Free Trade Agreement signed by Turkey and South Korea

Mr Zafer Caglayan economic minister of Turkey has signed a Free
Trade Agreement (FTA) with Mr Taeho Bark, South Korea, with the result that
within seven years the country (Turkey) will remove customs duty on South Korean iron
and steel, automotive, electronic appliance and textile products. 

South Korea will remove its customs duty on Turkish iron and steel, textiles
and ready to wear clothing as soon as the agreement, signed on 1 August, is in
effect, while automotive customs duty will be removed within five years.

Mr Yayan, general secretary of Turkish Iron and Steel Producers'
Association said (in an interview to steel orbis) that South Korea has serious advantages over Turkey
mainly in terms of stainless and high quality steel but he said he believes
that the Turkish steel industry will be able to catch up thanks to its dynamic
structure in the seven years it has to remove the customs duty for steel
products.

Mr Yayan also touched upon the stainless cold
rolled investment of Turkey's Kibar Holding in the northwestern Turkish city of
Kocaeli, jointly with South Korea based POSCO saying “We would like the
POSCO-Kibar JV to produce raw material for stainless steel production in Turkey
in the coming period.”

He stated that the general belief in the industry
is that the South Korean companies save the added value they produce for
themselves and do not leave any for other markets; however, he believes that
POSCO will not act in this way. This kind of relation is not sustainable,
because then you will lose your partner.

Regarding the ability of the Turkish steel
industry to compete with South Korea, Mr Yayan underscored that the Turkish
steel industry has maintained its rapid growth without any government support
and that Turkey's steel production has increased by 155% in the last 15 years
while global steel production, excluding China increased by 30%. He stated that
the Turkish steel industry should be freed from artificial burdens such as
state imposed contribution margins and non controllable expenses adding that
only then will Turkish producers succeed in competing on more equal terms.