The meeting agenda included a road map to bilateral
relations of the two nations in the near future. One of the most important
items on the agenda is a free trade agreement that Ukraine and Turkey have been
quietly discussing for two years. Both sides will deepen economic ties if they
reach an agreement on the details.
It would be a fitting accomplishment to a neighborly
relationship that has been good from the start – ever since Turkey became one
of the first nations to recognize Ukraine’s independence and open a diplomatic
mission in Ukraine. The relationship has improved since then.
Turkish investments in Ukraine has nearly reached $2
billion. The National Bank of Ukraine says that roughly 700 companies of
Turkish origin are active in Ukraine’s economy. The major shareholder of LIFE,
the third largest telecoms partner in Ukraine, is TURKCELL, the biggest mobile
telecoms operator of Turkey. Besides two Turkish banks, some of the other
Turkish holdings include have production and marketing businesses.
Turkish contractors have already finished construction
of Kyiv Boryspil International Airport, Shaktar’s Donetsk Stadium, hundreds of
kilometers of intercity roads, bridges and some five-star hotels. The value of
these projects exceeds $2 billion and the volume of ongoing projects is around $1
billion
In 2011, Ukraine and Turkey started the Strategic
Collaboration Council of Turkey and Ukraine in which Erdogan and Yanukovych are
co-chairmen.
The first decision of the council was the repeal of the
requirement for bilateral visas in August 2012. This is partly recognition that
Ukrainians prefer Turkey as a holiday destination. In 2012, 634,000 Ukrainian
travelers visited Turkey and in the first seven months of 2013, the number of
Ukrainian tourists increased 20 percent over the same period a year ago. As for
Turkish tourists, there is a 55 percent boost in the number of Turkish tourists
to Ukraine – to 117,000 in 2012.
The Crimean peninsula and western Ukraine have considerable
potential for tourism and Turkish tourists who are bored to visit known
European cities and may prefer these Ukrainian destinations if some necessary
infrastructure and service improvements are made.
Turkish Airlines, Ukraine International Airlines and
other private airline operators are helping to intensive the economic
activities between two countries. As Kyiv is the busiest destination, Turkish
Airlines also has scheduled flights to Odessa, Kharkiv, Lviv, Dnepropetrovsk,
Donetsk and Simferopol.
Their plans will
increase the number of intra-Ukraine flights from the current 80 flights every week to more than 100 flights. Turkish Airlines and several other Turkish airline
operators have been waiting for further permission to increase the frequency of
their flight schedules and destinations in Ukraine. Turkish airlines can help
Ukrainians access other destinations more easily as well.
Before the worldwide economic crisis in 2008, Turkey
was Ukraine’s second biggest foreign trade partner, just after Russia. The
crisis cut Ukrainian-Turkish trade in half and it has never fully recovered.
Turkey has dropped to number four as Germany and Poland have risen. Ukraine has a foreign trade surplus
with Turkey. Turkey buys raw materials and semi-finished goods while Ukraine
buys finished end-user products.
What will a free
trade agreement mean for the nations? It will likely intensify trade
opportunities through traffic reductions, helping both nations to reach their
leaders goal for $20 billion in bilateral trade each year. The benefits for
Ukraine will be even more profound if its leaders are able to secure a free
trade agreement with the European Union in Lithuania next month. Turkey has
been a free trade partner with the EU since 1994.
A trade deal
between Ukraine and Turkey will stimulate Turkish investors, who are keen to
enter the market. Yanukovych is leading his nation at a critical moment, when
he can help ensure its prosperity for years to come by opening up markets with
the EU and Turkey.
I am sure that
he will take the right course. Since becoming president in 2010, Yanukovych has
worked hard to improve economic relations not only with Turkey and the EU, but
also Russia, China, South Korea as well as countries in the Middle East and
Latin America.
These efforts,
combined with the abolishment of visas between Turkey and Ukraine, gives me
great hope for new opportunities to improve economic prosperity and increased
personal ties between the two nations.
Burak Pehlivan is the vice president of the Turkish Ukrainian
Businessmen Association.
