As Turkey is in a customs union with the EU, it must adapt its tariffs and tariffs to the DerEU. However, the free trade agreements (FAs) signed by the EU do not apply to Turkey, so EU FREI agreements can be exported duty-free to Turkey while maintaining tariffs on Turkish products, unless they conclude a separate free trade agreement with Turkey. During the negotiations on the Transatlantic Trade and Investment Partnership (TTIP), Turkey raised the prospect of an exit from the customs union due to the economic contraction it would suffer, given that US products would arrive in Turkey duty-free and Turkish products would continue to be subject to US tariffs. The EU and Turkey are in talks to amend the customs union agreement to add Turkey to the EU`s current and future free trade agreements.   Turkey is a member of the Euro-Mediterranean Partnership (Euromed) and should therefore conclude free trade agreements with all other Mediterranean partners in order to create a Euro-Mediterranean free trade area. The trade regime for coal and steel products stems from an agreement reached on 25.07.1996 between Turkey and the ECSC that was still in force at the time (JO L 255 of 16.12.1996, p. 1). JO L 227, 7.09.1996). These products are now covered by the EC Treaty, but remain outside the scope of the customs union. The rules of origin are established in Protocol 1, as amended by Decision 2/99 of the CECA-Turkey Joint Committee (OJ L 199 of 21.12.1999, p. 1). (12.08.1999).
In the end, preventing trade disruptions with Turkey is just another reason why the UK should prioritise a trade agreement with the EU before the end of the year. But even if the UK and Turkey manage to reach a free trade agreement, the future of their relations will depend on broader political developments, including the health of Turkey`s relations with the EU and the US. For example, if the EU imposes additional sanctions on Turkey before the end of the transition period, the UK will also have to apply them in accordance with the terms of the withdrawal agreement. In December 2016, the Commission proposed modernising the customs union and extending bilateral trade relations to areas such as services, public procurement and sustainable development. The Commission`s proposal was based on extensive preparatory work during 2016, including a public consultation with stakeholders, a detailed impact assessment and a study by an external consultant. However, the Council has not yet adopted the mandate. In 1996, a free trade area was established between Turkey and the European Union for the products of the European Coal and Steel Community. The 1/98 decision of the Association Council concerns the exchange of agricultural products. But a trade deal is not easy.
Turkey`s economic relations with the UK depend on the future agreement between the EU and the UK. The UK`s exit from the EU customs union makes a major transformation of trade between the UK and Turkey inevitable. Turkey is in a partial customs union with the EU, which includes industrial products and some processed food products (the agricultural trade is the subject of a separate agreement which the UK and Turkey must also replicate). Goods covered by the customs union can be sold to the EU duty- and quota-free, without exporters has to worry about costly rules of origin. This is because Turkey must apply the same tariffs (or at least no less) as the EU to products imported from other countries.