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Japan and Turkey: The Contours and Current Status of an Economic Partnership/Free Trade Agreement

As the third largest economy in the world, Japan cannot be overlooked in any analysis of Asia’s importance in international geopolitics and the global political economy. The ties between Japan and Turkey – whether diplomatic, political, economic or societal – span the breadth of Asia. Those ties have become more numerous and consequential in monetary terms over the last half-decade. Although the relationship has not been a top priority for either country, awareness of the potential for mutual gain as a result of more trade and investment has a history of at least three decades. This article surveys the current economic and trade relationship between Turkey and Japan, paying particular attention to recent notable Japanese investments in Turkey and the preliminary positioning of trade representatives in advance of a proposed Free Trade/Economic Partnership Agreement.

Japan and Turkey The Contours and Current Status of an
Turkish Prime Minister Recep Tayyip Erdogan reviews the guard of honor with Japanese Prime Minister Shinzo Abe during a welcoming ceremony held by Abe at Akasaka State Guesthouse in Tokyo, Japan. EPA / Kimimasa Mayama
 

Introduction1

As the world’s third largest economy, strategically proximate to China, and firm friend of the US, Japan is by any measure a crucial force – albeit an economic rather than a military one – in the Asia Pacific and East Asia. In keeping with the theme of this issue, therefore, the position and economic potential of the countries in the Asia Pacific may extend in importance even more visibly and consequentially outside of the region, – most likely in coalition with friends and allies, as it already does (as measured by economic engagement with countries that, collectively, span the globe). In keeping with this issue’s examination of domestic and international developments relating to the Republic of Turkey, this article narrows its attention to recent and likely future events that have brought Japan to engage with Turkey. 

With respect to both Japan and Turkey, the focus of this article encompasses both private parties (companies engaged in bilateral trade and investment) and especially the governments of these two countries. The Japanese and Turkish governments and their respective ministries and quasi-governmental actors simultaneously lead and follow the flow of capital, goods and services, seeking to facilitate their movement and formalize bilateral relations into an Economic Partnership Agreement (EPA). For the purposes of this article, EPA and Free Trade Agreement (FTA), the parlance used elsewhere, will be treated as synonymous and interchangeable. Over the last three years, the private sector has on balance been the initiator of enhanced trade relations, but both governments have instead responded to the business lobby and taken their own initiatives, particularly in the area of nuclear power. 


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