Turkey has high hopes for first FTA with a Latin country

Turkish Foreign Trade Minister Zafer Çağlayan and Chilean Foreign Minister Mariano Fernandez signed the agreement, with Chilean President Michelle Bachelet Jeria in attendance.

President Jeria spoke highly about the prospects of improved trade relations with Turkey, mentioning Turkey's potential in terms of its location in the middle of major markets and its economic strength.

Cultural ties between the nations have developed in recent times thanks to the rapid improvements in telecommunications and transportation, making distances irrelevant, Jeria said. The president praised Turkey's energy and efforts to rise as an economic power. "I watch with admiration," she said, "because Turkey is a country that has managed to emerge as one of the 15 largest economies of the world, overcoming many hurdles in its path."

Jeria had remarks on the political implications of the FTA deal, too. She said this agreement will be one of the factors to bring the two nations closer to one another. "The deal will make it possible for 98 percent of products to be freely traded in both countries. And this rate will climb to 100 percent in the next six years," the president said.

She noted that the FTA will benefit Chilean companies in sectors such as mining, pomiculture, forestry and fisheries, helping many families relying on these sectors to enjoy higher earnings thanks to increasing trade with Turkey through the FTA. "This deal will provide us with an unexpected opportunity to get closer to a thriving market and to supply it with our products," she noted. In addition, Chile may be a useful partner for Turkey in return, Jeria noted. Although it has only 16 million people, Chile has a very fertile network of commerce with its neighbors in the region, she said, adding, "We see ourselves as a platform to help you reach other markets in Latin America."

The president also invited Turkey to take part in a number of large state investments, such as port construction and security enhancement, strengthening the country's defenses through procurement of weaponry, armaments, improving the conditions of security forces, police and military.

Following the speech by the president, Çağlayan addressed the audience, describing the deal as a strong message to the world at a time when protectionist policies in international trade are spreading due to the severe global crisis. "If there is a global crisis, there must be a global solution," he said.

The signing of the FTA deal was an initial step by politicians to get the ball rolling, and it is now the businessmen's turn to carry relations to higher levels, he asserted. "The two countries have now found a chance to combine their powers and to offer benefits to each other as well as to the rest of the world," Çağlayan noted. The Turkish minister also said that Chilean politicians want Turkish Airlines (THY) to initiate direct flights to Santiago. "We will try to make this a reality as soon as possible since it is extremely important in terms of cargo transportation and tourism," he said.

After the signing ceremony, he held a joint press conference with the Chilean foreign minister and revealed more details about the agreement. The FTA will trigger rapid development in mutual trade especially in energy, the defense industry, construction and tourism, Çağlayan underlined, adding that the trade volume will at least double in the short run. According to the deal, Chile will immediately remove all customs duties for Turkish industrial goods. The customs taxes will be lowered to zero percent for 95 percent of the products flowing from Turkey in the short run while the taxes for the remaining 5 percent will be rounded off in the next five years.

The FTA deal also envisages the opening of trade representative offices by both countries in each other. Chileans will organize two fairs in İstanbul and Ankara.

Çağlayan and Fernandez later attended a Turkish-Chilean business forum and delivered a speech to participating businessmen from both countries. He promoted Turkey's investment opportunities while praising its economic stability and called on Chilean entrepreneurs to invest in Turkey.

Fernandez also spoke, saying the FTA deal with Turkey is a step that will open many doors for Chilean exporters. "The creation of an FTA with an important European country is quite a significant opportunity for us," he said, adding that this will also make it possible for them to enter the vast Asian markets.