Amid the rise of Korean export in services, the focus has been placed on China, the US, and Japan. Korea needs change in its strategies to diversify markets to other prominent emerging countries, such as Turkey. The Korean government has set its policy goal to increase services export to the amount of USD 1.5 billion by 2022 and create a trade surplus in the sector. In accordance with this goal, the Korean government is creating an ecosystem for services enterprises, reorganizing the system to support services, eliminating foreign entry barriers through FTAs, and customizing strategies for overseas expansion. However, the cost of trade in services for Korea is relatively high, compared to other countries with strength in services trading, meaning that competitiveness remains rather low. The reason for this low global competitiveness in trade in services is the underperforming productivity in this area mostly led by SMEs.
   The Agreement on Trade in Services and the Agreement on Investment between Korea and Turkey came into effect in August 2018. It took a long time to “upgrade” into a comprehensive high-leveled FTA. The services agreement follows a positive list approach. Both Korea and Turkey have agreed to open their services market to a higher level than that of the GATS under the WTO system. Although the new agreements are designed to reinforce Korean and Turkish economic cooperation in the services industry, as of yet not much research has been done on the subject.
   This study aims to analyze the current status of the Turkish services industry and to seek prominent sectors for both Korea and Turkey, as well as to find cooperative measures to maximize the synergy effect. Particularly, this study contributes to realistic cooperative measures in the services sector, performed by joint research between Korean and Turkish researchers. Beginning with the introduction, Chapter 2 takes an in-depth look into the importance of the services sector in Turkish economy. Chapters 3 and 4 deal with the construction sector and cultural contents sector, reviewing the overall industry, related policies, current situation and market growth potentials. Chapter 5 explores how to utilize the Korea-Turkey Agreement on Trade in Services, by showing the pathway of services cooperation in general and in selected sectors, with suggested strategies for Korean companies to enter into the Turkish services market.
   Turkey signed into its first FTA including the services sector with Singapore in 2015, which came into effect in October 2017. The agreement includes liberalization of trade in goods, services, investment, e-commerce, competition, transparency, etc. When the Korea-Turkey FTA came into effect in May 2013, trade in services and investment chapters had not been included until February 2015, and only came into effect in August 2018. This agreement is an advanced version of GATS bindings, guarantees market access to services providers in both Korea and Turkey, and provides a rule-based stable environment for investors in services. It allows both countries to enter into their counterpart’s market to enjoy economies of scale and spillover effect. Cooperation between various services sectors in Korea and Turkey would provide great possibilities by expanding geographical and cultural limits. In this sense, the widening of the Korea-Turkey FTA to the services sector is a welcoming opportunity for both countries. Korean companies, which have strength in the knowledge-intensive fields, could create better possibilities with Turkish local companies, utilizing the strengths of their competent working population and superb infrastructure.
   Abolishing trade barriers in the services sector would not only be profitable in the short run, but also beneficial for both countries in the long run by serving as an entry point for nearby markets. It would also have the ripple effects of accelerating transfer of skill, knowledge and experiences, and enabling possibilities to gain additional access to other markets. If the Korea-Turkey FTA is sufficiently utilized, it would enhance bilateral services in trade, as well as generating a positive effect in trade in goods. The benefits realized by this increase in services trade would not be limited to the economy but also strengthen social and cultural ties between Korea and Turkey.
   Turkish construction companies have been showing excellent results in winning overseas construction contracts since 2000. The Korea-Turkey FTA can maximize mutual benefits in the services sector. Here we suggest measures for Korea-Turkey cooperation in the construction sector.
   First, Korean and Turkish construction companies can form a consortium for joint entry into overseas construction markets. Turkish construction companies have a strong presence in the Middle East, Africa, Russia, CIS countries, etc. If Korea and Turkey could form a consortium to enter into these countries, it would improve their industrial competitiveness and enable expansion into a wider range of overseas construction markets.
   Second, the knowledge-based R&D field of Korea could be combined with the Turkish construction sector to complement the education level and lack of R&D investment in the Turkish construction industry. These kinds of cooperation will have positive effects in the labor market of both countries.
   Third, Korea and Turkey can cooperate in the manufacturing sector to add value in the construction sector. The close relationship that the manufacturing sector holds with the construction sector could generate a synergy effect. As of yet Korea and Turkey account for only a small share in terms of value added in each other’s construction market, but the expansion of their FTA in 2018 will enable cooperation in industrial sectors, such as metal manufacturing, metal process manufacturing other than machinery and equipment, and strengthen value added creation in the construction sector by building a closer link in the global value chain.
   Fourth, financial cooperation in the construction sector between the two countries would ease order imbalances and facilitate financing, adding stimulus to the construction industry in both countries. Turkey has recently been experiencing temporary financing challenges in new projects, due to the excessive supply of housing. By cooperating with Korean companies, the Turkish construction sector can enjoy sufficient financial support from Korea, while Korea can increase value added through these channels.
   Fifth, due to the Korea-Turkey FTA in services and investment more opportunities will be made available to take part in the Turkish infrastructure building market. Turkey, being a country with great potential, has been commissioning infrastructure development projects on a relatively large scale compared to other developing countries. Korean companies could play important roles in Turkish megaprojects, such as urban development by the Housing and Development Administration (TOKI), the 3-story Grand Istanbul Tunnel under the Bosphorus, Haliç Port, and Istanbul canal, by meeting the requirements stated in the Turkish Public Procurement Law.
   Sixth, Korean companies may participate in the Turkish construction industry’s plans to expand into the sub-Saharan African market and in the Syrian reconstruction project. The Turkish construction industry has been showing efforts to enter into the sub-Saharan African market lately. Recent projects commissioned by Turkey in Africa, such as in Ethiopia, Equatorial Guinea, Mali, etc., are leading to expectations of larger projects being executed in this area. Turkey is also eyeing investment possibilities in Syria to be realized during the process of its reconstruction.
   The cultural contents sector is growing fast in Turkey. Having many possibilities to cooperate with promising sub-sectors of Korean cultural contents, it could be the largest beneficiary of the Korea-Turkey FTA services chapter. In the following we suggest such cooperation methods, by comparing the strengths and weaknesses in the cultural contents sector of the two countries.
   First, Turkey is a demographically young society, in which internet use is rapidly increasing. In particular, the increasing supply of smartphones has led to internet access becoming easier. The on-line gaming sector has enjoyed the most benefits from the wide usage of internet, such that renowned private companies in Turkey are actively supporting e-sports. In light of this trend, Korea and Turkey could co-organize an e-sports competition or host a linked game league to contribute to the development of the gaming industry in the two countries.
   Second, Korean broadcasting cultural contents services can be provided through the adequate streaming services in Turkey. As restrictions on illegal streaming services are tightening, Korean cultural contents services could collaborate with Turkish broadcasting services to open a legal channel. This would also contribute in enhancing Turkey’s interest in Korean culture.
   Third, although Korea and Turkey differ in their religious and cultural background, one promising direction could be to export Korean wave (Hallyu) contents, for instance in the form of co-producing Korean dramas, broadcasts, and movies based on an understanding of the culture code in Turkey. Moreover, with the Korea Communications Commission and the Radio and Television Supreme Council of the Republic of Turkey (RTÜK) signing an MOU for joint production, this is expected to have a positive effect on administrative processes, such as deliberations on broadcast content. The resulting contents could also be distributed to the MENA area or Central and South America, where Turkey has a strong presence. Such cooperation would enable a high level of cooperation in trade in services, by creating jobs and human exchanges.