Turkey and South Korea signed a framework deal on Monday to establish a free trade regime between them, Today's Zaman reported.
Economy Minister Zafer Caglayan put his signature on the Joint Declaration for the Turkey-South Korea Free Trade Agreement (FTA) with South Korean Trade Minister Park Tae-ho in the Far Eastern country's presidential residence, the Blue House. Prime Minister Recep Tayyip Erdogan and South Korean President Lee Myung-bak were also present at the ceremony.
"After the preparations are completed, our ministers will come together and sign the necessary agreements in June at the latest," said Erdogan, noting that it will be a great opportunity for the two countries to forge much stronger economic relations with each other. "This agreement will be a great encouragement, particularly for the development of trade in goods. Similarly, investments by South Korea's well-known brands Posco and Hyundai will be much more profitable and competitive thanks to the FTA," he added.
The bilateral trade volume between the two countries was at some $7 billion last year, most of which were South Korean exports to Turkey. Turkish exports to South Korea were only around $500 million in 2011.
Erdogan made clear that he was not happy with the current weight of commercial relations with the Far Eastern nation. "$7 billion falls short of representing our [trade] potential. I believe that as a result of today's signatures and those that will come in June, this will increase to the level we want. Also they will give us an opportunity to fix the trade imbalance," the prime minister said. For him, key fields where Turkish and South Korean businesses cooperate are energy, defense technologies, agriculture, ship and auto vehicle production as well as information technologies. "We have seen very clearly the positive results of the FTAs we have signed so far. We eagerly await the month of June," he said.
Turkey currently has FTAs with 15 nations as well as with members of the European Free Trade Association (EFTA), a free trade organization of four non-European Union member states in Europe.
Lee visited Turkey at the beginning of February for four days and met with his Turkish counterpart, Abdullah Gul, as well as Erdogan. Aside from South Korean firms' participation in infrastructure projects in Turkey and improving bilateral commercial relations at large, the leaders also discussed the possibility of a nuclear power plant to be constructed by South Korea in Turkey.
Turkey plans to build two power plants, one in Akkuyu on the Mediterranean coast and another in Sinop on the Black Sea coast. Having agreed with Russia on the construction of the Akkuyu power plant, Turkey had talks with Japan to reach an agreement on building a second nuclear power plant on the Black Sea coast, but the talks were suspended after a nuclear power plant accident in Japan following an earthquake-triggered tsunami in March of last year.
In 2010, South Korea and Turkey held intense negotiations on the $20 billion project to build four nuclear reactors on Turkey's Black Sea coast. But the negotiations were suspended after the sides failed to work out key differences.
Prospects emerged for the resumption of these talks when Erdogan asked South Korea to participate in the nuclear power plant project during a meeting with Lee on the sidelines of a G-20 summit in Cannes in November. South Korea relies on nuclear plants for about 40 percent of its electricity needs. It has also been trying to export nuclear power plants since Korean firms won a massive contract in late 2009 to build four atomic power plants in the United Arab Emirates. Turkey is also mulling cooperation with South Korea to manufacture attack helicopters domestically. Meeting Lee in early February, Gul said the country is willing to cooperate with South Korea in manufacturing the Atak helicopter. "We want to cooperate with South Korea on the Atak helicopters, which will be included in the Turkish Armed Forces' [TSK] inventory. In addition, Turkey is also willing to cooperate with South Korea in other areas such as aircraft manufacturing," he said at a press conference with Lee on Feb. 6 in Ankara.
The Atak, officially known as the TAI/AgustaWestland T-129, is an attack helicopter currently under development for the Turkish Army. Turkish Aerospace Industries (TAI) has been commissioned to develop domestic avionics and weapons systems as well as helmet-mounting cuing systems.