According to Yonhap News,

(ISTANBUL = Yonhap News) Korea’s exports to Turkey have seen a dramatic increase since the effectuation of a free trade agreement (FTA) between the two countries.

Korea’s exports to Turkey increased by 36.2 percent for the six months after the effectuation of the FTA, surpassing the country’s total export growth rate of 2.9 percent during the same period, according to the Istanbul office of the Korea Trade-Investment Promotion Agency.

After the Korea-Turkey FTA went into effect in May, Korea’s exports to Turkey in May – October totaled USD 2.966 billion (approximately KRW 3.1 trillion), which represents a 36.2 percent increase from USD 2.178 billion during the same period in 2012.

By export item, chemical product exports rose 94.3 percent YoY to USD 682 million. Chemical product exports to Turkey were favorable even before the effectuation of the FTA, posting 20.5 percent growth during the four months before the FTA went into effect.

Exports of synthetic resins, in particular, saw a dramatic increase as the customs tariff of 6.5 percent was lifted immediately with the effectuation of the FTA.

Textile exports were up by 16.9 percent YoY to USD 189 million.

Because the customs tariff on fabrics (eight percent) will be phased out over the next five years, the increase in textile exports can be attributed to the elimination of the 20 percent protective tariff as a safeguard measure rather than the customs tariff reduction.

Machinery exports, on the other hand, recorded relatively low growth of 11.5 percent due to minor tariff reduction and poor local market conditions.

Korea’s total export volume rose by 0.3 percent during the four months (January and April 2013) leading to the effectuation of the FTA, but exports to Turkey during the same period showed a negative growth rate of -0.9 percent. It shows that exporters waited until the FTA took effect and custom tariffs were removed, and hence the dramatic increase of exports in the following months.

The growth rate of imports from Turkey was 9.9 percent between May and October, exceeding the Korea’s overall import growth rate of -0.3 percent. However, the high import growth rate is attributable to a low base effect from the January – April figure of -15.3 percent.

Imports from Turkey from the period of January to October this year stood at USD 559 million, representing a slight decrease from USD 570 million in the same period last year. Therefore, the FTA had little effect on imports from Turkey.

The trade volume between Korea and Turkey still remains relatively small, as it only accounts for one percent of exports and 0.13 percent of imports in Korea’s global trade volume.