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Turkey eyes Mercosur trade talks this year - Kayalar

Reuters | Friday May 23 2008

Turkey eyes Mercosur trade talks this year-Kayalar

By Hatice Aydogdu

ANKARA, May 23 (Reuters) — Turkey aims to start negotiations this year over a free-trade agreement with Mercosur, the South American trade bloc, Turkish Foreign Trade Undersecretary Tuncer Kayalar told Reuters.

Turkey wants to boost its exports to trim a huge current account deficit, which is seen as the fast-growing economy’s main weak spot and undermines investor confidence in Turkish markets. The trade gap is estimated at $73 billion this year, contributing to a current account deficit which the treasury forecasts at around 6.5 percent of gross domestic product.

Kayalar said that exploratory talks over a free-trade agreement with the bloc were carried out in Buenos Aires in April, after an initial initiative in 2007.

"The two sides have made clear their intention to continue work towards a free-trade agreement and to start negotiations for a free-trade agreement in 2008," he told Reuters in an interview, adding that a framework agreement was expected to be signed at a Mercosur summit in Argentina at the end of June.

"After the framework agreement is signed, the target is to start negotiations for a free-trade agreement between our country and Mercosur in 2008," he said.

Mercosur comprises full members Argentina, Brazil, Paraguay and Uruguay, with Venezuela awaiting approval to join. The trade group signed a free-trade deal with Israel in December last year, its first pact with a country outside Latin America.

Turkey is also planning a free-trade deal with Chile, an associate member of Mercosur, and a second round of negotiations would be held in Ankara between July 9 and 11, following a first round in March, Kayalar said.

According to data from the trade undersecretary’s department, Turkish exports to Mercosur countries amounted to $171 million in 2006, rising to $304 million in 2007. Imports from Mercosur members amounted to $1.263 billion in 2006, and $1.629 billion last year.

(Editing by Stephen Nisbet)

 source: Reuters