How Will Turkey-EU Trade Relations Change after the Ukraine-Russia War?

The Ukraine-Russia war continues to threaten international trade and global supply chains. This paper aims to compare Ukraine-EU and EU-Turkey trade relations in order to find out whether Turkey’s exports can replace Ukrainian products in the EU market during or after the conflict, and whether this will have also a positive impact on the modernization efforts of the EU-Turkey Customs Union (CU) Agreement. For this purpose, we analyzed Turkey-EU and EU-Ukraine trade figures between 2017 and 2021 using TradeMap and UN ComTrade data. To date, there are no major studies concentrated on how Turkish trade relations with the EU may change if Ukraine would not be able to supply to the EU market for a long time due to the war, leaving certain gaps requiring further attention. For our analysis, we firstly checked top 100 export products of Turkey and Ukraine to the EU in 2021. We determined the shares of Turkish and Ukrainian products in EU 27’s imports and took into account of the products whose shares have been more than 1 percent in the EU’s imports from the world. Our findings show that Turkish exports might replace Ukrainian exports targeting EU particularly in five main product groups. We identified that Turkish-origin two iron and steel (Harmonized Tariff Schedules (HTS) 7208, 7209), one agriculture (HTS 0802), and two electrical machinery and equipment (HTS 8544 and 8516) have the advantage in the EU market to gain some of Ukrainian market share, while the competition will be severe with other suppliers like China. According to our analysis, the war could have triggered the pace of the CU agreement renovation works to speed up if the EU would depend more on Turkish goods (especially agricultural, textiles, machinery and selected iron and steel products) to replace Ukrainian products in EU markets while EU would feel the need to turn to Turkish items to meet the domestic demand. Our study reveals that this appears not likely in the current situation.