- POSTED: 09 Jan 2014 18:44
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Singapore and Turkey will commence negotiations on a comprehensive bilateral free trade agreement (FTA), Prime Minister Lee Hsien Loong announced on Thursday.
SINGAPORE: Singapore and Turkey will commence negotiations on a comprehensive bilateral free trade agreement (FTA).
Prime Minister Lee Hsien Loong announced this at a joint press conference with Turkish Prime Minister Recep Tayyip Erdogan after their meeting on Thursday afternoon.
Mr Erdogan is in Singapore on his first official visit.
He is accompanied by an 80-strong delegation comprising ministers and businessmen.
Mr Lee said instructions have been given to the economic and trade ministers of the two countries to start negotiations on the FTA.
In financial cooperation, both leaders agreed to begin a regular dialogue between finance ministries to engage on issues such as macroeconomic development, multi-lateral cooperation and long-term financing.
The leaders also witnessed the signing of a memorandum of understanding to boost counter-terrorism cooperation.
Mr Lee said: "Prime Minster Erdogan's visit is another milestone in our relationship. Turkey is keen to engage Asia, just as Singapore is keen to strengthen ties in Europe, and Singapore and Turkey can be gateways to our respective regions for the other party."
Bilateral trade between the countries is nothing new.
Turkey is Singapore's 50th trading partner, but Singapore businesses are hoping an agreement could sort out a lot of teething issues that tend to crop up when starting a business in a new country.
Dr Shahzad Nasim, group executive chairman at Meinhardt, said: “I'm quite sure that tax treatment in Turkey is different for foreign countries. So once this FTA is done, I'm sure that will be sorted out. The other (issue) will be entry barriers. I'm sure FTA will deal with those. So if those are sorted out, again, it will make it a lot easier for Singapore companies to set up a business in Turkey.”
According to International Enterprise Singapore, trade between the two countries hit S$1.46 billion in 2012, up 17 per cent from 2010.
Turkey is hoping to export more food, textiles and electronics, while Singapore firms could benefit from wide-scale infrastructure projects, energy investments and a population of more than 70 million.
Ahmet Sami Yavuz, project director at Investment Support and Promotion Agency of Turkey, said: “I think if we sign a free trade agreement within two or three years, we can increase our figures. It should be between the two countries, a figure minimum US$4-5 billion."
Both Singapore and Turkey are strategically located, seen by businesses as gateways to opportunities in new regions.
Dr Shahzad Nasim said: “That has proven true. Within two years we have picked up work within Middle East, in North Africa, and of course we're doing a lot of work in Turkey south -- in Istanbul and many of the other cities.”
Turkey's Minister of Economy Nihat Zeybekci said it will take time to work out the details of the FTA.
But at the end of the day, he is hoping for something that has no boundaries and no protected sectors, and he expects to have something tangible in his hands by the end of the year.
Earlier on Thursday, Mr Erdogan attended a welcome ceremony at the Istana and called on President Tony Tan Keng Yam.
Mr Erdogan also met Speaker of Parliament Halimah Yacob and visited PSA Singapore for a briefing on Singapore's port facilities.
At the Singapore Botanic Gardens, an orchid was named in honour of Mr Erdogan and his wife, Mrs Emine Erdogan.