University of Gujrat

Main Campus, Hafiz Hayat

International Trade of Turkey

Submitted by:
Arooj Gozil Gull (25036720-021)
Department of Management sciences
Program – MBA (2 Year)

Supervisor:
DR. Nasir Sultan

Semester:
[Semester 2nd & Fall 2025]

Date of Submission:
Date – 29, Dec 2025
 Table of Contents
1. Introduction
1.1 Brief Introduction of the Turkey
1.2 Culture of the Turkey
1.3. Famous Foods
1.4 Tourism of the Turkey

2. Economic Overview of Turkey

2.1 Current Economic Condition

2.2 Law and Order Situation
2.3 Major Economic Indicators
2.4 Natural Resources
2.5 Top 10 Import Products of Turkey
2.6 Top 10 Export Products of Turkey
2.7 Top 10 Import Partners of Turkey
2.8 Top 10 Export Partners of Turkey

3. Turkey Relations With Pakistan

3.1 Political and Diplomatic Relationship
3.2 Economic Agreements With Pakistan
3.3 Most Favored Nation (MFN) Status
3.4 Tariff Relaxations
3.5 Trade Between Pakistan and the Country

4. Analysis
4.1 Strength of Trade Relationship
4.2. Suggestions to Improve Trade

5. Conclusion
Recommendations for Improving Trade and Economic Cooperation with Pakistan

6. References
1. Introduction
1.1 Brief Introduction of the Country

Turkey is a trans-continental nation, which primarily belongs to Western Asia and slightly to
South East Europe. It is surrounded by Greece and Bulgaria in northwest, Georgia in
northeast, Armenia, Azerbaijan and Iran in east and Iraq and Syria in south respectively. It is
bounded by Black Sea, Aegean Sea and Mediterranean Sea. The population of Turkey is
more than 85 million, with the major component that is located of Turks and Kurdish and that
includes other minorities. Huge cities like Istanbul, Ankara, and Izmir are in possession of a
big portion of the population.

The climate of Turkey is different. The Mediterranean and the Aegean coasts have hot dry
summers and mild winters whereas the black sea region has year round rain. The climate in
Central Anatolia is of continental type with chilly winters and hot summers. The size of the
country measures approximately 783, 000 square kilometers, comprising of mountain ranges,
plateaus and plains, as well as the coastal territories.

Turkey is politically a republic with a presidential system and the president has a great
executive power. The legislature is the Grand National Assembly. The political system in the
country has been formed with the passage of time through the reforms. The country is known
to have long had various ancient civilizations within its history and to have served as the
centre of the Byzantine and the Ottoman Empires. In 1923, Mustafa Kemal Atatürk founded
modern Turkey through his reforms, which built modern Turkey into a modern nation-state.

1.2 Culture of the Country

The culture in Turkey is a mixture of East and western cultures and it has been influenced
with its long history and varied population. The official language is Turkish, and the other
minority languages, such as Kurdish and Arabic, are spoken in the regions. The culture is
based on hospitality, the respect of elders and the close ties with the community. The suitable
traditions are religious celebrations, weddings, and national celebrations, and it is a usual
symbol of invitation to offer tea or Turkish coffee. Modern clothes in Turkey are largely
Western but anyone can still come across the sale of traditional dresses like schalvar, sewn
dresses and headscarves in rural and cultural festivity.

Turkey is a strong country where culture plays a great role in business, tourism and
international relations. Trust, personal relationships, respectful communication and meeting
business in the form of a small talk and a cup of tea are crucial elements of business. Turkey
has a rich cultural background, historical sites, cuisine, and hospitability which is a great
attraction of tourism to millions of people every year. Globally there are distinct cultural
intertwine and fusion of European and Middle Eastern culture that aids Turkey to be a
mediator between countries, creating the influence of diplomacy and cultural exchange and
international relations.
1.3. Famous Foods
The most important aspect of the Turkish culture is its cuisine, which is distinguished by the
delicious cuisine: kebabs, döner, bokrak, pilav, and dessert items like baklava and Turkish
delight. The meals are an amalgamation of Middle Eastern, Mediterranean, and Central Asian
cuisines.

Each area has got its own specialties, with the southeast presenting spicy kebabs, Aegean
region offerings including olive-oil and seafood, central Anatolia offering mantui and
gözleme, the Black Sea being hamsi and corn-meal based respectively. The cultural diversity
in the country is brought out through these regional flavors.

The Turkish food contributes significantly towards the attraction of tourists. Traditional
meals, street foods, and elaborate hospitality are among the favorite activities that tourists
indulge in, and hence cuisine especially is an important pillar of the tourism experience and a
significant aspect of Turkish culture.

1.4 Tourism of the Country

Major Tourist Destinations of Turkey

1. Istanbul – Famous for Hagia Sophia, Blue Mosque, Topkapi Palace, Grand Bazaar, and
Bosphorus cruises.
2. Cappadocia – Known for its fairy chimneys, cave hotels, and hot-air balloon rides.
3. Antalya – Popular for beaches, luxury resorts, old town Kaleiçi, and ancient ruins.
4. Pamukkale – Famous for white travertine terraces and the ancient city of Hierapolis.
5. Izmir & Ephesus – Known for ancient ruins, especially the Temple of Artemis and the
Library of Celsus.
6. Bodrum – An upscale beachy city with nightlife and Bodrum Castle.
7. Ankara – The capital city, featuring Atatürk’s Mausoleum (Anıtkabir) and modern
museums.
8. Trabzon & Uzungöl – Northern region with green mountains, lakes, and the Sumela
Monastery.
9. Konya – Famous for the Mevlana Museum and Whirling Dervishes.
10. Fethiye & Ölüdeniz – Beautiful beaches, paragliding off Babada AG mountain and
stunning blue lagoon.

Turkey is culturally a rich country with numerous forms of traditions and celebrations during
the year. Other significant festivals are the Ramazan Bayrami and Kurban Bayrami religious
festivals; the Mevlana Festival in Konya, International Istanbul Film Festival and local folk
festivals that have music, dance and traditional crafts. These activities are indicative of the
historical and cultural background of Turkey.

The country heavily relies on tourism and several millions of tourists come every year.
Turkey has attracted more than 40-50million tourists every year in the recent years and thus
is ranked as one of the top places to visit in the world. Such a high number of visitors has a
positive impact on the economy of the country.
Turkey has some UNESCO world heritage sites as well, which receive foreign tourists. Such
renowned ones are Hagia Sophia, Goreme National Park in Cappadocia, Hierapolis-
Pamukkale, Ephesus, Troy, Safranbolu, and Mount Nemrut. These archaeological and natural
locations show the cultural diversity and international significance of the country.

2. Economic Overview
2.1 Current Economic Condition
The economy of Recent Performance Turkey has demonstrated impressive resiliency and the
development of the quarterly GDP increased to 4.8 per cent by the year-end in the second
quarter of 2025. High interest rates (currently at approximately 3950 percent) and fiscal
tightening to reduce inflation led to an uncharacteristically slow growth in the past two years,
of 5.1 percent in 2023 and 3.2 percent in 2024 (a full-year growth). It has nominal GDP per
capita of approximately 18,200 which is equivalent to an upper-middle-income country. The
economic confidence also increased slightly in November 2025 to 99.5 which is a sign of
cautious optimism.

