Cablegate: Private Sector Meetings Inform U.S. - Turkey Epc
Dianne Wampler 03/01/2007 06:17:59 PM From DB/Inbox: Dianne Wampler
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TAGS: ECON EINV ETRD TU
SUBJECT: PRIVATE SECTOR MEETINGS INFORM U.S. - TURKEY EPC
1. (U) Summary: The third meeting of the U.S. - Turkey
Economic Partnership Commission began in Istanbul with a
full-day session devoted to the private sector. These
private sector meetings were designed to inform the
government-to-government meetings that followed on February 9
(septel.) Private sector representatives grappled with ways
to increase bilateral trade and investment. Turkish business
representatives noted that competition for market share in
the U.S., particularly from China is stiff. U. S. business
representatives cited a lack of transparency and excessive
regulation as deterrents to increased growth and investments,
but in general expressed optimism about recent economic
reforms. End Summary.
2. (U) Members of the U. S. delegation to the third
U.S.-Turkey Economic Partnership Commission (EPC)
participated in a day of private sector meetings in Istanbul
on February 8,2007. Business Forum events were organized by
the Union of Chambers and Commodity Exchanges of Turkey
(TOBB) and Turkey's Foreign Economic Relations Board (DEIK).
The U. S. Delegation was led by EEB A/S Daniel Sullivan and
included representatives of the Departments of Commerce and
Energy. Istanbul events included a book release/press
conference, a luncheon with remarks by A/S Sullivan a
business forum session and a meeting with the American
business community organized by AmCham affiliate the American
Business Forum Turkey (ABFT).
3. (U) The day began with a book launch/press conference
organized by TOBB Chairman Rifat Hisarciklioglu.
Hisarciklioglu and Athens-based U. S. Chamber of Commerce
regional representative Kristal Alley announced the release
of a handbook on Doing Business in the United States jointly
developed by TOBB and the U. S. Chamber with USAID financing.
Alley briefly described the joint business development
project that led to the publication of the handbook. A/S
Sullivan noted that these initiatives have the potential to
deepen our relationship and that the program Alley described
is completely private-sector led.
4. (U) Following the book lunch, at a lunch organized by DEIK
and TOBB, A/S Sullivan and MFA Energy Coordinator Mithat
Balkan described the outlook on regional energy security and
cooperation from both government's perspectives. Balkan
stressed that Turkey's geographic location makes it a
critical player. He noted the Baku-Tbilisi-Ceyhan (BTC)
pipeline is proving to be of great commercial value. He
cited U. S. involvement in the BTC pipeline project as proof
that cooperative efforts to create alternate energy
distribution projects could succeed. Both A/S Sullivan and
Balkan stressed the need to improve trade relations and
increase energy efficiency, Balkan urged support for a common
energy policy and sought assistance in reducing the number of
oil tankers transiting the Bosphorous.
5. (U) After lunch, DEIK hosted a "Business Forum" where the
two delegations listened to ideas and suggestions from the
business community about how to increase flows of trade and
investment between Turkey and the U.S. USDOC DAS Paul Dyck's
remarks at the forum covered the US-Turkey trade
relationship, touched on market access issues that impede
these figures from meeting their potential, and then noted
some ways in which we could strengthen the bilateral
commercial relationship including by fostering innovation and
encouraging private sector partnerships such as the TOBB -
U.S. Chamber initiative. Guven Sak, Director of the Economic
Policy Research Institute, described efforts to increase
bilateral trade including customs modernization and joint
production in third countries as well as ways of increasing
foreign direct investment.
6. (U) The business forum also featured presentations by
representatives from various sectors. In general, the
Turkish business community expressed its disappointment with
the relatively low level of bilateral trade, underscored the
importance of the GSP program and complained about the threat
China poses to manufacturers. Presentations made by U.S.
company representatives are noted.
-Construction: Turkish companies are having trouble breaking
into the U.S. market.
-Tourism: Although this is the fastest growing sector in
Turkey, few Americans visit, and most are cruise line
-Textiles: Exports to the EU are doing fine, but Turkey's
share of the U.S. market is too low.
-Insurance (AIG): Recent reforms mean opportunities for U.S.
companies are growing in this sector.
-Steel Industry: Difficult to compete with China; U.S. market
is hard to break into.
-Jewelry: Stressed the need for continued inclusion in the
-Food (ADM): Government involvement in the Turkish market is
unhelpful. Supply and demand are out of balance; government
subsidies distort the market.
-Natural Stones: Turkey has unrealized potential in this
sector; GSP is vital for Turkish exporters.
-Energy (GE): Turkish industry needs more investment in
research and development as well as better technology.
-Automotive Spare Parts: Difficult to compete with China;
U.S. market is hard to break into.
During the subsequent Q&A session, one participant asked for
assistance with customs and security-related delays at U.S.
ports and called for the inclusion of Turkey in the Container
Security Initiative. A/S Sullivan agreed to look into the
7. (U) The final event of the day was a private meeting
between the U.S. delegation and representatives from the U.S.
companies. The mood was generally positive, with several
executives noting that recent economic reforms had made
Turkey a much more attractive market. The main concern
shared by all was the need for more transparency on the part
of the Turkish government. Many pharmaceutical company
representatives described difficulties in bringing new
products to the market. Medicines are being introduced to
the market two or three years behind the U.S. market due to
delays on the part of the GOT. Representatives from other
sectors described difficulties completing projects due to
excessive red tape and/or corruption. One suggested way
forward was for the GOT to accelerate the rate of EU
8. (U) A/S Sullivan and members of the EPC delegation
returned to Istanbul on February 10 and 11. The Consul
General hosted a dinner on the 10th that provided an
opportunity for A/S Sullivan to interact with senior business
leaders, both U.S. and Turkish, in an informal setting.
During a lively conversation A/S Sullivan described progress
the delegation made during February 9 Ankara meetings. In
response to a question, he noted that Qualified Industrial
Zones (QIZ), long a topic of great interest in Turkey,
required legislative action and were thus problematic. He
urged the group to think beyond textiles, noting that QIZs
including textiles were an absolute non-starter for the U.S.
The conversation quickly turned to Iraq, with one
representative from an oil company urging the U.S. to
consider providing payment guarantees and/or bridge loans to
the Iraqi government in an attempt to regulate payment and
ensure on time deliveries of fuel.
9. (U) A/S Sullivan cleared this message.