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Viewing cable 07ANKARA555, U.S.-TURKEY RENEWS CALL FOR ECONOMIC COOPERATION

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Reference ID Created Released Classification Origin
07ANKARA555 2007-03-12 12:48 2011-08-24 01:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Ankara
VZCZCXRO2559
PP RUEHDA
DE RUEHAK #0555/01 0711248
ZNR UUUUU ZZH
P 121248Z MAR 07 ZDK
FM AMEMBASSY ANKARA
TO RUEHC/SECSTATE WASHDC PRIORITY 1291
INFO RUCPDOC/USDOC WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RHEBAAA/DEPT OF ENERGY WASHINGTON DC PRIORITY
RUEHRC/DEPT OF AGRICULTURE WASHDC PRIORITY
RUEHIT/AMCONSUL ISTANBUL PRIORITY 2295
RUEHDA/AMCONSUL ADANA PRIORITY 1731
UNCLAS SECTION 01 OF 03 ANKARA 000555 
 
SIPDIS 
 
DEPT PLEASE PASS USTR FOR LERRION 
DEPT PLEASE PASS USTDA FOR DSTEIN 
USDOC FOR 4200/ITA/MAC/EUR/PDYCK/CRUSNAK 
USDOC FOR 3133/ITA/USFCS/OIO/CEEBIC/MCOSTA 
USDA OSEC FOR DUS TERPSTRA 
USDA FAS FOR OCRA FOR CURTIS, FLEMINGS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON EINV ETRD TU
SUBJECT:  U.S.-TURKEY RENEWS CALL FOR ECONOMIC COOPERATION 
 
1.  (SBU)  Summary:  The February 8 and 9 U.S.-Turkey EPC meetings 
resulted in an invigorated bilateral economic dialogue and a plan 
for cooperation in the coming year.  The EPC began in Istanbul with 
a series of meetings with the U.S. and Turkish private sectors that 
provided a first-hand account of the realities of doing business. 
Government-to-government meetings on February 9 focused on regional 
cooperation, especially in the areas of energy and trade, and called 
for strengthened private sector cooperation to enhance trade and 
investment and knowledge exchanges between U.S. and Turkish 
scientists.  The delegations welcomed the constructive spirit of the 
meetings and the reinvigoration of economic dialogue, with an 
emphasis on identifying and following through on opportunities for 
cooperation.  The action plan that resulted from the meeting and the 
contact group established to oversee this agenda will ensure 
follow-through on these issues during the coming year.  End 
Summary. 
 
EPC Meetings Feb. 8 - 9 
----------------------- 
 
2.  (SBU)  The third Turkey-U.S. Economic Partnership Commission 
(EPC) met in Istanbul and Ankara on February 8 and 9.  The meetings 
fell within the framework established by the July 5, 2006 "Shared 
Vision and Structured Dialogue to Advance the Turkish-American 
Strategic Partnership."  The U.S. delegation was led by EEB A/S 
Daniel Sullivan, and included representatives of the Departments of 
Commerce, Energy, Treasury, and USTDA.  The Turkish delegation was 
led by MFA U/S Ertegrul Apakan and included representatives of the 
Turkish Ministries of Finance, Industry and Commerce, Energy and 
Natural Resources, Health, Culture and Tourism, Agriculture and 
Rural Affairs, and Environment and Forestry, the State Planning 
Organization, Undersecretariats for Treasury, Foreign Trade and 
Customs, the Central Bank, the SMEs Research and Development 
Project, the Energy Market Regulatory Authority, the Privatization 
Administration, Turkish Petroleum Inc., the Turkish Scientific and 
Technological Research Council, EXIM Bank, the Banking Regulatory 
and Supervisory Agency, and Turkish Airlines.  Representatives of 
the Union of Chambers and Commodity Exchanges of Turkey (TOBB) and 
the U.S. Chamber of Commerce observed the meetings. 
 