Growth Trends Since the 2018-2022 currency crisis and 2023 earthquakes, the economy has
since gotten back on track with USD-nominalised GDP reaching all-time highs in 2023-2024.
It is becoming a services dominated economy (58% of GDP) which is pushed by exports and
domestic demand. Predictions of 2025–2029 are 3-3.8 average per annum, and carry-over
effects of 2025 H1 performance may cause the outcomes of 2025 to be near the upper some
(3.5 -4%).

Turkey's diversified industrial base provides solid foundations:

 Manufacturing (22% GDP) — Automobile (13th-largest producer in world, Togg

EV introduction), military (Aselsan, TAI; exports increasing at an alarming rate),
consumer goods/electronics, textiles (5th-largest producer in world), steel (8th in the
world).
 Tourism (~12% GDP) — Record 55+ million visitors in recent years; Istanbul,
Antalya, and cultural sites drive billions in revenue.
 Construction and Infrastructure — Ongoing mega-projects (canals, bridges) and
earthquake rebuilding sustain activity.
 Agriculture — World leader in hazelnuts, apricots, cherries; significant exporter
despite climate challenges.
 Emerging Strengths — Renewables, technology (1600+ R&D centers), and
defense/tech (Economic Complexity Index is improving).

Banking sector is still sound (more so the private banks), which facilitates credit access after
the tightening process is discontinued.
2.2 Law and Order Situation

Political stability stands at 2025 is still diversified with an average index of -0.07 on the
category of -2.5 to 2.5, with the vulnerable regions as sub-Saharan Africa and Middle East,
and the stable regions as Europe and small islands such as Liechtenstein, the highest ranker.
According to Global Peace Index, the states that have become less peaceful are some of the
cases where people have become militarized and others, which have had their share of social
problems such as the Cayman Islands, Liechtenstein, Andorra and Singapore.

Crime and security forecasts, 2025 indicate that there will be reduced violent crimes and this
is more evident in the US as in the major cities, the FBI data points out that the assaults and
murders will decrease by 10-21% as compared to the ones reported in 2024, demonstrating a
8.2% and charged overall violent crime decrease. Internationally, there are still problems in
cyber threats and organized crime cases, which are followed by such organizations as the
UNODC.

According to the description of the Global Risks Report provided by the World Economic
Forum, business safety in 2025 revolves around cyberspace threats as the main threat, as well
as supply chain without functioning, and natural disasters. The trends present in workplaces
focus on AI, wearables, mental health, remote protections, and sustainability, with changes in
the legislation and talent shortages. The rating of LGBTQ+ business climates affects the US
states, as it has impact on safety and appeal.

Low-crime, peaceful destinations such as Iceland, Andorra, UAE, Qatar, and Singapore are
rated in the top list of the 2025 tourism safety according to the resident ratings and indices,
and Europe and Asia set the trends, with the US following in different areas. The advisories
by the US State Department and risk maps are some recommendations that need to be
followed by travelers.

2.3 Major Economic Indicators

GDP

The growth in gross domestic product (GDP) of the world is expected to be moderate in 2025
amid the increased trade barriers, policy uncertainty, and declining labor markets, with the
estimates likely to represent between 2.9 and 3.2 year-on-year. Advanced economies will
grow about 1.5 percent and emerging market economies and developing economies increase
slightly above 4 percent realizing front loading of exports before tariffs and fiscal expansions
in key countries such as China where the growth slows to 4.9. The euro zone is projected to
grow at 1.2 percent against geopolitical threats with it being supported by government
spending but burdened, and the U.S. is expected to be 1.8 percent because of the effects of
tariffs. Some of the risks are Lean along downwards, such as additional trade frictions
andLikewise, long-term inflation, yet improvement of AI can result in increases.

GNP / GNDP

Gross national product (GNP), which is since significantly replaced by gross national income
(GNI) in international statistics, is the sum total of income received by the residents of a
country, including expatriates, and so equals GDP plus net factor income abroad minus
expenditure on foreigners. Global GNI is more of a reflection of GDP, with 2025 outlooks
converging at around 110-115 trillion in constant U.S. repayment with such growth agents as
trade relations and investment. The GNI at purchasing power parity (PPP) or net of
depreciation is known as a GNDP, which adjusts purchasing power parity differences in the
cost of living; the Gni per capita PPP at purchasing power parity, worldwide, is
approximately 18,000 to 20,000 with high-income countries such as Luxembourg with
120,000 and low-income countries such as 2,000. Close-economy countries have little, open
ones such as the U.S., wherein foreign income contributes between 1- 2% to totals.

Internal Debt

In 2025, an increase of 94.7 percent of GDP is the highest level, and the level of global public
(international) debt is of 111 trillion, increased by 8.3 trillion compared to 2024 by high costs
in the market, slow growth and increased defense/climate expenditure. Developed economies
have most of them, with the U. S. at 38 trillion (125% of GDP) and Japan above 250 and
emerging markets contain maturities of sovereign bonds in 2026 that make fiscal burdens
worse. In nations that harbor 3.4 billion inhabitants such as education or health expenditures
now overtake interest payments whose issuances by OECD have reached a record high of 17
trillion. Without fiscal reforms, projections indicate a nearing of 100% of GDP by the end of
the decade due to the risks on policy uncertainty.

External Debt

External debt: This category consists of total public debt that consists of obligation to non-
residents (around 30-40 trillion globally by 2025) - in developing economies it totaled $102
trillion overall in 2024 (and was due to rise further with high costs of servicing their debts of
a total yearly 921 billion or so). Asia and Oceania are 24% of world public debt, 5% Latin
America, 2% Africa, and in 2023, so far developing countries sent the net menu of 25 billion
more than the receipts to creditors, which causes stress in the budgets. Sixty-one countries are
also distributing 10% or even more of revenues on interest as compared to health/education
expenditure and subject to decreased FX value and trade tension.

Inflation

The global headline inflation is expected to decrease to 4.2 to 5.8% in 2025 on the basis of
declining energy/food prices and monetary tightening, though, the tariffs and the wage
pressures are threats on the upside. In high economies, core rates are at 2.5-3.4 percent, with
the U.S. target of 2 percent at 3.2 percent; emerging markets are at 5.3 percent, with the
highest rates as 25.8 percent in the sub-Saharan Africa due to the FX woes. Trade barriers
made OECD revise its projections in an upward direction, and disinflation became stagnant in
certain regions because of continuing services inflation. The gradual rate cuts would be
looked into by central banks in case of anchors, but geopolitical shocks might re-immerge.

Unemployment

In the world, the unemployment rate remains reliably steady at a historic low of 4.9%-5.0%
in 2025, according to ILO and oECD forecasts, with 34-35 million determining joblessness in
the environment of strong but slowering labor markets. The under twenty-five rates are still
high in terms of 11.2%-12.6% with the best results in the upper-middle-income nations
(16%), and an increase to be seen in the U.S. (to 4.3%) and a downward trend in
Greece/Norway. Gender inequality remains steady, females at 5.1% compared to men at 4.8
low-income regions have lower formal figures (8%), but large underemployment. The
slowdown in economies inhibits the growth of employment, and there is trade uncertainty
risks.

