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Cablegate: Commerce D/S Sampson Encourages Turkey to Resolve Trade

VZCZCXRO4837
PP RUEHDA
DE RUEHAK #1616/01 1761122
ZNR UUUUU ZZH
P 251122Z JUN 07
FM AMEMBASSY ANKARA
TO RUEHC/SECSTATE WASHDC PRIORITY 2729
INFO RUCPDOC/USDOC WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RUEHIT/AMCONSUL ISTANBUL PRIORITY 2928
RUEHDA/AMCONSUL ADANA PRIORITY 2072

UNCLAS SECTION 01 OF 03 ANKARA 001616

SIPDIS

DEPT PLEASE PASS USTR FOR LERRION, SDONNELLY
USDOC FOR 4232/ITA/MAC/EUR/OECA/CRUSNAK
USDOC FOR 3150/ITA/USFCS/OIO/CEENIS/MCOSTA

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: ECON ETRD EINV KIPR TU
SUBJECT: COMMERCE D/S SAMPSON ENCOURAGES TURKEY TO RESOLVE TRADE
IMPEDIMENTS AND IMPROVE TRADE RELATIONS

1. (SBU) Summary: During a June 5-9 visit to Turkey, Deputy
Secretary of Commerce Dr. David Sampson discussed ways to improve

SIPDIS
the bilateral economic relationship with Turkey's Foreign Trade
Minister, the Chairman of Turkey's largest business organization,
and the Foreign Minister and MFA Under Secretary. During his
meetings, the Deputy Secretary raised U.S. industry concerns about
certain Turkish trade policies and heard about Turkish concerns
about U.S. anti-dumping procedures and the desire for greater
business-business cooperation between U.S. and Turkish companies.
The visit, including public speeches and magazine and broadcast
interviews, generated an unusually positive response from the press.
The resounding message from the meetings was that government
officials should strengthen efforts to foster private sector
cooperation and trade so that the bilateral economic relationship
can reach its full potential. End Summary.

-----------------------------
Foreign Trade Minister Tuzmen
-----------------------------

2. (SBU) State Minister for Foreign Trade Kursad Tuzmen began the
meeting with a statement in Turkish to the press, stating that while
bilateral trade had grown, it remained tiny compared to the size of
the total U.S. economy, and in relation to the overall growth of
Turkey's international trade. Tuzmen raised the ongoing DOC
anti-dumping investigation into iron and steel imports from Turkey,
which composed 10% of Turkey's overall exports to the United States
in 2006. He argued that DOC decision to include a recent Turkish
Competition Board's (TCB) anti-trust decision in its deliberations
is unfortunate and does not relate to the allegations in the
anti-dumping case. Tuzmen unexpectedly included representatives
from Turkey's iron and steel industry in the meeting, who told D/S
Sampson that since the decision to open the case, Turkey's steel
exports to the U.S. have declined by 56%. The U.S. was the largest
importer of Turkish iron and steel products in 2006. D/S Sampson
explained that DOC does not intend to rely on the TCB's
anti-competition finding to determine the existence of dumping but
that rather we are investigating the reliability of the information
provided by the Turkish respondents in the case. He further stated
that all parties will have the opportunity to comment on Commerce's
preliminary conclusions before a final determination is issued. He
invited Turkish industry representatives to provide input to the
investigative team that was currently in Turkey.

3. (SBU) Tuzmen also appealed to both the Ambassador Wilson and
D/S Sampson to "do everything they could" to influence decisions
that would positively affect Turkey's exports, especially in the
iron and steel and textiles sectors, and to support Turkey's
continued inclusion in the Generalized System of Preferences (GSP)
program, which provides certain goods duty free import status in the
U.S. He also mentioned the ongoing dispute between Turkey and the
U.S. at the WTO's Dispute Settlement Body (DSB), which is examining
Turkey's rice importation practices, and expressed Turkey's
disappointment that this case could not have been settled amicably
between the two parties without the resorting to the DSB.

4. (SBU) Tuzmen outlined Turkey's proposal for textile
"safeguards" put forward during WTO NAMA discussions, asked for U.S.
support. He also provided a brief update on Container Security
Initiative (CSI) discussions, urging further U.S. support for
Turkey's border and port security. Ambassador noted that progress
on CSI is awaiting GOT approval of a draft bilateral agreement.
Tuzmen said his staff is awaiting final comments from relevant
Turkish agencies and will respond to the U.S.'s most recent proposal
as soon as possible. Finally, Tuzmen informed D/S Sampson that
Turkey ratified the WIPO "internet treaties" on May 8, 2007. This
was one of the improvements called for in USTR's 2006 Special 301
report, and he hoped that this action would cause USTR to look
favorably at taking Turkey off of the Priority Watchlist in 2008.

5. (SBU) D/S Sampson agreed that trade between the two countries
is not meeting its potential and pledged to continue to engage in an
open dialogue to try to solve issues and assist with Turkish trade
missions to the U.S. D/S Sampson also explained DOC's "Invest in
America" campaign, which adds promotion of foreign investment in the
U.S. to DOC's brief. On the rice case, D/S Sampson assured Tuzmen
of USTR's willingness to continue the dialogue. Regarding textiles,
he stated that Turkey's proposal for the treatment of textiles in
the Doha Round had initiated a useful discussion among WTO members.
The D/S also mentioned the U.S. proposal focusing on labeling
requirements for textiles, apparel and footwear and asked for
Turkey's support for that proposal.

