A free trade agreement with Turkey will not likely have significant benefits for the South Korean economy as its impact on growth, tax reduction and job creation might remain marginal, a report showed Monday.

South Korea and Turkey had held four rounds of FTA negotiations since April 2010 and both announced the conclusion of their talks on trade of products in March.

The two countries plan to conclude negotiations on the service and investment sectors as well within a year of implementing their deal on the trade of products.

According to the report by the Korea Institute for International Economic Policy, an FTA with Turkey would translate into a 0.01 percent increase in South Korea’s gross domestic product in the short term.

The additional growth impact will rise to 0.03 percent in the short term, said the report, which was commissioned by the Finance Ministry.

On the labor market, an FTA with Turkey would result in generating 253 and 1,391 jobs in the short term and the long term period, respectively, the report showed.

Tariff reduction impact would also be marginal. For the first five years of the implementation of a Korea-Turkey FTA, tariff tax income will decline by 26.44 billion won ($24.25 million) on average every year, the report said.

It is quite small compared with the country’s total tariff income of some 11 trillion won, it added.

The KIEP explained that such an insignificant impact from free trade with Turkey could be attributable to the European country’s relatively small size of the economy and already low tariff barriers of both trading partners. (Yonhap News)