Currency Condition

In 2025, the Fed will cut rates, uncertainty on tariffs, and divergent policies are likely to
make major currencies volatile, and the USD will suffer 10.7 year-to-date decline against a
basket due to recession worries. EUR/USD also shot up 12 percent to 1.09-1.20 on ECB
stability and Eurozone fiscal stimulus, GBP/USD gained more than 10 percent to 1.36-1.39
on UK trade bargaining and inflation stuck high in the way of BoE easing. BOJ increased
interest through raising and the strength of the yen, with USD/JPY falling to 139-150,
whereas still it does not do well compared to safe-havens such as CHF. The EUR/GBP and
other cross-pairs such as GBP/JPY are also unpredictable above 200 in that projections have
shown that disinflation will be favorable to the Euro.

2.4 Natural Resources

Minerals

Turkey is a country with large mineral reserves comprising of the largest boron reserves in
the world along with chromium, gold, and 37 other important minerals with an unknown
amount valuing at $3.5 trillion that have the potential to subsidize their trade deficit of over
60 billion through exports and processing. It is predicted that 47.81 billion kg of production
will occur in 2025 with a growth of 1.97 percent and will pull in more than 6,000 investors
and support electronics, renewable, and manufacturing industries with sustainable projects
such as the US-Turkey rare earths partnership.
Oil
In early 2025, Turkey increased its oil production to 132,000 barrels/day and new discoveries
saw an investment of $4 billion of reserves which produced an annual value of 2billion,
satisfying 7% of demand at check against 40billion energy imports. It supplies 28.9% of the
transport and industry energy demand with oil derived electricity of 2025 GWh (1.44 billion
kWh, 5.67 growth) and 153 new wells will be developed in 2020 to boost security and
development.

Gas
In Turkey, natural gas constitutes 26.6 percent of energy, and the year 2024 is projected to
produce 2,250 million m 3 (4 percent of market), but in 2025, Sakarya field has increased the
output to 9.5 million M 3/day and has raised power increment by 52 percent and GDP by 2.6
percent. Although there were imports of 40 billion, and a 1 billion subsidies loss,
diversification (36% by 2028) supports the industry and hub status.

Forests
The growing forests in Turkey (4 th in the world) contribute to the bioeconomy, carbon
storage and rural employment and the ecotourism sector brings in 2 billion Turkish Liras
annually. A 6.5% GDP integrated with agriculture helps in the growing resilience through a
project supported by the World Bank in the value of $400 million, in support of net-zero goal
production and sustainability.

Agriculture
Founded on mechanization GDP ratio thus falling to 5.6% of total, but with GDP increasing
to over $1.4 trillion in the future, 2025 support prioritizes 60% to agriculture in the 9 th-
largest producer, with 20% of agriculture jobs present focus on wheat/climate adaptation that
yields an export/value of 7.6 billion and directly impacts GDP.

Fisheries
Fischeries in Turkey contribute to 1 + million ton/year and aquaculture (800% growth) has a
worth of 1.7 billion Euro, expanding to drive 8.26 billion seafood revenue (9.99% growth)
and 0.32-0.42% to GDP. Exports, employment, and food security are increased through
subsidies (43-100%), and sustainability.

Hydropower
Hydropower makes one-third of energy and 22 percent of electricity, with potential of 433
GW (125 GW viable) and would push renewables to a 47.8 percent contribution to electricity
in 2025. The global growth provides 154 GW in 2030, which can provide employment,
reduced imports, net-zero, and industry through dams (83.5 million/year) and innovations.

Major Trading Partners

As an exporter, Turkey plans to have Germany (with the largest bilateral trade at over $47
billion), the United States, the United Kingdom, Iraq, and Italy as the top export destinations
in 2025, with 41.5% of its total export volume going to every country in the European Union.
In imports, Russia (Best supplier in early 2025), China, and Germany will be the key partners
because of their energy and manufacturing requirements, making Turkey the second-largest
partner of Russia.

Contribution of Trade to the Economy

Trade also greatly enriches the economy of Turkey with exports and imports making the trade
to GDP ratio estimated to be about 66-81 basing on the current trends but services trade
constituted 12.73 of GDP in 2024. The fact that exports alone are some 27 percent of GDP in
2025, in a GDP of about 1.44 trillion, is due to the fact that, during diversification and
resiliency in external trade, exports contribute 2.3 percent to 3.3 percent economic growth.

2.6 Top 10 Import Products

1. Mineral Fuels Including Oil ($65.6 billion, 19.1% of total imports in 2024): This
category mainly incorporates refined petroleum and petroleum gas which are needed
by Turkey to meet its energy requirements in transportation, energy generation, and
industrial usage since domestic production only produce a small portion of what is
consumed by Turkey as a result, it depends heavily on international supplies,
especially Russia and other exporters.
2. Machinery Including Computers (39.6 billion, 11.5%): This category covers
industrial equipment, boilers and computers that are utilized in the manufacturing and
technology sector and apply to the export-oriented industries of Turkey such as
automobile and textile industries, which require cutting-edge machinery.
3. Vehicles ($31.7billion, 9.2 percent): Cars, delivery trucks, and parts, are principally
imported to satisfy the local market and assemble cars to export, enhancing the
automotive industry, a major sector of the economy.
4. Electrical Machinery and Equipment ($27.2 billion, 7.9%): This covers
electronics, wiring and appliances, which will serve as an ingredient in consumer
goods, infrastructure and high-tech manufacturing (as Turkey becomes part of global
supply chains).
5. Gems and Precious Metals (24.9 billion, 7.2): Majorly comprised of gold and
jewelry material, they were utilized in Finance, jewelry manufacturing, and
investment purposes, however, imported items decreased by 26.7 percent between
2023 and 2030 because of the market conditions.
6. Iron and Steel ($23.7 billion, 6.9%): Construction, automotive and manufacturing
Scrap iron, steel products, and alloys to support the development of infrastructure and
export industries in the face of domestic shortages.
7. Plastics and Plastic Articles: Raw Plastics and manufactured products used as
packaging, automotive and consumer goods, all necessary to the irregular Turkish
industrial base (15.6 billion, 4.5%).
8. Organic Chemicals ($9.5 billion, 2.7%): Chemical type of compounds used in
pharmaceutical manufacturing, dye manufacture and plastics manufacturing, which
increase by 3 percent through the years 2023 and thereafter supports chemical
industries and medical industries.
9. Optical, Technical and Medical Apparatus & Equipment, ($6.8 billion, 2%):
healthcare, laboratory, and optical equipment, increasing 5.2% year over year, are
essential to the growing medical industry and exports of Turkey.
 10. Aluminum ($6.1 billion, 1.8%): Building and packaging leather and xenophilia
aluminum, and transportation material, which serves to boost industrial development
and infrastructure development.