6. (SBU) D/S Sampson raised U.S. innovative pharmaceutical

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companies' ongoing concerns about the remaining generics
applications (ref A) filed prior to January 1, 2005, on which the
Turkish Ministry of Health (MOH) has yet to make a decision. He
asserted that strengthening the protection of intellectual property
will go a long way in improving Turkey's attractiveness to
innovative companies. He also raised the continuing problem of
pirated and counterfeited books produced in and/or sold in Turkey.
D/S Sampson then discussed the U.S. distilled spirits industry's
comments and concerns about the amended system for applying
traceable strip stamps to products imported by Turkey (ref B). He
also reiterated concerns raised during the Trade and Investment
Framework Agreement (TIFA) talks about what the U.S. distilled
spirits industry views as discriminatory taxation against imported
products.

TOBB Chairman Rifat Hisarciklioglu
----------------------------------

7. (SBU) During a luncheon with Turkish Union of Chambers of
Commerce and Commodities Exchanges (TOBB), Chairman Rifat
Hisarciklioglu argued that bilateral trade between Turkey and the
U.S. is well below its potential and urged D/S Sampson to help find
ways to expand the relationship. Hisarciklioglu and D/S Sampson
discussed ways to improve bilateral trade and attract investment
between the two countries as well. TOBB advisor Dr. Guven Sak made
a presentation on how the private sector could take a lead role in
strengthening U.S.-Turkey economic ties.

-----------------------------
Foreign Minister Abdullah Gul
-----------------------------

8. (SBU) Foreign Minister Gul expressed his support for
strengthening Turkey's trade relationship with the U.S. and
commended D/S Sampson for recognizing the importance of this
relationship. Gul emphasized the importance placed on economic
relations in the "Shared Vision and Strategic Partnership" document
he cosigned with Secretary Rice in 2006 and emphasized the
importance of working together to realize the Action Plan resulting
from the recent bilateral Economic Partnership Commission meeting
(ref C). Gul argued that U.S.-Turkish joint business ventures were
too small and that government leaders should visibly push
cooperation in this area. Gul also discussed how the ruling AK
Party's economic reforms had improved Turkey's economy by making
companies operate more efficiently. D/S Sampson complimented the
dramatic reforms that have been accomplished and cited the sharp
increase in foreign direct investment as an indicator of just how
much the economic outlook has improved. He stated that the purpose
of his visit is to support greater commercial linkages between the
U.S. and Turkey and to raise awareness in the U.S. of the potential
in the Turkish market.

-----------------------------------
MFA Under Secretary Ertugrul Apakan
-----------------------------------

9. (SBU) Under Secretary Apakan expanded on what was said by
Foreign Minister Gul and emphasized the importance of the EPC Action
Plan as a guideline for future activities. He asserted that the
U.S. should view Turkey not only as a strategic bilateral partner
but also as a stabilizing presence with a positive impact on the
"neighborhood," including the Mediterranean and the Black Sea
region. Apakan provided an update on several initiatives awaiting
Turkish action, including the Science and Technology Agreement and
the CSI Agreement, both action items from the EPC. He reported on
the May 8 ratification of the WIPO treaties and echoed Tuzmen's hope
that this action would help Turkey get off of the USTR Special 301
Priority Watch List in 2008. D/S Sampson raised U.S. concerns over
the continued availability of pirated and counterfeited books in
Turkey and mentioned the U.S. pharmaceutical industry's ongoing
concerns about the remaining generic applications. Apakan suggested
that a working-level meeting with MOJ and MOH experts in attendance
might be helpful to work through IPR-related issues. Both agreed on
the importance of the relationship and pledged to work together to
strengthen it.

-----------------------------------
Boeing Advocacy at Turkish Airlines
-----------------------------------

10. (SBU) At the Turkish Airlines (THY) offices in Istanbul, D/S
Sampson called on THY President and CEO Temel Kotil to discuss the
Airline's ambitious expansion plans, particularly as they related to
new U.S. routes and future aircraft purchases. Kotil said that THY

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has recently been concentrating on new routes from Asia. To build
on their Turkey hub strategy, they plan to add many African routes
in the coming year. With regard to the U.S., Washington, DC is next
on their planned new routes, followed by Los Angeles. Sampson asked
specifically about purchase plans. Kotil said that currently their
narrow bodies are Boeings (primarily 737-800s) and their long-haul
wide body aircraft are Airbus. THY's goal is to continue to
standardize their long-haul aircraft with one maker. Sampson
praised the superior economy and features of the Boeing 787
Dreamliner. Kotil confirmed that he will attend the 787 rollout in
July in Seattle.

-------------------------
Private Sector Engagement
-------------------------

11. (SBU) Also in Istanbul, D/S Sampson met separately with
representatives from the Turkish Industrialists and Businessmen's
Association, U.S. financial services providers, Turkish American
Business Association, and the Turkish-U.S. Business Council
(TAIK)/Foreign Economic Relations Board (DEIK), and gave opening
remarks at the American Business Forum in Turkey's Conference on
Innovation. In these meetings, the Deputy Secretary stressed the
need for greater U.S.-Turkey commercial linkages and highlighted the
importance of innovation to Turkey's continued economic success.
The D/S solicited input from the private sector representatives on
additional reforms needed in the Turkish economic and regulatory
environment, as well as the opportunities for and impediments to
increased bilateral trade and investment.

-------
Comment
-------

12. (SBU) D/S Sampson's visit sent the message to Turkish
officials that the U.S. values the growing economic and trade
relationship with Turkey, a message that was well-received by those
with whom he met as well as with the Turkish press. The consistent
message that came from these meetings is that our economic
relationship is important but is not achieving its full potential.
Hopefully through the initiatives agreed to at the EPC and
especially with private sector involvement, Turkish and U.S.
companies will begin to find new ways in which to cooperate and do
business.

13. (SBU) This message was cleared by the Commerce Department.
WILSON

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