TOKYO — Japan and Turkey have kicked off negotiations on a bilateral free trade agreement, as Tokyo sees the newly industrialized country as a potentially lucrative market and strategic gateway to other markets in Europe, the Middle East and elsewhere.
Under the proposed FTA —dubbed the Japan-Turkey Economic Partnership Agreement (EPA — the two countries will eliminate import tariffs on most products traded between them. The trade pact, if concluded, will give a significant boost to bilateral trade and investment relations and create new business opportunities for a wide range of sectors, including transportation and logistics.
Government officials from Japan and Turkey held their first round of FTA talks in Tokyo on Monday and Tuesday to exchange their views on a broad range of negotiating areas such as trade in goods and services and how to proceed with future talks.
Japan exported $3.453 billion worth of products to Turkey and imported $409 million worth of goods from Turkey in fiscal 2013, which ended in March 2014, according to the Japanese Foreign Ministry. Japan’s direct investment in Turkey totaled $490 million in fiscal 2013.
Turkey has a relative large population of about 77 million and a growing number of Japanese companies are interested in making Turkey a production base for exports to the European Union as well as neighboring markets, the ministry said.
Yusen Logistics Co. has also made Turkey one of its priority areas for operations in its current medium-term management plan. The company acquired a stake of about 32 percent in Turkey’s Inci Logistics in September through its local subsidiary, Yusen Logistics Turkey Lojistik Hizmetleri Ltd. Sti., to strengthen its footprint in the Turkish market.
Yusen Logistics is the logistics arm of Nippon Yusen Kabushiki Kaisha (NYK Line), Japan’s largest shipping firm by sales. Yusen Logistics is one of the nation’s three largest international freight forwarders, along with Nippon Express Co. and Kintetsu World Express Inc. (KWE).
The first round of FTA negotiations was held about 11 months after Shinzo Abe, the Japanese prime minister, and Recep Tayyip Erdogan, then the prime minister and now president of Turkey, agreed in January to start such negotiations.
In the future FTA talks, Japan will specifically call for Turkey to eliminate import tariffs on automobiles, electric appliances and other industrial products and also ease investment regulations.
Turkey, for its part, is expected to specifically urge Japan to remove import tariffs on fishery and textile products, including tuna and carpets. Japan’s import tariff rates for most industrial products, including autos, are already zero.
South Korea already saw its FTA with Turkey enter into force in May 2013, giving South Korean automakers and electronics manufacturers an advantage over their Japanese rivals in the Turkish market.
Japan has FTAs in force with 12 countries and the 10-member Association of Southeast Asian Nations (ASEAN). In July, Japan also signed an FTA with Australia and reached a basic agreement in FTA talks with Mongolia. The Japan-Australia FTA is expected to take effect early next year.
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