2.7 Top 10 Export Products

1. Mineral Fuels ($22.7 billion, 8.7 percent of total exports in 2024): Mainly refined
petroleum oils, which assist in meeting the energy demands of the world and act as an
opportunity to Turkey to depend less on imports and much more on exports to Europe
and Asia.
2. Vehicles-22.2-billion, 8.5%: Cars and trucks, many of them produced in Turkey,
which is a large car manufacturing region (Ford and Toyota) car exporters,
employment is a key driver of industrialization, primarily to the EU market.
3. Machinery, including computers ($20.8 billion, 8%): refers to industrial machinery
and boilers that are needed by the manufacturing industries around the world which
boosts Turkey as a global supplier.
4. Iron and Steel ($17.1 billion, 6.5%): Unfinished and finished steel products to the
construction and automotive sectors, Turkey ranks among the leading world
producers of these products, which are also used in export of infrastructure.
5. Electrical Machinery and Equipment (12 billion, 4.6): ELECTRICS, wiring, and
appliances, which assist the tech and consumer goods industries, increasing as a result
of Europe.
6. Gems and Precious Metals ($11.8 billion, 4.5%): Gold and jewelry, which can be
invested or used as a luxury in the market, and the craftsmanship in Turkey value-
added to it by processing and designing.
7. Plastics and Plastic Articles ($9.9 billion, 3.8%): Plastic materials and packaging
materials and automotive used in various industries, which showed inexpensive
production.
8. Clothing and Accessories (Not Knit or Crochet) ($9.7 billion, 3.7): Ready made
clothes, a classic strength, make use of millions of workers, and ship fast fashion to
Europe.
9. Knit or Crochet Clothing and Accessories ($8.9 billion, 3.4%): This is knitted
clothing (complement to the textile industry) and exports are based on the trends of
quality and sustainability.
10. Articles of Iron or Steel ($7.8 billion, 3%): Manufactures metal products to be used
in construction and machinery that underpin the construction of the infrastructure
across the world.

2.8 Top 10 Import Partners

1. Russia ($45.59 billion, 12.6% of total imports in 2025): Majority of its imports are
mineral fuels, oils and natural gas which are important in ensuring energy security in
Turkey amidst domestic shortages as well as geopolitical influences.
2. China ($44.98 billion, 12.4%): Equipment, electronics, and consumer goods are
included in the category, and they benefit the manufacturing and technology
industries of Turkey via affordable supply chains.
3. Germany ($28.68 billion, 7.9%): Vehicles, machinery, and chemicals, which
improve industrial potentials through quality inputs of one of the key partners of the
EU.
 4. Areas, NES (Not Elsewhere Specified) ($24.57 billion, 6.8%): Sometimes contains
such special items as unallocated goods or confidential trade, which may encompass
precious metals or various other unspecified items.
5. Switzerland ($19.91 billion, 5.5%): Consuming the majority of the gold and
precious metals imports, utilized as financial reserves and in jewellery industry, are
indicative of safe-haven imports.
6. United States ($15.77 billion, 4.4%): Airplanes, equipment, and farm produce,
enhancing the defense, technology, and nutrition groups due to the worthy bilateral
commerce.
7. Italy ($14.99 billion, 4.1%): Machinery, vehicles, and textiles, serving the industries
of automobile and fashion with European quality parts.
8. France Aircraft, chemicals, or vehicles: It supports aviation and pharmaceutical
industries through already established trade connections (11.54 billion, 3.2%).
9. United Arab Emirates ($11.53 billion, 3.2%): Refined petroleum, gold and
aluminum, which supply energy and metals requirements via Middle Eastern
relationships.
10. 1Spain ($9.48 billion, 2.6%): Motor vehicles, machinery, and apparel, improving
manufacturing and consumer markets based on goods obtained in the EU.

2.9 Top 10 Export Partners

1. Germany ($21.1 billion, some 8.1% of combined exports): Or mostly vehicles,

machinery, and textiles the advantage of the EU-Turkey Customs Union, and good
industrial connections.
2. United States ($16.8 billion, approximately 6.4%): It incurs jewelry, textile, and
vehicle, which is fuelled by consumer and automotive industries democracies through
free-trade agreements.
3. Iraq ($13.7 billion, 5.2%): Food products, textiles, and machinery, help rebuild and
sustain the lives of their neighboring market.
4. United Kingdom ($13.0 billion, >5.0%): Cars, about-clothing and apparatus,
enhanced by post-Brexit business agreements and former economical relations.
5. Italy ($12.3 billion, est.4.7%): Textiles, equipment and chemicals, improving
production lines across Europe.
6. Russia ($9.8 billion, nearly 3.8%): Cars, vegetables, and fruit, in energy and
geopolitical connectedness with the ups and downs.
7. Spain $(9.6 billion, ~3.7%): Automotive industry and fashion industry vehicles and
clothing: Vehicles and clothing have EU connections.
8. France (9.5 billion, approximately 3.6 percent): The vehicles, textiles, and aircraft
parts and all this is a result of the bilateral inter-industrial co-operation.
9. Netherlands ($8.02 billion, over 3.1%): Clothing, machinery, and chemicals, taking
advantage of Rotterdam as an important distribution centre in Europe.
10. United Arab Emirates (5.2 billion, 2.0 percent): jewellery, gold and refined
petroleum, driven by luxurious market and inflow of investment.
3. Relations With Pakistan

3.1 Political and Diplomatic Relationship

Overview of Turkey-Pakistan Political and Diplomatic Relations

The relationship between Turkey and Pakistan is deep and multilateral, based on similarities
in Islamic background, history, and similarity in geopolitical demands. In many ways, it is
referred to as Iki Devlet, Tek Millet (Two States, One Nation), their relationships go further
than formal diplomacy involving cultural and religious alliances, and even strategic
relationships. Formal diplomatic relations between the two countries were developed in 1947
(only soon after the independence of Pakistan), with Turkey among the first countries to
recognise Pakistan and see its accession to the United Nations. This relationship has
transformed into Cold War-era security alliances into a modern strategic relationship where
engagements are on the highest level, whenever one country needs another, on shared issues
such as Kashmir and Cyprus, and joint ventures in the multilateral arenas. By December
2025, the relationships are expected to be strong, although the recent events are also focused
on defense cooperation, economic integration, and diplomatic solidarity despite the
challenges faced by the region.

On the political front, Turkey and Pakistan show great convergence in global matters, and
this can be attributed to their Sunni Muslim religious heritage and the feeling of Western
prejudice. Turkey has always been on the side of Pakistan on the issue of Kashmir, and
president Recep Tayyip Erdoogan brought the issue in the topics of speeches at the general
assemblies of the UN (e.g., 20192023), even comparing it to threats to Turkish sovereignty.
In its turn, Pakistan supports Turkey in the struggle on Northern Cyprus, its isolation and
denies the Armenian genocide acknowledgments. The two groups support Palestinian self-
determination and fight Islamophobia in the international arenas.

Diplomatically, high-level visits underscore commitment:

 Erdoğan's 2020 address to Pakistan's parliament, where he received the Nishan-e-

Pakistan award.
 Dual nationality announcement (2020) to ease travel and investment.
 Trilateral summits with Azerbaijan (2021 Baku Declaration) on peace and historical
ties.

Mutual disaster assistance is an example of solidarity: Turkey contributed to Pakistan after

their 2005 earthquake with 150 million dollars; Pakistan contributed to Turkey and its 1999
earthquake, its 2011 earthquake, and their 2023 earthquake, with an air bridge.

