BY BESTENIGAR KARA
Turkiye and Japan marks the 100th anniversary of diplomatic relations this year. Based on the centennial history of amicability and friendship, the two countries have the potential to boost bilateral trade and deepen economic ties further. The Free Trade Agreement (FTA), International Social Security Agreement, and collaboration in third countries, notably in Africa, in different industries are among the elements that can achieve it, according to Kenichi Kasahara, Consul General of Japan in Istanbul. “Turkish businesses are successful in certain sectors in Africa. Japan has been trying to strengthen its relations with Africa, where Japan and Turkiye can do business together. It’s one of the targets of the Japanese government,” Kasahara said in an exclusive interview with TR MONITOR.
>> Would you elaborate on the development of bilateral trade between Turkiye and Japan?
The bilateral trade volume between Turkiye and Japan jumped 46.53% from USD 4.17bn in 2013 to USD 6.11bn in 2023, according to the Turkish Statistical Institute (TurkStat). Turkiye’s exports rose by 55%, while Japan only enjoyed a 46% hike in exports in dollars in this period, meaning that the trade deficit against Turkiye shrank. Of course, the figures also depend on FX rates. The yen and lira have been bumpy. In January-June 2024, the trade volume between the two countries totaled USD 2.78bn. Fishery and animal products, cereals, legumes, oil seeds and their products, mining products, automotive industry, chemicals, and chemical products are the top export items to Japan. The automotive industry, machinery and their parts, electrical and electronics, steel, chemicals, and their products are the most outstanding import items from Japan. Japan primarily imports tuna fish, an essential ingredient of sushi. The Mediterranean or Aegean tuna fish is known for the high quality of its meat. Japan also exports food products such as soy sauce to Turkiye.
The food sector is of common interest to both Japan and Turkiye. Agricultural products, including grains, namely pasta, olive oil, and tomato paste are exported by Turkiye to Japan successfully. There is room for the export of Turkish products to Japan, including olive oil, spices, nuts, and fruits.
At the Consulate General of Japan in Istanbul, we strive to promote Japanese cuisine in Turkiye. With a population of 85 million and a big number of foreign tourists, which reached 56.7 million last year, Turkiye offers a huge a potential making it a very lucrative target to promote Japanese cuisine.
Kenichi Kasahara, Consul General of Japan in Istanbul (on the right), and Hiroki Ishii, Vice-Consul of the Economic Section at Consulate General of Japan in Istanbul (on the left), hosted TR MONITOR Associate Editor Bestenigar Kara to discuss bilateral economic and political ties between Turkiye and Japan in light of the 100th anniversary of the establishment of diplomatic relations between the two countries.
>> How many Japanese businesses operate in Turkiye?
Around 300 Japanese companies operate in Turkiye. According to a business official, the volume of their operation hovers around USD 4.7bn. We generally have a gradual increase in the number of Japanese firms operating in Turkiye. The Japanese business world concentrates on automotive, transportation vehicles, motorcycles, electrical devices, major appliances, food, trade, machinery, and agricultural machinery sectors in Turkiye. From these sectors, Toyota and Yanmar are among the top companies. Yanmar launched its second manufacturing plant in Izmir last year. It seems very interesting that we see more Japanese pharmaceutical firms in Turkiye. For instance, the Japan-based Rohto Pharmaceutical became the partner of the cologne producer Rebul Holding in 2019. The holding company’s exclusive brand, Atelier Rebul, expanded into Japan in 2021 with a cologne collection specific to Japan.
>> What are the potential sectors in which the two countries can cooperate?
The green economy, including green technology and renewable energy, seismic isolation technologies, and smart cities, are among the potential sectors in which the two countries can cooperate. The seismic isolation technologies industry is critical, especially after the February 6 twin quakes. Such disasters keep reminding us that we should be ready as much as possible and must watch every segment of society. One of the ideas is to make new and existing buildings resistant to seismic activities. One of the solutions is extra bracing from inside or outside of the building by adding joints. A Japanese company, Kawakin Core-Tech Co., Ltd., is operating in this business line and trying to build a factory in Turkiye as soon as possible. Kawakin Core-Tech can produce those braces for buildings in Turkiye.
On the other hand, many Japanese firms seek to do business in the green energy industry in Turkiye or do the same business with Turkish companies in Turkiye and abroad. Japan and Turkiye can collaborate more in the third countries around Turkiye. The Turkish business world knows more about the surrounding regions, including Europe, the Black Sea, the Caucasus, Central Asia, the Middle East, and Africa. With the Japanese technologies being developed and the Turkish knowledge and experience about the neighboring regions, we can do good business in the green energy sector in the coming days.
Moreover, Africa is a huge market with millions of people and 54 countries. Japan has been in a dialogue with Africa for over 30 years to enhance and strengthen relations. We observed that Turkish businesses succeed in specific sectors in some parts of Africa. I believe that Japan and Turkiye can cooperate in Africa. That’s one of the targets of the Japanese government.
>> Which topics constitute the potential political and economic cooperation opportunity between the two countries?
Turkiye and Japan should have been at a higher stage by now regarding the possibilities they could have had, namely the Economic Partnership Agreement (EPA), basically referred to as FTA. The two countries have negotiated for the EPA for almost a decade. Although negotiations have been interrupted due to the pandemic, both our leaders have agreed to continue negotiations towards a conclusion.
The International Social Security Agreement has also been negotiated for years. Without that agreement, if a Japanese firm wants to invest and hire people in Turkiye, it must make a social security payment to the Turkish government. At the same time, a Japanese citizen residing in Turkiye should pay to Japan as well. For exemption from these payments, Turkiye and Japan need an agreement. It’s not a major factor; however, it will help Japanese firms to invest in Turkiye.
>> How would you describe Turkiye’s current investment environment to a potential investor?
Turkiye has a geographical advantage, a qualified labor force, a young population with an average age of 33, an excellent climate and food products, and fertile land. There is a huge potential and opportunity in Turkiye. All we need to do is bring Japanese investors to Turkiye to experience the country, people, culture, and vice versa. Turkish Airlines has three direct flights a day to Japan. On top of that, the Japan-based All Nippon Airways will start flights to Istanbul as of February 12, 2025. So, there will be a higher chance of attracting investors and tourists from both countries.
>> What type of activities does the Consulate General of Japan in Istanbul run to deepen economic relations?
We find our counterparts in Turkiye to help us learn about the market. On the other hand, the Turkish Embassy in Tokyo is also doing a good job finding Turkish businesses to operate in Japan.
On our side, the Japanese Embassy in Ankara and we are talking with Turkish businesses and organizations like the Foreign Economic Relations Board (DEIK). The Japanese Embassy in Ankara also holds talks with the Turkish government and its bodies.
>> What is your current main agenda as the Consulate General of Japan in Istanbul?
Turkiye and Japan celebrate the 100th anniversary of the establishment of diplomatic relations. We promote and organize many cultural events, seminars, speeches, and festivals. Our agenda is to make the Turkish people aware of Japan and to strengthen and develop relations between our countries. We have enjoyed 99 preceding years amicably. I want the next 100 years to be as friendly as previous years and further successful in all areas. At the same time, I aim to attract more Japanese citizens, especially business people, to Turkiye. To do so, I would like to make a better impression of Turkiye on the Japanese public. We host cultural events and other organizations to make Turkiye newsworthy in the Japanese press. In every sector, we have been trying to promote Turkiye in Japan. That’s also the one of the agenda for the Consulate General of Japan in Istanbul.
