01
Overview
Turkey is Canada's largest bilateral trading partner in the Middle East and among Canada's top 20 global trading partners overall, with total bilateral goods trade of approximately $3B CAD in 2024 and a Canadian trade surplus of approximately $0.8B. Canada runs a surplus primarily because Turkey is a significant importer of Canadian wheat, canola, and durum — Turkish wheat imports from Canada represent one of the most substantial bilateral agri-food flows in Canada's non-CETA, non-CPTPP markets. Turkey and Canada lack a bilateral free trade agreement and Turkey is not in the EU, so CETA does not apply. Despite the absence of an FTA, Canada–Turkey bilateral trade has grown steadily driven by Turkish industrial growth and Turkey's role as a gateway economy between Europe, the Middle East, and Central Asia.
Turkey's bilateral relationship with Canada is characterized by strategic complexity. As a NATO member, Turkey is a formal ally — but Turkey under President Erdoğan has pursued an increasingly autonomous foreign policy, maintaining ties with Russia while opposing NATO expansion for Sweden and Finland (ultimately resolved), acquiring Russian S-400 air defence systems (triggering US F-35 exclusion), and playing an active mediator role in the Russia-Ukraine conflict. The bilateral Canada-Turkey relationship became acutely tense when Canada suspended drone camera export permits to Baykar (manufacturer of Bayraktar TB2 drones) in 2020, citing concerns about use in the Nagorno-Karabakh conflict — a decision that strained defence industry relations but reflected Canada's human rights and arms export control commitments.
02
Political Context
GovernmentAKP/MHPErdoğan coalitionPresidentErdoğanRe-elected May 2023Next Election2028Presidential term limitNATO MemberYesMember since 1952CETA CoverageNoNot EU memberPolicy StabilityCautiousErdoğan consolidated power
President Recep Tayyip Erdoğan was re-elected in May 2023 in a runoff election, extending AKP rule to over two decades. Erdoğan's re-election was followed by a significant policy shift — the appointment of mainstream economist Mehmet Şimşek as Finance Minister and a pivot toward more orthodox monetary policy after years of unconventional negative-interest-rate policy that had produced inflation exceeding 85%. By 2024, Turkey's central bank had raised rates sharply (to 40%+) in an effort to bring inflation under control, signaling a significant economic policy normalization. For Canadian companies, the economic stabilization reduces some commercial risk but Turkey's political environment — weakened rule of law, media restrictions, politicized judicial system — remains an elevated-risk operating context relative to Western markets.
03
Economic Profile
GDP$1.15TUSD, 2024 (IMF)GDP Growth+3.2%2024 (IMF)Inflation47%2024 YE — stabilizingPopulation86MYoung, large domestic marketAuto ManufacturingTop 15Global production rankCredit RatingB2 / B+Moody's / S&P (sub-IG)
Turkey is the world's 17th-largest economy by GDP — a major emerging market with a young population (median age ~32), a large and growing domestic consumer market, and a significant industrial base. Turkish manufacturing is internationally competitive in automotive (Ford, Fiat, Toyota, Hyundai all have large Turkish plants), textiles and apparel, steel, chemicals, and defence. Turkey's strategic location — bridging Europe, the Middle East, and Central Asia — makes it a natural trade and logistics hub. Despite chronic inflation and currency vulnerability (Turkish lira has depreciated significantly against the CAD since 2018), Turkey's real economy has demonstrated resilience with consistent growth.
04
Bilateral Trade
Total Bilateral Trade~$3BCAD goods, 2024 (StatCan)Canadian Exports~$1.9B2024 (StatCan)Canadian Imports~$1.1B2024 (StatCan)Trade Balance+$0.8BCanadian surplusWheat ExportsMajorTurkey = top wheat buyerFTA StatusNoneWTO MFN applies
Top Canadian exports to Turkey: Wheat and other grains are the dominant bilateral export — Turkey is among the world's largest wheat importers and Canada (particularly Western Canadian hard red spring wheat) is a primary supplier to Turkish flour mills. Canola, durum wheat, and other agri-food products follow. Aircraft and aerospace equipment (Turkish Airlines is a major customer of Boeing and Airbus, with Canadian component content), lumber and wood products, and industrial machinery are also significant. Top Canadian imports from Turkey: Automotive parts (Ford, Fiat, Toyota Turkish plants), textiles and apparel, steel and metals, chemicals, and carpets and home furnishings.
