South Korea, Turkey Sign Preliminary FTA

Following meetings earlier this month, South Korea and Turkey were able, on March 26, to sign an initial agreement on trade in goods, as a step on the way to a full bilateral free trade agreement (FTA).

The first stage of talks on the FTA began back in April 2010, but it was a meeting in Istanbul last month between the South Korean President Lee Myung-bak and the Turkish Prime Minister Recep Tayyip Erdogan that provided the necessary impetus for the two countries to conclude their talks as soon as possible.

Following this month’s meetings, the two sides confirmed that they had reached an accord on tariff concessions for their trade in goods, while there were still differences over such issues as services and investment, where talks are still on-going.

President Lee and Prime Minister Erdogan were present at the signing of the preliminary goods trade agreement, which was signed by South Korean Trade Minister Bark Tae-ho and Turkey's Economy Minister Zafer Caglayan. It is still hoped that negotiators of the full FTA should be able to respect their governments’ wishes to have the final text before the end of June this year.

Both countries are hoping that the FTA will strengthen their economic and trading relationship, which is currently dominated by South Korea’s exports to Turkey – particularly its exports of automobiles, as Turkey already has low import tariffs on such products. However, Turkey would hope that its agricultural and textile exports would also be able to benefit from any future agreement.

In fact, the South Korean government recognizes Turkey’s importance as a gateway to Europe, the Middle East and Central Asia, and South Korean companies are interested in making substantial investments in Turkey, in such areas as nuclear power, construction, steel-making and electronic products.

Source: Tax News