey made about six billion dollars. With signing of the free trade area agreement, the figures may grow up to 10 billion dollars and more. Unlike the trade with Russia or the EU, Ukraine's trade with Turkey has proficit, not deficit. Turkey makes bulk purchases of metal, and in case of signing the FTA agreement the export of Ukrainian metal may grow by several times. Ukraine may also expand supplies of its engineering products, primarily equipment for industrial enterprises. Moreover, the free trade area with Turkey will enable Ukraine to export a part of its confectionary goods and other alimentary products, which Russia does not want to take. In turn, Turkey may expand supplies of its consumer goods. Though the prices for such goods will be higher than for Chinese products, at least the quality will be better. Beside, Ukraine and Turkey may broaden cooperation in the sphere of tourism. Turkey can teach Ukraine how to make money in tourism."  

In her turn, Maria Salnykova, expert of the information analysis center FOREX CLUB in Ukraine, focused on the promising outlook of cooperation in oil and gas sphere. "You should understand that the primary goal of this free trade area agreement is a possibility to get cheaper gas. Thus, considering Ukraine's demand for gas, bilateral trade turnover may reach 20 billion dollars. For Ukraine it is very beneficial, as the volume of import will remain the same, but the cost of imported goods will go down. Moreover, considering current trade conflicts with Russia, the free trade area with Turkey with its simple conditions of cooperation will support Ukraine's economy, increasing the demand for domestic goods and stabilizing export."

Intensification of trading cooperation with Turkey will allow Ukraine to smooth those imbalances, appeared due to tense economic and political relations with Russia, as well as to defend better its position while negotiating on the free trade area with the EU. Experts agree that the FTA agreement with Turkey will do Ukrainian export a power of good and will support its metallurgy, engineering, AIC and confectionary production. As for outlooks of cooperation in consumer goods industry, Ukraine casts itself as a reliable partner, open for mutually beneficial economic cooperation.

Lilia Brudnytska


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