Recent Developments (2024–2025)

By December 2025, the situation has escalated with Pakistan seeking to recalibrate its
diplomacy to the Middle East and Turkey trying a neo-Ottoman policy. Key highlights:

 77th Anniversary (2024): It was held in the Pakistan House in Ankara featuring
Turkish parliamentarians such as Mevlüt Çavuşoğlu and Derya Yanik. The speakers
stressed historic brotherhood, mutual anti-terrorism cooperation, and such
 mechanisms as HLSCC/SEF. Çavuşoğlu emphasized increased trade, defense and UN
cooperation, whereas the words of HLSCC/SEF. Two States, One Nation were
repeated by the Ambassador Yousaf Junaid.
 Erdoğan's February 2025 Visit: Signs 27 MoU with PM Shehbaz Sharif on defense,
condemns Gaza relocation proposals and solidarity of Palestinians. This strengthened
Turkey as the main Islamic ally of Pakistan against India to address the loopholes
created by the poor relationships between Saudi and Iran.
 May 2025 Tensions with India: Turkey gave an outright defense to Pakistan in the
Indo- Pak military flare-ups such as purported shipments of weapons and UN censure
against India. This is an indicator of common post-Western quagmires (e.g. Turkey
being excluded by F-35, Pakistan shifting to China), that favor security over India
outreach by Turkey beforehand.
 December 2025 Diplomatic Reshaping: Pakistan uses the growing Iran-Turkey
relations as a negotiating tool to exert pressure on the Middle East by becoming the
mediator of the rivalries between Saudi and Turkey. The stronger parliamentary and
trade missions (e.g., 2024 visits) are supposed to raise the regional position of
Pakistan. (N.B.: CSCR browse does not work, but has search snippet telling so).

3.2 Economic Agreements With Pakistan

The economic relations between Turkey and Pakistan are based on the long-term strategic
alliance, focusing on the liberalization of trade, promotion of investments and sectoral
cooperation. As of 2024, bilateral trade amounted to about 1.4 billion dollars as Pakistan was
exporting textiles, rice, leather goods, and surgical instruments and also importing machinery,
chemicals, and vehicles as direct Turkish imports. Both countries have made it a big target of
5 billion by the year 2025 with increased targets as compared to the past with preference
access, joint venture and integration of infrastructure. Ensuring agreements, which are
negotiated under High-Level Strategic Cooperation Council (HLSCC) that was started in the
year 2009, are the current trade formats but they are developed out of that which existed in
the years 1950s-1980s. Such tools deal with barrier hindering trade, market access, and
participation by the private sector, but have issues such as non-tariff barriers and
implementation loopholes.
Key Modern Economic Agreements

The 2010s changed to preferential trade and sectoral MoUs, and became part of regional
agendas such as the China-Pakistan Economic Corridor (CPEC), the Middle Corridor. The
following table has a summary of major agreements:

Agreement/Mechanism Year Key Provisions Impact/Status (as of

Signed/Effective Dec 2025)
Strategic Economic 2020 (under Roadmap for $5–10 Implemented via
Framework (SEF) HLSCC) billion trade target; annual JEC
covers trade, meetings; supports
investment, tourism, reciprocal trade fairs
energy, and and startup
infrastructure; partnerships; trade
includes protocols grew 15% YoY post-
for e-commerce and 2020.
digital trade.

Preferential Trade Signed: Aug 12, Tariff reductions on Boosted non-

Agreement (PTA) / 2022 Effective: 261 Pakistani traditional exports
Trade in Goods May 2023 products (e.g., rice, (e.g., Pakistani
Agreement textiles, leather) surgical instruments
entering Turkey and up 20% in 2024);
130 Turkish full implementation
products (e.g., ongoing, with calls
machinery, for expansion to
chemicals) into services; projected to
Pakistan; rules of add $1 billion in
origin, safeguards, trade by 2026.
dispute settlement,
and periodic
reviews.
Agreement on 1997 (amended Investor protections, Turkish firms
Promotion and 2010s) fair treatment, and established SEZ in
Protection of ISDS mechanisms; Pakistan (announced
Investments (APPI) facilitates FDI in 2023) for industrial
SEZs. production; FDI
inflows reached
$200 million in
2024, mainly in
textiles and energy.

Double Taxation 1988 (updated Eliminates double Eased Turkish bank

Prevention Agreement 2000s) taxation on entry; discussions for
dividends, interest, a Turkish bank
and royalties; branch in Pakistan
promotes banking (2025 HLSCC).
and financial ties.
3.3 Most Favored Nation (MFN) Status

There is no general most favored nation status between Turkey and Pakistan except the usual
WTO requirement. That is, none of their agreements have any special bilateral MFN clause
that would automatically grant concessions made by Turkey to any third party (or the
reverse).

3.4 Tariff Relaxations

Tariff reductions to Pakistan mainly are established as the Pakistan-Turkiye Trade in Goods
Agreement (also referred to as Preferential Trade Agreement or PTA), which was signed on
August 12, 2022, and against which the tariffs start on May 1, 2023. This bilateral tool will
present asymmetric preferential access to the market, where Turkey will make considerably
wider concessions to Pakistan than the other way around, given the trade deficit and export
requirements of Pakistan. These concessions seek to increase the exports of Pakistan, which
amount to $5.1 billion in the international market of the products covered, into the Turkish
market of 7.6 billion imports of the products in question, to build the bilateral trade of 5
billion dollars by 2025.

The agreements are applied through lower/no customs rates on given Harmonized System
(HS) tariff lines, above normal WTO Most-Favored Nation (MFN) rates (Averaged applied
tariff in Turkey is about 3.2%, higher in the case of agriculture). They have rules of origin so
that only goods that qualify as Pakistani goods can benefit and there would be protection to
sensitive sectors such as textiles. No US-China major expansions or conflicts were reported
as of December 2025, however, talks on the basis of the High-Level Strategic Cooperation
Council (HLSCC) examine the transformation of the PTA to a full Free Trade Agreement
(FTA) with greater tariff removals (e.g., 85% of tariffs).

Scope and Modalities of Tariff Relaxations

Turkey's concessions cover 261 tariff lines, spanning agriculture and industrial sectors, with
phased reductions to facilitate adjustment. Key modalities include:

 Immediate Zero Duty: Applied to ~123 tariff lines (customs duty for agriculture and
additional customs duty for industrial products), effective upon PTA entry into force
(May 2023).
 Phased Reduction to Zero: For ~92 tariff lines, duties reduced over 5–10 years.
 Partial Reductions: 50% cuts on ~5 tariff lines.
 Tariff Rate Quotas (TRQs): Applied to ~14 tariff lines, allowing duty-free imports
up to specified volumes.

Recent Developments (2024–2025)

 2024 Trade Surge: Bilateral trade hit $1.4 billion (30% YoY growth), with PTA
concessions credited for increased Pakistani rice, leather, and textiles exports.
 February 2025 HLSCC Summit: Presidents Erdoogan and Sharif reasserted the
application of PTA with planned expansions in the direction of an FTA such as more
agricultural liberalizations.
  D-8 Integration (January 2025): Tariff concessions aligned with D-8 PTA rules
(SRO 2075(I)/2024), effective January 10, 2025, enhancing compliance for Turkish
imports from Pakistan via shared origin rules.
 December 2025 Status: None of the new relaxations were made, but the reviews of
the Joint Economic Commissions accentuate complete exploitation and conflict-free
protection. The trade delegations of late 2025 were sent to view the rate of PTA
effects when there was tension in international tariffs (e.g. U.S. reciprocal tariffs).

Challenges and Outlook

The barriers to implementation include implementation obstacles such as non-tariff barriers

(e.g. Turkish textile standards) and low implementation (around 60% of lines, as of mid
2025). The next stages can involve services and investment, which can wipe out 85 percent of
all the remaining tariffs by 2027. All in all, these relaxations have put Pakistan at a favorable
position as a supplier in Turkey creating some form of economic resilience. Full HS
schedules may be found in official gazettes of both ministries.