Private Sector Meetings Inform the Discussions 
--------------------------------------------- - 
 
3.  (SBU)  On February 8, members of the delegations met with 
representatives of the U.S. and Turkish business communities in 
Turkey in a "Business Forum" hosted by TOBB and Turkey's Foreign 
Economic Relations Board (DEIK) in Istanbul (septel).  The meetings 
were kicked off by a press conference to launch a new guide book for 
Turkish companies seeking to do business in the United States 
published jointly by Turkey's national business federation, TOBB, 
and the U.S. Chamber of Commerce, and supported by USAID.  At a 
lunch organized by DEIK and TOBB, A/S Sullivan and MFA Energy 
Coordinator Mithat Balkan gave speeches in which they described a 
markedly similar outlook on regional energy security and 
cooperation.  Following lunch, DEIK hosted a "Business Forum" during 
with the two government delegations listened to ideas and 
suggestions from the business community about how to increase flows 
of trade, investment and technology between the U.S. and Turkey and 
ways to foster commercial and economic cooperation in third 
countries.  The Turkish American Business Forum (ABFT) also hosted a 
meeting with the U.S. delegation.  U.S. companies noted progress in 
Turkey's business climate (including IPR protection), but 
highlighted the need for continued reforms and transparency for 
Turkey to remain a competitive destination for U.S. companies.  The 
delegations agreed that the Business Forum should be a regular 
adjunct to future EPC meetings. 
 
Macroeconomic Stability Key to Opportunities 
-------------------------------------------- 
 
4.  (SBU)  Meeting in Ankara on February 9, the two delegations 
discussed how the strong and solidly-based economic growth and 
prosperity of the U.S. and Turkey is creating new opportunities for 
economic, commercial, scientific and technological exchanges and 
cooperation.  Ministry of Finance Department Head Halit Ocal and 
Treasury Department Head Ozgur Demirkol reviewed how Turkey's 
successful implementation of economic reforms is promoting stable 
and self-sustaining growth and expanding prosperity.  U.S. Treasury 
representative Karen Mathiasen discussed trends in the global 
 
ANKARA 00000555  002 OF 003 
 
 
economy, the strong performance of the United States economy, and 
their implications for U.S.-Turkey economic relations. 
 
Energy Security Large Component of Discussions 
--------------------------------------------- - 
 
5.  (SBU)  Both delegations expressed their countries' commitment to 
improving the security and diversity of global energy supplies and 
the important global and regional roles both Turkey and the U.S. 
play in energy security.  MFA DDG for Energy Affairs, Vural Altay, 
presented a summary of Turkey's energy policy as: 
 
-- Meeting domestic energy demand; 
-- Diversifying its energy mix and sources; 
-- Serving as an energy carrier - transit country; 
-- Serving as an energy hub; and 
-- Becoming a "4th artery" for Europe's gas supply. 
 
EUR DAS Matt Bryza noted the strength of U.S.-Turkey strategic 
energy partnership, evidenced by the success of the BTC pipeline. 
He stated that the USG aimed to support Turkey's strategic 
aspirations and stressed the importance of proper sequencing to take 
the next steps to create a southern gas corridor to Europe.  SCA 
PDAS Stephen Mann called for cooperation to advance Trans-Caspian 
Pipelines for gas and oil.  As had been discussed a the luncheon the 
day before, the delegations agreed that the next concrete step was 
for Turkey to establish a transparent regime for transiting natural 
gas that will be accepted by investors, consumers and producers. 
 
6.  (SBU)  DOE representative Lana Ekimoff emphasized the USG's 
desire to cooperate on clean coal technology, energy efficiency, and 
nuclear power options.  Ambassador Wilson cited continued U.S. 
company interest in the 1999 protocol for hydroelectric projects and 
stated that the U.S. is working towards ratifying the Peaceful Uses 
of Nuclear Energy Agreement.  Finally, representatives from the 
Turkish Ministry of Energy called for greater greenfield investment 
in the energy sector and advancing cooperation under existing energy 
cooperation agreements. 
 
S&T Important For Innovative Economy 
----------------------------------- 
 
7.  (SBU)  The delegations explored new opportunities for expanding 
exchanges of scientific and technological knowledge and research 
between Turkey and the U.S.  They agreed that the bilateral S and T 
agreement should be renewed as soon as possible.  U/S Apakan 
emphasized Turkey's desire to cooperate on R and D, noting that our 
Strategic Vision document referenced this point.  EEB Jefferson 
Scholar Michael Mauel discussed the possibilities for creating 
scientist exchange programs where U.S. scientists could come to 
Turkey and meet with their peers.  Mauel also participated in an 
MFA-arranged visit to the technology park at Middle East Technical 
University. 
 
