Leaders also agree on Seoul’s participation in $2b thermal power project


South Korea and Turkey on Sunday agreed to resume stalled negotiations on Ankara’s project to construct a nuclear power plant and seek an early conclusion of bilateral free trade negotiations, possibly in the first half of this year.

The agreement was made during talks between President Lee Myung-bak and Turkish Prime Minister Recep Tayyip Erdogan in Istanbul, Turkey ― the first leg of Lee’s eight-day tour that includes visits to Saudi Arabia, Qatar and United Arab Emirates.

On Monday, the leaders of the two countries agreed that Seoul would participate in Ankara’s $2 billion project to build a thermoelectric power plant.

During the talks, the Turkish prime minister expressed “strong hope” for Seoul’s participation in his country’s nuclear plant construction project.

Turkey plans to build four nuclear reactors in Sinop on the Black Sea coast. It hopes Korea will construct two of them on the condition that Seoul recoups the construction cost by selling electricity generated from the plant.

The two sides began talks after they signed a memorandum of understanding on the project in June 2010. The negotiations were halted as they failed to reconcile differences over the location of the plant, electricity rates and other issues.

Seoul believes that electricity prices are crucial to ensure it can recover its investment, and that the location of the envisioned plant needs to be moved as it lies on a seismic belt.

During a summit with Lee on the sidelines of a G20 summit in France in November, Erdogan first called for the resumption of the negotiations.

“It appears that Turkey has an intention of seeking a compromise over the differences given that it demands the resumption of the negotiations over the nuclear power plant project,” said presidential press secretary Choe Geum-nak.

Should Seoul participate in the Turkish project, it would be Korea’s second export of nuclear reactors. In December 2009, Korea signed a $20 billion deal to build four nuclear reactors in the United Arab Emirates by 2020.

After Lee’s trip to Turkey, the free trade negotiations between the two countries are expected to gain momentum.

“There are no special hurdles in the goods sector. (The two countries) agreed to engage in full-scale negotiations with an aim to conclude them within the first half,” said Choe.

After Turkish President Abdullah Gul made a proposal in 2008 to study the feasibility of the bilateral FTA, the two countries conducted joint research between 2008 and 2009.

Since the two sides announced the beginning of their official negotiations in March 2010, they have held three rounds of negotiations. Differences in the services and investment sectors remain.

“Our government believes that as there are not many items that overlap with regard to agricultural and fishery products, they will not be a serious hurdle in the efforts to conclude the bilateral FTA. Differences in the services and investment sectors can also be addressed,” a senior Seoul official said, on condition of anonymity.

The bilateral FTA is expected to further cement the long-standing friendship between the two countries, established their diplomatic ties in 1957. During the 1950-53 Korean War, Turkey sent to South Korea the fourth largest number of troops after the U.S., Britain and Canada.

The Eurasian state of 73.27 million people has been one of the world’s fastest-growing economies despite the global economic challenges. Its economy grew 9 percent in 2010 and 8.2 percent in the third quarter of last year. Trade volume between the two countries was recorded at $5.9 billion last year.

On Monday, Lee and President Gul agreed to establish a “comprehensive, future-oriented strategic partnership” during their summit talks.

By Song Sang-ho (sshluck@heraldcorp.com)