Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Britain and Turkey signed an £18.6bn ($33.4bn) free trade agreement on Dec 29, labeled by Turkey’s President Erdogan as the “most important agreement since the customs union deal” struck with the European Union (EU) in 1995.


The British government commented that the deal secures existing preferential tariffs for 7,600 UK businesses, which exported goods to Turkey in 2019 and ensures the continued tariff-free flow of goods.


Highlighting the UK’s iron and steel industry, the government noted the agreement also ensures “preferential trading terms for UK businesses that exported more than £1bn worth of machinery, and iron and steel exports worth £575mn” to Turkey in 2019. In fact, British suppliers exported £456mn ($616mn) or 2.14mn mt of ferrous scrap to Turkey in the full year 2019.


Furthermore, Davis Index believes the free trade agreement will also benefit the British construction industry given that the UK will now exit the EU’s steel import quota system come January 1, 2021, enabling buyers to purchase construction steel without limitation.


In 2019, Turkey exported 6.19mn mt of steel and alloyed-steel bars and rods and 1.47mn mt of semi-finished steel products – almost all of which were consigned as square billets.


Tariffs applied to UK imports of steel-intensive goods, such as washing machines, will remain at 0pc, compared with up to 2pc under World Trade Organization (WTO) terms, which would have been applicable by default without a free trade agreement.


The British government gave Ford as a prime example of one of the main beneficiaries of the accord, given that the company exports commercial vehicle parts and engines from the UK to Turkey, which are then fitted to transit vans and vehicles, and imported back as a “finished products.”


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