Brexit boon for Turkey
The Brexit process, which will determine the destiny of the UK, along with Prime Minister Theresa May and her cabinet, has stalled. Uncertainty and the differing views of parties have shown that the break up with the European Union, the country’s largest trading partner, is not as easy as it seems. Nevertheless, commercial actors are too experienced to leave the business to chance while politicians play their games. At a time when global crises are mounting, Britain is taking measures according to the results of Brexit both in the public and private spheres. According to British Chamber of Commerce in Turkey (BCCT) CEO, Emrah Oz, however, trade relations between Turkey and the UK may improve during the Brexit process.
Oz notes that British companies have put Istanbul at the center of their Brexit measures. “More British companies will make Istanbul a hub,” he says. “The only com- petitor is Dubai, but Istanbul has a power like Turkish Airlines. Istanbul has become the center of 14 countries in British foreign trade. British Eximbank has opened an office here.”
Turkey advantageous for British companies
Oz points to two main uncertainties: local elections in Turkey and whether the UK government will achieve its Brexit plans and predicts that both will become clearer in the spring. He emphasized that there have been eight high level visits between the two countries in recent months and that trade relations continue without a hitch. He cited 2017 statistics as an example. “When President Erdogan and Theresa May met in 2017, a $20 billion mutual trade target was set for that year. But this figure came in at $24 billion. Big deals were made and in 2018 there were direct investments from the UK to Turkey. Bupa acquired Acibadem Sigorta, Yotel Group invested in Istanbul Airport. The investments of Shell and BP are ongoing. The trade between the two countries over the last 5 to 6 years has increased by more than 20 percent per year.”
According to Oz, due to exchange rate volatility in Turkey there has been a decrease in imports from the UK but investments will continue due to the advantages in Turkish company values. Therefore, he expects that bilateral trade will increase by double digits in 2018.
Istanbul at the center
The main question for businesses in the UK, Oz says, is whether the country can afford to turn its back on a market like the EU. Since the EU is its largest commercial market, the UK will decide to take some measures to stay in the Customs Union. “British companies want to stay in the Customs Union,” he said.
Oz believes that after Brexit, Istanbul will be the business center for British companies and a regional hub. “Dubai is the other alternative but Turkish Airlines is Istanbul’s biggest weapon,” he said. There are around 500 British companies in Turkey mainly investing in foods, cosmetics, chemicals, technology, defense and the energy sector.
“Both countries rank fifth or sixth in bilateral trade. Turkey comes ahead of Denmark, Poland, Norway and Russia for the UK. In Brexit, what concerns Turkey is taxation. New sanctions may apply to the UK. For this reason, in May, the British mission in Istanbul was transformed into a commercial center for 14 countries. There was no commercial commissioner in Istanbul, where the consul was appointed as one of the 9 commissariats in the world. Because Turkey’s role will increase in the global positioning, we think that more British investments will come to Turkey in 2019.”