3.5 Trade Between Pakistan and the Country

● Top imports of Pakistan from the country

According to the United Nations COMTRADE database on Trading Economics in 2023 and
2024, the imports of Pakistan in Turkey reached US 250.83 million and 244.73million
respectively. This is a small -0.5 percent of the total amount of importation by Pakistan
(about 50-55 billion a year). The bilateral trade focuses on capital goods, chemicals, as well
as industrial materials, which is consistent with the Turkish export demands in machinery,
vehicles, and textiles. Preferential Trade Agreement (PTA, active May 2023) has been
advantageous to small growth in such categories as machinery and cotton, but volumes fell a
bit in 2024 due to the supply changes on a global scale.

The list of the top 10 imported products, using 2024 data of Trading Economics (aggregated
HS categories), and cross-correlated to the 2023 subcategories of the Observatory of
Economic Complexity (OEC) is as given below. US dollar million values; HS Code, where
available, is at 4-digit (e.g. Chapter 84, machinery). The percentage is estimated fractions of
aggregate Turkish imports. These 10 leading companies represent a ratio of about 70-80 of
total imports.

Rank Product Description HS Code Value (US$ Share of

(Chapter/4-Digit) Million, 2024) Total (%)
1 Machinery, nuclear reactors, 84 (e.g., 8407– 49.16 20.1
boilers 8408)
2 Cotton (raw and yarns) 52 (e.g., 5201) 28.64 11.7
3 Electrical, electronic 85 15.37 6.3
equipment
4 Plastics and articles thereof 39 12.46 5.1
5 Inorganic chemicals, 28 11.61 4.7
precious metals, isotopes
6 Refined petroleum 2710 10.5 (est. from 4.3
2023)
 7 Cars and vehicles 8703 8.2 (est. from 3.4
2023)
8 Iron and steel (structures, 73/72 (e.g., 7308, 7.8 3.2
hot-rolled) 7208)
9 Organic chemicals 29 6.9 2.8
10 Knitted apparel (e.g., 61 (e.g., 6110) 5.4 2.2
sweaters)

Notes:

 Values as of 2024 are of category level, but of 2024 will be more broken down, such
as using HS-6 HS-6 unaggregates, Q1 2026, anticipated in COMTRADE. Ranks 6-10
estimate include 2023 OEC data which have been adjusted to the same (2023),
keeping the YoY growth at approximately 20 per cent.
 Growth trends: Imports increased by approximately 15 in the machinery after the
PTA, and decreased in the year 2024 because of the stabilization of the energy prices.
Bi-lateral trade reached 1.4 billion in 2024 (30% growth compared to the previous
year), with the exports of the country to Pakistan reaching 918.22 million.
 To access complete schedules of HS, either refer to Pakistan Federal board of revenue
or UN COMTRADE.

● Top exports of Pakistan to the country

As per the website Trading Economics and the Observatory of Economic Complexity (OEC),
Pakistan recorded an exports to Turkey of US compromised US export of $352.08 million in
2023 and estimated US export of 400-450 million in 2024 (preliminary, reflecting some 15-
20% growth by the PTA implementation). It is approximately 1.2 percent of the total export
bill of Pakistan (around 29-32.5 billion a year). The trade between the two countries is largely
textile (occupying an approximate of 43.5 percent of the export Paksistani strength in cotton-
related products), and some niche markets, such as oil seeds and metals. The Preferential
Trade Agreement (PTA, effective May 2023) has increased such categories as rice, leather,
and textiles as 261 tariff lines are reduced.

The 10 leading exported products (2023 data from OEC, and subsequently validated against
the same data in COMTRADE) are listed below as partial breakdowns of the historically
finalized 2024. Here values are expressed in US dollar millions; Hs codes at 4 segment where
available (e.g. chapter 52 cotton). Percentages are rough consumption of overall exports to
Turkey. These 10 comprise about 8085 percent of the total exports.

Rank Product Description HS Code Value (US$ Share of

(Chapter/4-Digit) Million, 2023) Total (%)
1 Cotton fabrics and textiles 52 (e.g., 5208– 153.3 43.5
5212)
2 Cotton yarn 5205–5207 35.2 10.0
3 Other textile articles (e.g., 63 (e.g., 6302) 28.6 8.1
 made-ups)
4 Rice 1006 21.1 6.0
5 Leather goods 41–42 (e.g., 4107, 17.7 5.0
4203)
6 Oil seeds (e.g., sesame) 1207 14.1 4.0
7 Unwrought lead 7801 10.5 3.0
8 Fruits and nuts (e.g., dates, 08 8.9 2.5
mangoes)
9 Surgical instruments and 9018 7.1 2.0
medical appliances
10 Sports goods 9506 5.3 1.5

Notes:

 Textiles (1-3) are dominant because of the Turkish need in raw cotton materials and
finished products, and PTA concessions will lead to the growth of nearly 20 percent
per year in 2024. The PTA gives an instant benefit of zero-duty access to non-textile
goods such as rice and leather.
 2024 forecasts include incomplete information on the part of the Pakistan Bureau of
Statistics (PBS) and CEIC which depicts that textile remains the leader in overall
bilateral trade despite reaching 1.4 billion (30% th year on year growth).

Total trade volume

In 2024, the total bilateral trade between Turkey and Pakistan recorded an all-time high of
US1.4 billion which is almost a 30% increase over the same value in 2023 (around US1.08
billion). This is followed by the introduction of the Preferential Trade Agreement (PTA,
effective May 2023) that allows reduced tariffs on such products as textiles, rice, and
equipments, and the high-level level of diplomatic interactions (President Erdoğan has visited
in February 2025). In the case of 2025, in the first half of the year there is a driving force and
trade volumes are projected to reach over 1.5 billion due to a new MoU in energy and
defence sectors. High-Level Strategic Cooperation Council (HLSCC) set a target of 5 billion
dollars by 2010 between the two countries.

Breakdown of 2024 Trade

Component Value (US$ Million) Share of Total (%)

Pakistan's Exports to Turkey 440.13 31.4
Turkey's Exports to Pakistan 918.22 65.6
Total Trade Volume 1,358.35 (rounded to $1.4B) 100
Trade balance

Bilateral trade balance in both Turkey and Pakistan is computed as exports that Turkey
exports to Pakistan giving -imports that Turkey imports, or the other way round. In the
relationship, there has been a rising trade surplus in favor of Turkey, indicating that Pakistan
has more demand of Turkish capital goods, machinery and chemicals as compared to the
imports of the Pakistani textiles and agricultural products by Turkey. In 2024, Turkey had a
surplus of US 478.09M, with total trade of a record of 1.4 billion (increased by 30% on the
year before). The current data through November indicates a comparable imbalance, with
exports of Turkey being approximately $950 million and imports approximated at 450
million, which is expected to project a year-end surplus and a general trade reaching more
than 1.5 billion.

● Strategic gains by the Preferential Trade Agreement (PTA, in effect May 2023)
compensates this shortfall in Pakistan, as its exports have increased by about 1520
percent in the Preferential Trade Agreement category such as rice and leather
although imported non-textile goods in Turkey (e.g., energy equipment) drive the
disparity. The two countries strive to balance the satisfaction of ties by the 5-billion
trade goal by 2030 both through the extended FTA talks and via the joint ventures.

