On 14 July 2026, the Verkhovna Rada of Ukraine ratified the Free Trade Agreement between the Government of Ukraine and the Government of the Republic of Türkiye (the "FTA"), originally signed on 3 February 2022. Türkiye completed its domestic ratification procedure on October 4, 2024, when Presidential Decision No. 9008 approving the FTA was published in the Official Gazette. Following the exchange of instruments of ratification, the Agreement will enter into force.
The FTA is considerably broader than a conventional tariff-reduction arrangement. It establishes rules covering trade in goods, services, commercial presence, electronic commerce, financial services, transport and logistics, telecommunications, competition, transparency and state-to-state dispute settlement.
Tariffs, Customs Treatment and Rules of Origin
The FTA introduces a product-specific framework for the reduction or elimination of customs duties on originating goods traded between Ukraine and Türkiye. Generally, import duties are eliminated upon the FTA’s entry into force unless the relevant tariff line is subject to a transitional period, partial reduction, tariff-rate quota or express exclusion under the Parties’ schedules in Annex I. Depending on the applicable tariff line, it provides for:
- immediate elimination of import duties for tariff lines not expressly subject to a special regime;
- phased elimination periods extending from three to eleven years for sensitive product categories;
- partial tariff reductions of between 8% and 75% for specified products, rather than complete duty elimination;
- phased partial reductions, including reductions of 20% or 40% over five years and 50% over two or five years;
- tariff-rate quotas granting full or partial duty relief only for imports within agreed annual volumes;
- continued exclusions for certain sensitive agricultural and industrial products; and
- elimination of charges having an effect equivalent to import duties upon the FTA’s entry into force.
Preferential tariff rates are generally calculated by reference to the MFN tariff applicable on 1 January 2012. Where a Party subsequently applies a lower MFN tariff, the lower rate prevails.
Agricultural market access remains more limited than market access for most industrial goods. The Parties’ schedules preserve exclusions, longer transition periods and tariff-rate quotas for sensitive agricultural products. Türkiye’s schedule, for example, provides duty-free quotas of 3,000 tonnes per year for certain live cattle, 500 tonnes per year for certain live lambs, and 2,000 tonnes per year for specified bovine meat products. Ukraine likewise retains exclusions or limited reductions for a number of meat and other sensitive agricultural tariff lines.
Tariff quotas must be administered through transparent, public, timely and non-discriminatory procedures. Eligible traders must be permitted to apply for available quota volumes, and quota administration must remain under the control of the relevant governmental authorities. Quotas for imports into Ukraine are allocated on a first-come, first-served basis.
The FTA also introduces specific commitments concerning Ukrainian export duties. Ukraine undertakes not to impose export duties on certain raw hides and skins, copper products, stainless steel in primary forms and specified non-ferrous metal waste, scrap and semi-finished products exported to Türkiye. In addition, Ukraine grants a duty-free annual export quota of 50,000 tonnes for sunflower seeds, allocated on a first-come, first-served basis.
Preferential tariff treatment is available only where products satisfy the applicable rules of origin under the Regional Convention on Pan-Euro-Mediterranean Preferential Rules of Origin (PEM Convention). Exporters should therefore ensure compliance with the relevant origin criteria and maintain appropriate supporting documentation before claiming preferential treatment. The Parties have also agreed to update the FTA to reflect the revised PEM rules following completion of their respective domestic procedures.
The FTA Opens Services Markets, but Only to the Extent Listed in the Schedules
The FTA incorporates the core GATS concepts of market access, national treatment and most-favoured-nation treatment. However, liberalisation is based on a positive-list model: a Party assumes commitments only for the sectors, subsectors and modes of supply listed in its specific schedule.
Türkiye expressly states that no commitment is undertaken for sectors or subsectors not included in its schedule. Licensing, qualification, technical-standard, local-presence and data-localisation requirements may also continue to apply where they do not constitute prohibited market-access or national-treatment limitations. The schedules do not create directly enforceable private rights.
Ukraine similarly preserves horizontal limitations, including restrictions on foreign ownership of agricultural land, limitations on access to state subsidies and requirements for work or temporary-residence permits for foreign service suppliers.
The FTA nevertheless establishes dedicated regulatory frameworks for:
- financial services, including banking, insurance, lending, payments, financial leasing, guarantees and trading in financial instruments;
- international road and maritime freight transport and supporting logistics services;
- telecommunications; and
- temporary movement of specified categories of service suppliers.
In telecommunications, suppliers with significant market power may be required to provide interconnection at technically feasible points on non-discriminatory, transparent and cost-oriented terms. Interconnection procedures and, where required by national law, reference offers must be publicly available.
Predictable Commercial Establishment and Digital Transactions
The chapter on commercial presence requires the Parties, where practicable, to reduce the number of authorities involved in an authorisation process, accept electronic applications on the same authenticity basis as paper applications and accept certified copies instead of originals. Competent authorities should provide indicative processing periods and assess the completeness of applications without unjustified delay.
For electronic commerce, neither Party should deny the legal validity of a signature solely because it is electronic. Businesses must generally be allowed to agree on the authentication method used for their transaction and to demonstrate before a court or administrative authority that the transaction satisfies applicable authentication requirements. A Party may still prescribe a certified or specified method for particular categories of transactions.
These provisions do not create automatic mutual recognition of all electronic signatures, licences or professional qualifications, but they establish a legal basis for more digital and less document-intensive cross-border procedures.
Binding State-to-State Enforcement
The FTA establishes consultations followed by a three-member arbitration process. Panel decisions are final and binding on the Parties. For urgent cases, including disputes involving perishable goods, the panel must seek to issue an interim report within 60 days and a final report within 120 days.
If the losing Party does not comply, the Parties must first seek mutually acceptable compensation. If no agreement is reached within 20 days, the complaining Party may suspend equivalent benefits under the FTA. Notice of the proposed suspension must generally be provided at least 30 days in advance, and a challenge to the level of suspension must be decided within 45 days.
This is a state-to-state mechanism: the FTA does not grant private companies a direct right to bring claims against Ukraine or Türkiye.
Takeaway
Businesses trading between Ukraine and Türkiye should not rely on general statements that the FTA “removes tariffs.” Before applying a preference, they should identify the exact HS code, verify the relevant national tariff schedule, determine whether the product is subject to immediate elimination, a transition category, a quota or an exclusion, and confirm compliance with the PEM rules of origin.
Existing supply, distribution and manufacturing agreements should also be reviewed to allocate responsibility for origin evidence, quota availability, tariff classification, customs audits and loss of preferential treatment. For service providers, the relevant sectoral schedule and applicable mode of supply must be checked before assuming that market access or national treatment is guaranteed.
The FTA creates meaningful opportunities, particularly for integrated manufacturing, agricultural exports, logistics, telecommunications and digitally delivered services. However, its benefits are product- and sector-specific and will depend heavily on careful customs and regulatory implementation.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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