South Korea and Turkey on Thursday signed a free trade agreement in the investment and service sectors that will complement their bilateral trade pact that went into effect nearly two years ago.
"As the chapters in service and investment have been signed, the Korea-Turkey FTA that has been limited to products will become a comprehensive and high-level FTA," the Ministry of Trade, Industry and Energy said in a press release.
The countries implemented their bilateral FTA for products in May 2013 after they failed to narrow their differences in the service and investment sectors.
Negotiations for an FTA in those two sectors were concluded in July 2014 and once implemented, the agreement will mark Turkey's first-ever FTA in non-product sectors. The country has so far signed 17 FTAs that only deal with products, the ministry said earlier.
The agreement for the service and investment sectors will open up most of Turkey's service market with only a handful of areas excluded from market liberalization, such as including government procurement and airline services, according to the ministry.
It will also prohibit any type of restrictions on market access while also requiring both countries to streamline their regulations with international norms, according to South Korean news agency Yonhap.
Once implemented, the Korea-Turkey FTA for service and investment is expected to help boost the countries' bilateral trade while also raising South Korea's gross domestic product by 0.01 percent over a 10-year period.
"Since the implementation of the agreement for products in May 2013, trade between the two countries has expanded significantly," the ministry said. "We believe the countries' bilateral trade will further expand once the agreement for the service and investment sector goes into effect." The agreement requires approval from the countries' respective legislatures before it can be implemented.
The Seoul government said it will soon submit a ratification bill to the National Assembly to have the FTA implemented at the earliest date possible.