TÜRKİYE-JAPAN BILATERAL ECONOMIC RELATIONS

Türkiye’s exports to Japan is 664 million dollars and imports from Japan is 3.74 billion dollars in 2022. As a result of structural differences and distant geographical locations of our respective economies, there is a big trade imbalance apparently. Turkey mostly exports consumer goods such as foodstuff and apparel or raw materials whereas imports capital goods and intermediate goods such as machinery and auto spare parts from Japan. The good point is that imports from Japan are helping Turkish industry to export to Europe and other countries within our periphery.

In fact, the trade deficit is balanced with foreign direct investment from Japan to Türkiye. At the moment, there are 259 Japanese companies (such as Toyota, Mitsubishi Electric, Bridgestone, Nisshin Seifun) with total investment of 3.3 billion dollars. Japanese investments are concentrated in manufacturing industry and exporting more than 80% of their produce.

There are two important agreements relating to investments which are already in force between two countries. One is Agreement on Promotion and Protection of Investments and the other is Avoidance of Double Taxation Treaty.

Two more agreements are on the pipeline: Agreement on Social Security and Economic Partnership Agreement.

The EPA is a comprehensive one. It covers free trade in goods, services and investments. Therefore, it will eliminate barriers to trade and will provide more transparent and predictable rules for investment and services, including energy sector. Negotiations are ongoing and pending political contribution to clear out final problematic areas on the table.