On July 14 the Ukrainian parliament ratified the free trade agreement with Turkey.
The sides have been negotiating the agreement since 2007. Balancing Ukraine’s interest in gaining access to Turkey’s heavily protected agricultural market with Turkey’s push to export more industrial goods to Ukraine was the central challenge. Heightened competition was what producers in sensitive sectors on both sides feared.
According to the agreement, Turkey will immediately eliminate tariffs on 93.4 percent of Ukrainian industrial goods and 7.6 percent of agricultural products. It will also remove tariffs on an additional 1.5 percent and 28.5 percent, respectively, over the next three to seven years.
From its side, Ukraine will lift tariffs on 56 percent of Turkish industrial goods and 11.5 percent of agricultural products. Then, tariffs on an additional 43.2 percent and 53.7 percent over transition periods of up to five years for industry and ten years for agriculture will be phased out.
In general, the main goal of the free trade agreement is to expand bilateral commerce toward the $10 billion target. The Ukrainian Ministry of Economy reports that bilateral trade reached $8 billion in 2025. Ukrainian exports totaling $2.7 billion makes Turkey Ukraine’s third-largest trading partner and second-largest export market. Though Ukraine has traditionally maintained a trade surplus with Turkey, Ukrainian exports have declined. Meanwhile, imports of Turkish machinery, vehicles, fuel, equipment, and construction materials increased.
Now, approximately 77 percent of Ukrainian exports to Turkey account for grain and sunflower oil. Turkish companies process much of this production into higher-value products, such as flour and consumer foods. Then, they sell it domestically or re-export to third markets. As a result, Turkey generates much of the added value rather than Ukraine.
The new framework improves access for processed foods, feed concentrates, and
more deeply processed oil products, while many Ukrainian commodities already enter Turkey at low or zero rates.
However, high competitiveness of Turkish textile, machinery, fruit, and vegetable producers makes their Ukrainian counterparts face high energy costs, and labor shortages. The agreement’s formal scope doesn’t include defense cooperation, but the agreement’s ratification means mutual trust. A more predictable environment for investment, component supply chains, joint production, and access to third-country markets also appears.
As Ankara has also indicated, it is ready to contribute to future security guarantees for Ukraine as its maritime component alongside NATO allies.
However, Ukrainian and Turkish interests don’t always coincide. From its side, Kyiv expects partners to increase economic pressure on Russia. Meanwhile, Ankara, tries to avoid further military escalation in the Black Sea. In case of proper implementation, the ratification of the free trade agreement marks yet another step in bringing Kyiv and Ankara closer together.
NH Logistics UKR has been offering IOR Importer of Record and EOR Exporter of Record services since 2001 and is a market leader in Ukraine and Eurasia, supporting many clients with their import/export shipments.
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