Spotlight on…Turkey

TRENDS & INSIGHTS


MARKET INTELLIGENCE



Spotlight on…Turkey

Turkey is a key source of imports for many European businesses. Should yours be one of them?


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Average reading time: 5 minutes





Executive summary

Turkey is one of Europe’s major trading partners and a key supplier for many businesses.


Its advantages include proximity to Europe and cost-effective production, both of which can make compelling reasons to source from there.


It also benefits from being in a customs union with the EU, granting free movement and zero tariffs for many goods.






Turkey, which is the 17th largest economy in the world, is an important production centre for a range of industries and a vital source of imports for many European businesses.

Geographically positioned as a bridge between Europe and Asia – in fact its largest city, Istanbul, famously straddles both continents – the country can offer importers many of the benefits of both.

Production costs are often much lower than in western Europe, for example, while Turkey’s favourable time zone and proximity to the European market can make working relationships easier, enable faster response times, and often provide greater speed-to-market than suppliers further afield.

Add to that the potential for reduced logistics costs and, for many goods, the ability to import duty-free, and it’s easy to see why Turkey has become the fifth-largest trade partner for Europe.1




Turkey: at a glance

$206 billion

Value of bilateral trade between Turkey and the EU in 20232


$104.3 billion

Value of goods and services exported from Turkey to the EU in 20234


The EU is Turkey’s largest goods import and export partner:

41% of exports

were destined for the EU (2023 figures)

29% of imports

originated from the EU (2023 figures)3


Main EU imports from Turkey (2022 figures)5
 
 

Textiles (17.7%)

Transport equipment (17.5%)

Base metals and articles (17%)

Machinery and appliances (15%)





EU-Turkey customs union
EU-Turkey customs union
EU-Turkey customs union




Explained: the EU-Turkey customs union

One of the major advantages of sourcing goods from Turkey is the preferential treatment many of them receive due to the EU-Turkey Customs Union. This is a wellestablished agreement that has been in force since 1995, and allows for free movement, zero tariffs and zero quotas for goods that are covered by it.6

However, it’s important to realise that not all goods are covered by the union. It includes industrial products and processed agricultural products, but doesn’t apply to other agricultural products or coal and steel products, although these are the subject of separate trade agreements. You can find further details on the customs union and other trade agreements here.

For those goods that can benefit from the customs union, it’s essential that they are accompanied by an A.TR movement certificate when they move across the border. This acts as proof of their customs status, showing that the goods were already in free circulation in Turkey (or in the EU for exports to Turkey) and so therefore no import duty is due.7 It doesn’t show, or need to show, that the goods were actually manufactured in Turkey. As long as they are in free circulation, they can benefit from the preferential treatment.

It’s worth noting that since July 2024, electronic A.TR movement certificates have officially replaced physical copies. This follows on from similar measures introduced during the COVID-19 pandemic which both sides deemed successful and have chosen to retain.8

It’s also worth pointing out that the rules are different in the UK which, since it left the EU, is no longer part of the EU Customs Union and single market. Instead, the UK-Turkey Trade Agreement means that goods only count for preferential treatment if they originate in either Turkey or the UK, and instead of A.TR certificates shipments just need a declaration of origin on the commercial invoice or other shipping documentation to benefit.9




Three more things to consider
Three more things to consider
Three more things to consider




Three more things to consider




1


Finding a supplier

Deciding to import from Turkey is one thing, finding the right supplier is another critical step. Even if the fundamentals of the market are beneficial to your business, it’s essential to work with the right partner to deliver the benefits. So, where do you begin? Online marketplaces such as Alibaba can be a good start, while visiting domestic and overseas trade shows where suitable Turkish suppliers are exhibiting is another option.10 Both of these cut down on certain costs such as intermediary fees, but can be more labour intensive on your part. Another option is to use a sourcing agent – these can help in a variety of ways, from narrowing down your search to price negotiation and quality control.11




2


Maximising the strategic benefits

If you’re thinking of sourcing from Turkey, it might be worth considering how doing so can feed into any broader strategic plans for your business. For instance, a closer proximity to the market might not just mean faster deliveries – it could also enable you to become more nimble, responding to trends and market developments more quickly. Similarly, its location also gives you greater logistics options than in many other countries, with relatively fast shipments via road, rail and air all possible. This can increase your strategic options when attempting to balance cost and speed, as well as other elements such as sustainability credentials and carbon footprint calculations.




3


Remembering the essentials

Importing from Turkey may be easier than it is from many non-EU countries, but there are still some essentials to remember. As well as the A.TR document (and other documents for agricultural or coal and steel products), you also need a commercial invoice, goods description and an accurate valuation. For certain specific goods, there could be other documentation needed such as licences or a CITES certificate.12 And although most imports from Turkey are covered by free trade deals, it’s always worth checking the particular product you are importing to see if any tariffs or other legislation applies. If you are importing into the EU, you can visit the TARIC database and input the details of the specific product you are importing – although it’s worth noting that it doesn’t include details on national taxes such as VAT.



Disclaimer: The information provided on this page does not constitute legal, tax, finance, accounting, or trade advice, but is designed to provide general information relating to business and commerce. The FedEx Small Business Hub content, information, and services are not a substitute for obtaining the advice of a competent professional, for example (but not limited to) a licensed attorney, law firm, accountant, or financial adviser.

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