● 2024 Trade Balance Breakdown

Component Value (US$ Million) Share of Total Trade

(%)
Turkey's Exports to Pakistan 918.22 65.6
Turkey's Imports from Pakistan 440.13 31.4
Trade Balance (Surplus for +478.09 N/A
Turkey)
Total Trade Volume 1,358.35 (rounded to 100
$1.4B)

● Historical Trade Balance Trend (2019–2024)

Year Total Trade (US$ Trade Balance (US$ Million, YoY Change in
Million) Turkey Surplus) Surplus (%)
2019 650 +300 (approx.) -
2020 720 +320 +6.7
2021 850 +380 +18.8
2022 950 +420 +10.5
2023 1,080 +450 +7.1
2024 1,400 +478 +6.2

4. Analysis

4.1 Strength of Trade Relationship

1. Trade Volumes and Scale: Modest in Absolute Terms but Not Insignificant

 Current and Recent Volumes: As of 2023 the bilateral trade amounted to around
$1.005 billion, with Pakistan exporting $465 million to Turkey and importing 540
million that led to a balance of deficit of money to Pakistan at 75 million. Trade
surged to consistency highs at 1.4 billion in 2024 around 3035 percent/year on the
back of the PTA implementation in May 2023. The data on the full-year level is not
yet provided (as of December 11, 2025), but monthly data points to the idea that the
activity is still present and at the moderate pace. Exports Nepakistan exported to
Turkey in September 2025 amounted to 39.8 million (an advance of 9.12 percent over
September 2024 of 36.5 million) and imports amounted to 33.2 million (a decline of
17.3 percent over September 2024 of 40.1 million) which gave Pakistan a monthly
surplus of 6.59 million. With a way to go (assuming average trends in the monthly
forecasts), annual trade in 2025 would be between 800 million and 1.0 billion,
possibly less than 2024, because nth of the imports would have fallen, but makes up
of the end of year energy transactions (e.g., 5 billion oil/gas MoUs in December 2025)
could increase the 2025 annual trade to 800-1.0 billion.
 Relative Significance: The books are just but a limited part of the entire global trade
of the respective countries supporting the moderate status. In the case of Turkey
where the total exports have been about 390 billion and total imports are about 299
billion and January-October 2025 bilateral trade between Turkey and Pakistan
comprises less than 0.5 percent of the total trade. Equally, in the case of Pakistan,
with total exports being approximately 32.3 billion and imports being approximately
50-55 billion, the Turkish country is approximately 1-2% of the total Pakistan trade.
This is not a laggard (since it is increasing and surpassing $1 billion) but by no means
a robust one compared to the relationships that Turkey can have with such significant
partners as Germany (47 billion bilateral) or Pakistan with China (20-25 billion). The
contributions of the trade-to-GDP ratio are also minimal: In the case of Turkey (GDP
of about $1.44 trillion in 2025), bilateral trade amounts to almost nothing, 0.1% of
GDP; in the case of Pakistan (GDP of about $350-400 billion) trade is around 0.34-
0.42.

2. Growth Trends: Positive Momentum but Volatile and Below Potential

 Historical Growth: Over the last five years (as of September 2025), trade has
increased at a rate of 14.9 year on year, but, following the PTA, it has gone up by
30% in 2024. This is seen as strategic endeavour, such as the High-Level Strategic
Cooperation Council (HLSCC) and PTA, which lowered tariffs on 261 Pakistani
goods (e.g., textiles, rice, leather) and 130 Turkish goods (e.g., machinery,
chemicals), which have seen 15-20 per cent growth of exports in select countries
categories such as Pakistani clothing (43.5 per cent of export to Turkey in 2023).
More recent high-level meetings, including the Joint Ministerial Commission (JMC)
meeting in September 2025, restated the intentions to increase the scope of trade, with
new MoUs in the energy, agriculture and banking sector being signed during the visit
of Erdoğan in February 2025.
 2025 Trends and Projections: Although the surge of 2024 was powerful, the
moderation can be observed in 2025, as in September, the exports of Pakistan
increased by 9.12% whereas imports decreased by 17.3, perhaps because the price of
energy stabilized, or due to the issues in the global supply chain or the economic
restrictions of the country (high inflation, currency fluctuations and so on). January-
 November data is not explicitly available on a cumulative basis, but based on the total
trade of $73 million in September, one may project an annual growth of about $876
million had the numbers been the same, but late-2025 deals may bring it close to 1.2-
1.5 billion. The two countries have a goal of 5 billion dollar (short term 2025 or
longer at the end of each decade) showing optimism with current levels representing a
mere 20-30 percent of the desired levels. This possibility of growth moderates the
moderate label of the weak but does not allow it to be strong in the absence of
achieved goals.

3. Sectoral Complementarities and Strategic Alignment: Strengths That Support

Moderation

 Complementary Trade Structure: Pakistan has a balanced composition of the trade

with exports of labor-intensive goods such as cotton fabrics/textiles ({\|human|>The
trade is composed of balance in terms of which Pakistan exports the goods such as
cotton fabrics/textiles through export value of 153.3M in 2023 (43.5%): cotton
fabrics/textiles have a 43.5% share, cotton yarn 35.2M, rice 21.1M, and leather
17.7M; and imports capital-intensive goods of This would coincide with the export
strength of Pakistan (textiles/agriculture) and Turkey (machinery/processed goods)
therefore, corporate benefits are created (i.e. Turkish machinery will help Pakistani
manufacturing and Pakistani raw cotton will help Turkish textiles).
 Political and Diplomatic Backing: The relationship dates back to Two States, One
Nation, connective since 1947, providing a variety of strong structures, such as the
HLSCC (2009), Strategic Economic Framework (SEF), and PTA (2022) that have
enabled 50+ MoUs in trade, energy, and defense. Political assistance toward such
matters as Kashmir/Cyprus and disaster relief (such as 2023 earthquake in Pakistan)
create trust, and it is possible to do trading among geopolitical conflicts. The
combination with the regions (e.g., CPEC, Middle Corridor, D-8) brings trade in the
focus of economic corridors.
 Investment and Diversification: On top of that, there are goods, services trade (e.g.
tourism, IT) and investments (e.g. Turkish FDI in Pakistani SEZs, $200M in 2024),
and eventually banking branches and e-commerce. By 2025, Turkish contractors had
done $3.5B of local projects in Pakistan to strengthen infrastructure relationships.

4. Challenges and Limitations: Factors Preventing a "Strong" Classification

 Trade Imbalance and Deficits: Imported high-value goods in Turkey exceed

exports, resulting in a steady deficit (~$75M in 2023, ~478M in 2024) and making the
country strain its balance of payments among other economic challenges in the
country (e.g., $50-55B import bill). Although the data of 2025 monthly do indicate
the occasional surplus (e.g. September), the much-overall asymmetry constrained
sustainability.
 Implementation Gaps and Barriers: PTA utilization is low (~60% of lines by mid-
2025), hampered by non-tariff barriers (e.g., Turkish standards on textiles),
bureaucratic hurdles, and slow expansion to services/investments. External factors
like global inflation, energy crises, and geopolitical risks (e.g., Indo-Pak tensions,
Turkey's EU relations) add volatility.
 External Dependencies and Risks: They are both experiencing currency instability
(Turkish lira, Pakistani rupee) and dependency on third parties (e.g. the China pivot
 by Pakistan, the energy dependence of Turkey on Russia), thus blurring bilateral
attention. Agriculture effects Climate and migrational concerns (e.g., 5,000-6,000
Pakistani migrants to Turkey/annum) at times put a strain on them.
 Comparison to Peers: Trade pales against Turkey's EU partners (41.5% of exports)
or Pakistan's with China/USA, indicating untapped potential despite "brotherhood"
rhetoric.

