Turkey FTA expanded to services, investmentsA free trade agreement between Korea and Turkey that went into effect in May 2013 for trading in products, has finally been completed in the realms of services and investments.
The pact will largely benefit Korean builders and cultural content producers.
The two countries held their seventh negotiating session last week in Seoul and succeeded in reaching a “de facto settlement” in service and investments, the Trade Ministry said.
Turkey will lower trade barriers in 18 service industries including construction, engineering, movie and television program production, games, environmental protection and R&D.
Woo Tae-hee, assistant minister for trade and chief FTA negotiator, emphasized that the completion of the Korea-Turkey FTA is an important bridgehead to further business opportunities with nearby markets in Europe and Central Asia at a briefing yesterday at Sejong Government Complex.
“The two countries already entered into an agreement to push for joint construction projects in nearby countries in Europe, Central Asia and the Middle East,” Woo said.
Turkey, which has a strong construction industry, hopes to cooperate with Korea, whose strength is in value-added construction technologies, with an aim to tackle bigger and more challenging projects, Woo said.
Korea also expects to expand its range of Middle Eastern customers through Turkey’s networks. It will use Turkey’s workforce and natural resources, while Korea supplies technology and capital.
In Turkey, Korean builders are currently working on construction projects to build thermal power plants, bridges and an undersea tunnel.
The new FTA agreements do not include any tax benefits, but Korean companies will be treated the same as local companies in terms of the documentation process.
The Turkish government will lift limits on Korean companies’ expansion of business in Turkey. The government will also ease prerequisites and technology standards.
In terms of investment regulations, Korean companies will no longer have to establish a local corporate body before investing.
The two countries also decided to ease requirements for visas for contract-based workers, who work on projects for up to three years.
The lowered barriers will give Korea a more advantageous position than Japan and China in bidding processes, the Trade Ministry said.
Cultural content producers, such as TV program producers and game companies, will be another beneficiary. MBC, one of Korea’s largest terrestrial channels, is reportedly planning to open a branch in Turkey to directly broadcast and distribute its content. CJ Games and other online game companies are also known to want to expand their business there.
Korea is Turkey’s 18th free trade partner, but Korea is its first trade partner to eliminate barriers in services and investment regulations.
According to Trade Ministry data, Korea’s exports to Turkey were $5.7 billion last year, about 24 percent higher than in 2012. Total trade reached $6.4 billion, and Korea saw a trade surplus of about $5 billion.
The countries will sign the FTA on services and investments in the latter half of this year. A final signing and National Assembly screening will be done in the first half of next year.
BY KIM JI-YOON [email@example.com]