Singapore-Turkey FTA Talks Progressing Despite Service Sector Concerns

October 22, 2014 Posted by ASEAN Briefing Reading Time: 4 minutes

SINGAPORE – Negotiations for the Singapore-Turkey FTA are “making good progress” and are near finalization, said Singaporean Prime Minister Lee Hsien Loong during his official four-day visit to Turkey last week. The PM was speaking at a lunch meeting focused on strengthening trade and business ties between the two countries from which over 70 officials and business leaders were in attendance.

Singapore, which is currently upgrading its economy, has been looking to attract more foreign investment, as well as seeking new opportunities to invest abroad. Attracted by Turkey’s economic growth and strategic location that traverses Europe, Central Asia, and the Middle East, the city-state will be pushing for a comprehensive agreement.

Turkey, meanwhile, is keen to tap into the Asia-Pacific region, particularly ASEAN, which should see the ASEAN Economic Community (AEC) completed by the end of next year. However, concerns have been raised regarding Singapore’s superior services sector, and the transcontinental republic will most likely be hoping for a narrower FTA.

“The goods part is more or less negotiated. The services part always will be more difficult, but that is where there will be greater dividend,” said Mr Lee. “If we can overcome these difficulties, we will be able to do more together.”

Talks were launched following Turkish President (then Prime Minister) Recep Tayyip Erdogan’s visit to Singapore in January. Although both economies have a combined size of US$ one trillion, total bilateral trade between the two stood at a modest US$1.12 billion in 2013. Both Mr Lee and Turkish Economy Minister Nihat Zeybekci have agreed there is much scope for greater cooperation.

Optimism that the FTA will be finalized next year remains high. In the meantime, both countries have agreed to upgrade their bilateral relations status to that of strategic partners.

“Excellent progress has been made so far,” said Singaporean Trade and Industry Minister Lim Hng Kiang. “When completed, businesses will be able to make use of a high quality FTA that will see lowered tariffs and liberalization of a wide variety of sectors.”

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