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Market Access
WTO MFN Applies — Standard WTO TermsCanada and Turkey are both WTO members trading under MFN terms. Turkey applies a customs union with the EU for industrial goods (meaning EU-origin industrial goods enter Turkey at zero duty — a structural competitive disadvantage for Canadian exporters of manufactured goods vs. EU competitors). Agricultural goods are not covered by the EU-Turkey customs union; Canadian wheat and agri-food products face Turkish agricultural tariffs that are generally in the 0–45% range depending on product and season.Key market access note: Turkey's EU customs union for industrial goods means that Canadian manufacturers face tariffs that EU competitors do not. CETA partners (German, French, Italian manufacturers) export to Turkey duty-free for most industrial categories. A Canada-Turkey FTA would be strategically significant for equalizing Canadian manufacturers' competitive position.View all Canadian trade agreementsWATCHCanada and Turkey have explored bilateral trade agreement negotiations on multiple occasions. A Canada-Turkey FTA would significantly benefit Canadian manufacturers by eliminating the competitive disadvantage created by Turkey's EU customs union. Monitor Global Affairs Canada for any new FTA scoping discussions with Turkey.TARIFF REFERENCE
Look up import and export tariff rates for goods traded between Canada and Turkey.
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Opportunity Assessment
Agri-food — STRONGTurkey is one of Canada's largest wheat export markets — Turkish flour mills and grain traders are reliable long-term buyers of Western Canadian hard red spring and durum wheat. Turkey's large population, significant food processing industry, and dependence on imported grain create a structural, recurring agri-food export opportunity for Canadian grain producers.Aerospace & Defence — SELECTIVETurkey's domestic defence industry is rapidly growing (Baykar, ASELSAN, Roketsan). Turkish Airlines is one of the world's largest carriers with significant Airbus and Boeing orders containing Canadian component content. Canadian aerospace suppliers with F-35 or civil aviation supply chain participation have existing bilateral revenue. Direct defence cooperation remains sensitive post-2020 export permit dispute.Advanced Manufacturing — SELECTIVETurkey hosts major Ford, Fiat Chrysler, Toyota, and Hyundai manufacturing plants — Canadian automotive parts suppliers (Magna, Linamar) may find Turkish supply chain entry through shared OEM relationships. Canadian advanced manufacturing companies with EU-competitive pricing and quality can access Turkish automotive supply chains despite the EU customs union disadvantage.Energy & Infrastructure — EMERGINGTurkey has major renewable energy ambitions — targeting 30GW+ of wind and 10GW+ of solar by 2030 — and is investing heavily in energy infrastructure including TANAP (Trans-Anatolian Pipeline) and natural gas import infrastructure. Canadian cleantech and energy project finance companies have identifiable opportunities in Turkey's infrastructure development.Critical Minerals — WATCHTurkey has significant mineral resources including boron (world's largest reserves), chromite, and marble. Turkey's geography as a transit country for Central Asian mineral exports creates a potential role as a logistics and processing hub. Canadian critical minerals companies with Central Asian interests may find Turkish partnership relevant.Technology & Digital — CAUTIONTurkey's internet censorship environment, data localization requirements, and weakened rule of law create meaningful barriers for Canadian technology companies. Turkish tech market is active (Trendyol, Getir) but Canadian enterprise software and digital companies face regulatory uncertainty, IP protection concerns, and local partnership requirements that add market entry complexity.07
Canadian Business Presence
Canadian agricultural companies — primarily major grain traders and elevator operators (Richardson International, Viterra/Glencore) — maintain active Turkish commercial relationships through grain off-take agreements with Turkish flour mills and grain importers. Turkish wheat imports from Canada are primarily arranged through intermediary grain trading houses rather than direct Canadian-Turkish relationships, but Canadian originating volumes are substantial.
Bombardier has supplied aircraft to Turkish Airlines (though Airbus and Boeing dominate the Turkish carrier fleet). Canadian aerospace component suppliers with F-35 supply chain participation have indirect exposure to Turkey's eventual F-35 programme — Turkey was originally a Level 3 F-35 partner but was removed following the S-400 purchase; the bilateral aerospace relationship is consequently reduced from its potential. Magna International has had supply chain relationships with Turkish automotive manufacturers. Major Canadian financial institutions have limited direct Turkish presence but serve Turkish corporate clients through their international banking platforms. The Canadian Embassy in Ankara maintains a Trade Commissioner Service presence with active programming in agri-food, infrastructure, and education.
