TRADE RELATIONS WITH ASIA-PACIFIC COUNTRIES

Our main objective in our relations with Asia-Pacific countries is to have a more balanced trade relationship structure while developing our bilateral relations

Asia-Pacific countries are among the most important areas in which Türkiye attaches importance in its foreign trade policy. The most important reason for this is our high foreign trade deficit with the region. While the region’s share in Türkiye’s total imports is 24 percent, its share in our total exports has remained at a very low level of 5 percent.

As of 2023, our total foreign trade deficit is 106.4 billion dollars, of which 72.6 billion dollars, in other words, 68 percent, is due to our trade relations with this region. Therefore, as a country and as DEİK, our main goal in our relations with the region is to have a more balanced commercial relationship structure while improving our bilateral relations.

As of 2023, the countries we import and export the most and the countries with the highest foreign trade deficit are shown in the tables below. As can be seen from the table, we have a foreign trade deficit against every country in our relations with the region. The largest foreign trade deficit is against China, which we import the most. In 2023, our foreign trade deficit against China alone accounted for about 40 percent of our total foreign trade deficit. The ratio of our exports to imports is 7.3 percent against a country where our exports are 3.3 percent. Such a high deficit against a country from which we do not import energy is an issue that needs to be emphasized.

In terms of sectors, electrical appliances, machinery, iron and steel, automotive and organic chemicals, in other words, according to a broad economic comparison, both consumer goods and intermediate goods and investment products come to the forefront in our imports from China. When we look at other countries, there are only 3 countries where our exports exceed the threshold of 1 billion dollars: China, India, and South Korea. In general, this picture shows that as a country, we need to give more importance to this geography.

In 2013, the Ministry of Trade put into force the Free Trade Agreement with South Korea, one of the countries in the region, and later added provisions covering investment and services to this agreement as of 2018. This was followed by Free Trade Agreements signed with Malaysia in 2015 and Singapore in 2017. However, despite these agreements, we still have a trade deficit with these countries, which calls for more careful negotiation of free trade agreements. Negotiations on Free Trade Agreements or Preferential Trade Agreements with Japan, Thailand, and Indonesia are being carried out by the Ministry of Trade.

Another important work of the Ministry of Trade concerning the region is the Distant Countries Strategy. Two-thirds of Türkiye’s exports are to relatively close countries such as European countries, the Middle East and Gulf region, and North Africa. With this structure, the average range of our exports is 3065 km, which is below the world average of 4744 km. With the distant countries strategy, we aim to increase our exports to these geographically distant and high-income countries. The strategy document and action plan were prepared for a total of 18 countries including 11 Asian countries. Asian Countries Covered by the Distant Country Strategy: China, Pakistan, India, South Korea, Japan, Vietnam, Thailand, Malaysia, Philippines, Australia, and Indonesia.

The Regional Comprehensive Economic Partnership (RCEP) Agreement is another area where we should attach importance to developing our trade relations with the region. This new group of 10 countries (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam), which was formed by the addition of 5 new countries (China, Japan, South Korea, Australia, New Zealand) to the ASEAN group of countries, stands out as the largest trade bloc as it accounts for 30 percent of the global population and 30 percent of the global GDP. It is also of particular importance as it is the first and only agreement in which China, South Korea, and Japan, the three most powerful economies of the region, are involved. The RCEP agreement includes provisions in 20 different chapters ranging from trade in goods, trade in services, mutual investment, intellectual property rights, e-commerce, public procurement, and dispute settlement.

This agreement between the RCEP countries has important implications not only for the region but also for global trade. In this framework, it is considered that our country should consider these issues while developing its trade relations with the countries in the region and negotiating agreements such as free trade agreements or preferential trade agreements with the countries in the region. Finally, in our relations with the region, we should consider not only mutual trade in goods but also trade in services, especially tourism, mutual investments, and cooperation opportunities in third countries.

I consider the investment of Chinese electric vehicle manufacturer BYD in Türkiye and the negotiations with other companies conducted by our Ministry of Industry and Technology as important steps in this context.