4.4 Suggestions to Improve Trade

A combination of policy reforms, infrastructural development, elimination of trade barriers,

and enhanced economic integration should all be strengthened between Turkey and Pakistan
to strengthen the trade between the two nations. Despite a solid political relationship between
both nations and the framework adopted such as Preferential Trade Agreement (PTA), there
are a number of measures that can be done to increase volume of trade, to ensure that the
imbalances are reduced, and enhance economic cooperation in the long run. To enhance
bilateral trade, the following recommendations are a holistic way of doing it:

1. Expand the Preferential Trade Agreement (PTA) into a Comprehensive Free Trade
Agreement (FTA)

The current PTA covers a limited number of tariff lines (261 from Pakistan and 130 from
Turkey). Expanding this into a full FTA would:

 Eradicate or cut tariffs of trading products of 80-90 percent.

 This is because Pakistan currently has limited resources in gaining access in the
markets of textile, chemicals and machinery of Turkey which is a major producer of
such goods.
 Assist Turkey to infiltrate Pakistani agriculture, building as well as automobile
industries.
 Reduce trade imbalance by making it possible to export more value added products by
Pakistan.

A fully liberalized FTA could help both nations reach the target of $5 billion in trade
volume within the next 3–5 years.

2. Reduce Non-Tariff Barriers (NTBs) and Harmonize Standards

Even with tariff concessions, many Pakistani exports still face NTBs such as:

 strict product standards in textiles and leather,

 lengthy customs processes,
 certification requirements,
 quality inspections in Turkey.

Both countries should:

 establish mutual recognition agreements (MRA) for standards and certifications,

  create digital customs clearance systems,
 simplify documentary requirements,
 strengthen border management and risk-based inspections.

These reforms would minimize export delays and costs, enabling smoother trade flows.

3. Improve Logistics, Shipping Routes, and Connectivity

Trade between Turkey and Pakistan is currently slowed by long shipping times and high
freight costs due to indirect routes. Improvements may include:

 Direct shipping routes- Karachi- Istanbul and Gwadar- Izmir.

 Improved air cargo connectivity of high-value products such as surgical equipment,
information technology devices and luxury cloth.
 Inclusion of Pakistan in the Trans-Caspian International Transport Route (Middle
Corridor) to access Europe faster by land via Turkey.
 Sharing of Gwadar Port and Turkish logistics firms in order to cut down
transportation expenses.

4. Promote Joint Ventures and Industrial Cooperation

Both nations should encourage joint investments in high-growth sectors such as:

 textiles and apparel manufacturing,

 automotive parts assembly,
 pharmaceuticals and chemicals,
 defense production and technology transfer,
 construction and real estate development.

Turkey firms will be able to invest in the Special Economic Zones (SEZs) of Pakistan under
CPEC whereas the Pakistani firms will be able to invest in the Turkish industrial clusters.

This will:

 increase technology transfer,

 grow employment,
 boost exports,
 reduce trade deficits.

5. Strengthen Financial and Banking Cooperation

Trade is often affected by limited financial channels and complex banking procedures. To
improve this:
  Turkish banks should open branches in Pakistan and vice versa.
 Introduce a bilateral currency swap agreement to reduce reliance on USD.
 Implement secure digital payment systems for SMEs.
 Provide export credit guarantees and insurance to minimize risks for businesses.

Improved financial integration will encourage private sector involvement and reduce
transaction costs.

5. Conclusion
The strong relationship between Turkey and Pakistan has been anchored on the strong ties
between the two countries, mutual cultural values and commitment to collaborate through
economic and trade relations. Nevertheless, notwithstanding this favourable background, the
reality of trade between the two nations is way short of what it could be. Obstructing factors
in structural models: Tariff and other restrictions, transportation complications, inadequacy in
product diversification, and absence of a universal participation of the private sector remain
some of the reasons why the reality of bilateral trade cannot truly be achieved.

Furthermore, the two economies have areas of their strength that can be used to complement
each other. The competitiveness of Pakistan in the textile, agricultural industry, and surgical
tools, in addition to Turkey in terms of its technological development, industrial equipment,
construction, and tourism industry would make a very promising outlook of a long-term
economic collaboration. The problem is not a potential, but an implementation, both
countries have to implement policies and structures that promote investment, minimize trade
barriers, and build sustainable economic relationships.

Enhancing logistics chains, diversifying preferential trade agreement to a broader agreement

of free trade and encouraging industrial cooperation will approach central roles in uniting
new economic opportunities. Performing these measures properly, Turkey and Pakistan will
be able not only to increase bilateral trade but also promote the economic stability of the
region, generate jobs, improve innovations, and contribute to the sustainable development.
Simply, when trade and collaboration is improved, then the political good will can be
transformed into tangible economic wellness of both countries.

Recommendations for Improving Trade and Economic Cooperation with

Pakistan

1. Expand the PTA into a Full Free Trade Agreement (FTA)

In order to be able to boost the volume of trade, both nations should drop the current
Preferential Trade Agreement (PTA) to a full-fledged Free Trade Agreement. A strengthened
FTA could:

 Remove tariffs across major product categories

 Boost Pakistan’s access to Turkish markets, especially for textiles, leather, and
agricultural goods
  Allow Turkey wider access to Pakistan’s machinery, automotive parts, and
technology markets
 Reduce trade imbalance and encourage long-term economic stability

2. Address Non-Tariff Barriers (NTBs) and Simplify Regulations

In many cases, non-tariff barriers are a bigger obstacle than tariffs. Both countries should:

 Harmonize quality standards and certifications

 Digitize customs systems and reduce paperwork
 Introduce transparent and faster inspection procedures
 Establish a joint regulatory committee to resolve technical trade issues

Reducing NTBs will lower export costs, shorten processing time, and make trade more
predictable.

3. Strengthen Transport Connectivity and Logistics Infrastructure

Efficient logistics are essential for timely and cost-effective trade. Improvements may
include:

 Launching direct shipping routes between Karachi–Istanbul and Gwadar–Izmir

 Establishing cold-chain and dry-port facilities for agricultural goods
 Enhancing air cargo capacity for high-value exports
 Integrating Pakistan into regional trade routes such as the Middle Corridor
 Encouraging joint investments in ports, railways, and road networks

4. Encourage Joint Ventures and Industrial Collaboration

Closer industrial cooperation is necessary for sustainable economic growth. Both countries
should promote:

 Joint ventures in textiles, automotive manufacturing, defense equipment, and

pharmaceuticals
 Turkish investments in Pakistan’s Special Economic Zones (SEZs) under CPEC
 Technology transfer partnerships to upgrade Pakistan’s manufacturing base
 Collaboration in renewable energy, construction materials, and infrastructure projects

These steps will generate employment, enhance local production capacity, and expand export
potential.

5. Strengthen Banking, Financial Systems, and Payment Mechanisms

Trade expansion requires reliable financial channels. Possible measures include:

 Encouraging Turkish and Pakistani banks to establish branches in each other’s

countries
  Introducing a bilateral currency swap agreement to reduce dependence on the US
dollar
 Simplifying trade finance procedures for SMEs
 Offering export credit guarantees to minimize risks for businesses
 Developing secure digital payment systems for cross-border trade

These improvements will enhance trust and support faster financial transactions.

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exports
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