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Risk Register
| Risk Category | Level | Assessment |
|---|---|---|
| Political | Elevated | Erdoğan's consolidated power, weakened judicial independence, and politicized regulatory environment create meaningful political risk for foreign investors — particularly in sectors subject to government licensing (telecom, energy, defence). Export permit disputes (Baykar drone cameras, 2020) demonstrate bilateral political risk is real. |
| Currency | High | Turkish lira has depreciated ~80% against CAD since 2018. While monetary policy normalization under Şimşek is reducing inflation from 85% peak, TRY volatility remains high. Long-term TRY-denominated contracts require robust hedging or USD/EUR denomination. |
| Regulatory | Elevated | Turkish regulatory environment is less predictable than EU markets — regulations can change rapidly with limited consultation. Local content requirements exist in some sectors. Intellectual property protection is weaker than EU/OECD standards. Legal disputes may be resolved slowly or with political influence. |
| Commercial | Moderate | Turkish business culture values long-term relationship building; contracts are generally honoured by major Turkish companies. Payment terms in Turkish commercial transactions tend to be longer than Canadian norms. Credit risk due diligence is important for SME counterparties. |
| Geopolitical | Elevated | Turkey's NATO membership alongside its S-400 purchase, Russia ties, and autonomous foreign policy create a complex allied-but-independent dynamic. Canada's export permit suspension for Baykar camera components demonstrates bilateral geopolitical risk is not hypothetical. Ongoing disputes require policy monitoring. |
| Market Access | Moderate | EU customs union for industrial goods creates a structural competitive disadvantage for Canadian manufacturers vs. EU suppliers. Agricultural market access faces Turkish tariffs. No FTA in effect. Turkish MFN tariffs on many goods are moderate (5–15%) but meaningful. |
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Procurement Pipeline
Turkish government procurement is not covered by the WTO GPA — Turkey has observer status but has not ratified the GPA, meaning Canadian companies do not have guaranteed non-discriminatory procurement access to Turkish public tenders. Turkish public procurement (governed by Law No. 4734) contains local content preferences in certain sectors. The absence of GPA coverage and local content provisions create structural barriers for Canadian suppliers in formal public procurement.
🔗Turkish Public Procurement Authority (EKAP)Turkey's procurement portal at ekap.kik.gov.tr publishes all above-threshold Turkish government tenders in Turkish. Canadian companies should engage TCS Ankara for translation support and procurement eligibility assessment — particularly for infrastructure, energy, and technology tenders where foreign participation is permitted.🔗Turkish Defence — SSB (Presidency of Defence Industries)Turkey's Presidency of Defence Industries (SSB) manages Turkish military procurement. Following Turkey's removal from the F-35 programme, SSB has accelerated domestic defence industry development. Canadian defence companies should monitor SSB procurement for opportunities in areas where Turkey seeks allied-nation technology partnerships — particularly avionics, C4ISR, and naval systems.🔗TCS Turkey — Ankara & IstanbulThe Trade Commissioner Service maintains offices in Ankara (embassy) and Istanbul with priority programming in agri-food, education, infrastructure, and technology. TCS Turkey can assist Canadian companies with market entry, partner identification, and procurement navigation in the Turkish market.10
Government Signals
📄Canada–Turkey Baykar Export Permit Dispute · 2020–OngoingIn 2020, Canada suspended export permits for drone camera technology destined for Baykar (manufacturer of Bayraktar TB2 UAVs) following evidence of use in the Nagorno-Karabakh conflict between Azerbaijan and Armenia. The dispute — which involved a Canadian ally (Azerbaijan) using Canadian-component Turkish drones against another country (Armenia) — resulted in the export permit suspension, strained bilateral defence industry relations, and triggered a formal Canadian export control review of dual-use technology exports to non-allied operators.📄Canada–Turkey Consular Framework · ActiveCanada maintains strong consular services for the significant Turkish-Canadian diaspora community (approximately 100,000 Turkish-origin Canadians). Bilateral people-to-people ties — including education partnerships and cultural exchange — are a stabilizing factor in the bilateral relationship and create business-to-business connection opportunities in professional services, education technology, and diaspora-linked trade.📄Canada–Turkey FTA Exploratory Discussions · HistoricalCanada and Turkey have held exploratory discussions on a bilateral free trade agreement on multiple occasions, most recently in the mid-2010s. Progress has been limited by political complexity, Turkey's EU customs union obligations, and human rights concerns. A future FTA remains strategically attractive for both countries — Canadian manufacturers would gain parity with EU competitors in the Turkish market — but no active negotiation is currently underway.11
Sources
1. Statistics Canada, Table 12-10-0011-01: International merchandise trade by country, 2024 annual data.
2. International Monetary Fund, World Economic Outlook, October 2024: Turkey GDP, growth, inflation data.
3. Turkish Statistical Institute (TurkStat): GDP, employment, trade data, 2024.
4. Global Affairs Canada, Chief Economist Branch: Canada-Turkey bilateral trade analysis, 2024.
5. Global Affairs Canada: Export permit suspension for Baykar drone cameras, 2020; subsequent review.
6. WTO: Turkey observer status on GPA; Turkey trade policy review, 2024.
7. Turkish Presidency of Defence Industries (SSB): Procurement frameworks, 2024.
8. NATO: Turkey member state profile, defence spending data, 2024.
9. Moody's Investors Service / S&P Global Ratings: Turkey sovereign credit rating, 2024.
10. Trade Commissioner Service, Turkey Country Market Report, 2024–2025.