EU will long remain Turkey's main export market

Outlook

Facilitated by the Customs Union, Turkish exports to the EU may continue the upward trajectory that has typified most years since 2009. Exports to the Middle East have grown more rapidly, but have lately shrunk, much depending on the politico-economic situation. Iraq will be key, rising from Turkey's eighth-largest export market in 2006 to second in 2011-14, but dropping to third behind the United Kingdom in 2015.

Ankara will want favourable trading relations with the United Kingdom to continue post-Brexit; Turkey exported goods worth 10.6 billion dollars in 2015, and imported 5.5 billion. It will seek to build on surpluses with the Middle East, North Africa and sub-Saharan Africa.

Impacts

• Turkey's interest in the large and wealthy EU market will focus on upgrading the Customs Union, even as its membership bid stagnates.
• This fundamental economic interest will temper the political difficulties Turkey has with the EU.
• Turkey's EU market is recovering; in January-August, exports there rose by 9.3% year-on-year, but fell to almost every other country group.
• The small but rising trade surplus in sub-Saharan Africa will encourage further Turkish diplomatic interest in the region.
• Regional trade surpluses will be the more important, as Turkey's exports have only covered imports by around 60-72% over the past ten years.