Trade & Investment - Getting Past the Problems 
--------------------------------------------- - 
 
8.  (SBU)  Examining trends in trade and investment, the delegations 
noted that there have been significant increases in bilateral trade 
and direct investment, but that these flows fall short of their 
potential.  They agreed that part of this potential could be met 
through expanding awareness in the private sector of opportunities 
in the fast-growing markets in both countries.  Cooperation among 
small-and medium-sized enterprises offers a particular opportunity 
for expanding commercial ties and cooperation, including in the 
agricultural sector.  Kristal Alley of the U.S. Chamber of Commerce 
described a number of private sector initiatives targeting private 
partnerships both in Turkey and to promote business development in 
Central Asia (Eurasian Business Platform).  The delegations noted 
results of past cooperation between the U.S. Chamber and TOBB (such 
as the recently published "Guidebook to Doing Business in the U.S.") 
and looked forward to additional cooperation between TOBB and the 
U.S. Chamber. 
 
9.  (SBU)  In addition to the discussion on strengthening 
cooperation in the private sector, representatives from the Turkish 
Foreign Trade Undersecretariat (FTU) and Ministry of Agriculture 
exchanged views with their U.S. counterparts on some of the market 
access issues faced by U.S. and Turkish companies. DOC DAS Paul Dyck 
 
ANKARA 00000555  003 OF 003 
 
 
mentioned some of the market access issues facing U.S. companies, 
including IPR issues and problems faced by U.S. companies in the 
distilled spirits industry. Foreign Trade DDG Hasan Yalcin mentioned 
the WTO rice case and past proposals to create Qualified Industrial 
Zones (QIZs) in Turkey, which he said were not attractive to Turkey 
unless they include textiles.  A/S Sullivan noted that QIZs would 
require legislation, a particular challenge in this legislative 
year.  The delegations agreed to look at ways to move beyond QIZs 
perhaps by focusing on ways to promote U.S.-Turkish cooperation in 
the area of engineering contracting and major 
construction/infrastructure projects both in Turkey and in the 
region.  They noted that TOBB's experience in developing the Erez 
Industrial Estate in Gaza could be an initial focus.  A/S Sullivan 
suggested that discussion of Joint Production Opportunities in Iraq, 
Afghanistan, Lebanon and Gaza could be a useful adjunct to the 
upcoming American Turkish Council (ATC) meeting.  Ambassador Wilson 
noted that strong participation by the business community would be 
essential. 
 
Press Coverage Positive 
----------------------- 
 
10.  (SBU)  Press coverage from the events in Ankara and Istanbul 
included stories in the major print media and full coverage of 
Ambassador's interview on the margins of the February 8 
private-sector meetings.  The press took note of the positive spirit 
of the meetings and the support communicated by the delegations for 
increased economic cooperation.  The Chairman of TOBB, Rifat 
Hisarciklioglu, gave a newspaper interview in which he stated that 
he was pleased overall with the subjects raised during the meetings 
and his interest in continuing TOBB's partnership with the U.S. 
Chamber. 
 
Positive Spirit Reawakens 
Hibernating Economic Cooperation 
-------------------------------- 
 
11. (SBU) Comment:  The lively discussions and exchange of ideas 
resulted in a list of action items to be coordinated by the two 
sides prior to the next EPC meeting in 2008 (to be sent septel). 
The tone of the meetings was constructive and positive, with a focus 
on cooperation and improved trade and investment versus the laundry 
list of unresolved commercial disputes discussed in past EPCs.  As 
an important part of the EPC, cooperation on energy security was 
emphasized and the U.S. delegation reassured Turkish officials of 
our support for their plans in the region.  In short, this EPC did 
what it set out to do:  restart a stagnant dialogue and expand the 
bilateral relationship beyond the defense and political realms.  The 
two delegations agreed to meet again during 2008 in the U.S. and to 
set up a working group comprised of two members from each delegation 
to periodically communicate on the status of the action plan agenda. 
 End comment. 
 
12. (SBU)  This message was cleared by A/S Dan Sullivan. 
 
WILSON