Cablegate: Iraq-Turkey Trade: Igc President Talabani Agrees

This record is a partial extract of the original cable. The full text of the original cable is not available.



E.O. 12958: N/A


1. (SBU) Iraqi Governing Council President Jalal Talabani
shared with PolMilOff in Ankara Nov. 20 the text of an
agreement (at Para 2) he said he and the IGC/Iraqi Ministers
delegation reached Nov. 19 with Turkish Acting Foreign
Minister and Foreign Trade Undersecretary Tuzman. Tuzman
presented the text to Talabani and his delegation and they
agreed to it with one change. The Iraqis would not agree to
a Turkish request for permission for Turkish companies to
import scrap metal from Iraq. Talabani explained that Iraq
needed the scrap metal as a source of rebar for construction.
The document is to be signed as "Agreed Minutes" on Nov. 20.
A detailed readout of Talabani's Ankara visit, along with a
report of our Nov. 20 discussion with Foreign Trade
Undersecretary Kayalar on Iraq-Turkey trade, will follow

2. (SBU) Begin text:

Agreed Minutes

1. The two sides agreed to exert every possible effort to
further promote and diversify bilateral trade to a higher
level corresponding to their potentials on a mutually
beneficial basis.

2. With the aim to promote and sustain bilateral trade on a
mutually beneficial basis, and the economic cooperation
between their respective countries, the two sides agreed to
initiate the negotiations for concluding a preferential trade
agreement between Turkey and Iraq within two months from the
date of signing of this document. In this framework, the two
sides undertook to apply five percent as the average
protection tariff rate in the commercial exchanges between
the two countries, except negative lists of agricultural
products. The number of lines in the negative list cannot be
more than twenty percent of the total tariff lines.

The two sides also agreed to eliminate all non-tariff
barriers in their bilateral trade.

The two sides decided to hold the first round of negotiations
of a preferential trade agreement in the second half of
January 2004 in Ankara.

3. The two sides agreed to re-establish border trade between
the two countries. To this end, the Turkish side submitted
to the Iraqi side the following lists of the contracts signed
by the Turkish companies.

a) Contracts funded and partially shipped, (contracted goods
that are ready for shipment);
b) Contracts funded but not shipped (contracted goods for
which production process has not started yet);
c) Contracts with pending issues.

4. The two sides agreed to initiate the negotiations
concerning a new contract between SOMO and TPIC for the
purchase of crude oil from Iraq within the framework of
border trade with the aim to finance the new projects of the
Iraqi side. The two sides decided that the modalities of the
new system and the implementation of the above-mentioned
contracts would be determined during the negotiations to be
held in the first half of December 2003.

5. The two sides agreed to enhance the relations in the field
of banking. The Iraqi side agreed to facilitate the
procedures for opening of branch offices by Turkish banks and
establishment of Turkish banks in Iraq.

6. The two sides agreed to exert every possible effort for
the implementation of the contracts signed by the Turkish
companies within the framework of the "Oil for Food Program."
To this end, the Turkish side informed the Iraqi side of the
list of contracts to be prioritized by the CPA. The Iraqi
side agreed to give full support to the prioritization
process of the contracts before the CPA.

7. In order to boost economic activities of border and
peripheral cities of the two countries, the two sides agreed
to establish Border Trade Centers (BTC) on the borders
between Turkey and Iraq. The two sides decided to hold the
expert level meeting in the second half of January 2004 in
Ankara in order to discuss and finalize the following issues
concerning BTC projects:

a) The location of the BTC;
b) The design, construction and operational matters;
c) The list of products and quantities to be subject to
d) Procedures to be applied for passengers and goods;
e) Privileges and exemptions to be granted for the passengers
and goods.

8. The two sides discussed the possibilities of initiation of
alternative transportation routes between the two countries.
Within this context, the two sides agreed to take the
necessary and urgent measures in order use the
Nusaybin-Qamishly-Mosul railway connection. The Turkish side
agreed to support the efforts of the IRR with the aim to
improve the capacity of this line.
The two sides agreed to initiate the negotiations regarding
the second border crossing point in January 2004.

The Turkish side requested from the Iraqi side to accelerate
the registration procedure for the establishment of foreign
companies in Iraq by Turkish firms. The Iraqi side agreed to
issue the necessary licenses for the Turkish companies within
a month after the date of application.

9. The two sides underlined the importance of the
Kirkuk-Yumurtalik Crude Oil Pipeline for exportation of the
Iraqi crude oil and agreed to take all necessary measures for
the proper functioning and protection of the pipeline.

Done and signed in Ankara on November 20, 2003 in two
originals in the English language, both texts being equally

End text.

3. (U) Baghdad minimize considered.

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