Industrial Cooperation Work within the Aegean Free Zone - Meeting the Challenges and Opportunities for Turkey Brought About by the Search for Related Innovations and Solutions within Space Exploration Programs

When world markets are in an unfavorable economic environment as they are now at the time of this research report, and national trade balances and currency convertibility and transfer hinder or prevent international business trade, many countries find it necessary to restrict their imports. In order to overcome this, import traders often link an agreement involving the purchases of foreign goods and services to exports of domestic goods and services. This contractual linkage of imports to exports is oftentimes known as the countertrade element of 'offset' or 'reciprocal trade' or 'industrial participation'. Industrial participation results from a contractual arrangement for a seller of a primary item to provide manufacturing and production information and support for co-production rights. By assisting a foreign nation market these co-produced goods abroad, the seller (industrially developed) country can establish powerful trade allies with its government and industrial bases and the buyer (developing) country can increase their level of export trade. Developing into an acceptable and conventional behavior within international trade, industrial cooperation/offset is an activity resulting in much scrutiny and analysis. The pressures in the marketplace drive businesses to agree to industrial cooperation activities in order to obtain sales. These activities include: - the generation of convertible foreign currency by contractual agreements to sell goods and services created by non-convertible local currency, - the acceptance of credits by a third party to offset the trade obligation between a buyer and a seller, - the relinquishment of production rights to a buyer in exchange for a sale, and, - the requirement to generate exports improving the economic base of a country in trade for a sale of defense goods and services. Turkey's national policy for administering such an industrial cooperation benefits program has developed into a government strategy by which to have long term relationships with the country's foreign suppliers while encouraging/ committing them (and their subcontractors/ suppliers) through buyer entities to reciprocate by purchasing goods and services in Turkey with hard currency and/or making investments later in an amount equal to a predetermined percentage of the designated defense procurements [1]. This policy has served Turkey well in the past; now with its space launch program, the country hopes to gain advances in space technology with the subsequent benefits and applications of dual use technologies for co-production and contract manufacturing activities at, among various locations, the Aegean Free Zone (AFZ) in Izmir, Turkey - the selected focus of this report. This has been an attractive initiative for the country now engaged in its own space satellite launch program for surveillance and communications capabilities [2]. Because the very bases of these space and aerospace activities involve highly collaborative team work between global entities in both industrially developed and developing countries, there are vast opportunities for the merging of ideas and goals attendant to joint space research, innovation and the contribution to increase export trade levels. The researchers have undertaken to examine how such opportunities have come about through the industrial cooperation and offset commitment framework that has been set up to permit the participation by buyer and sellers operating within the country's defense and aerospace procurement programs. This research is considered important as space technology is the most versatile field in science that gives developing countries incentives within their own space-faring aspirations. This paper will demonstrate the challenges and opportunities for the industrial collaboration through the aerospace and space technological offset commitments programs and will suggest that such pursuits by the Aegean Free Zone Will significantly contribute to the economical growth objectives of the country.