Cablegate: Ambassador's Meeting with Industry Minister

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) Summary: Minister of Industry Ali Coskun told
Ambassador the GOT would introduce legislation to solve
Cargill's zoning problem in January and claimed the GOT was
working on the data exclusivity problem. Coskun seemed to
take the Ambassador's point on the need to resolve some
American company problems before Prime Minister Erdogan's
late-January U.S. trip. On economic reform, Coskun
complained that the IMF did not focus on the real economy.
End Summary.

2. (Sbu) The Ambassador and Minister of Industry Ali Coskun
held their first meeting December 22. Coskun, citing his
long experience as a businessman, and as a founder of the
Turkish-American cooperation coucil at the Foreign Economic
Relations Council (DEIK) during his time as the Chairman of
the Turkish Chambers of Commerce (TOBB), expressed the hope
that the two countries' economic relations coud be brought up
to the level of their geostrategic relationship. The
Ambassador shared this view, and pointed out that his first
speech in Turkey had been on economic topics. The Ambassador
then briefed Coskun on the Economic Partnership Commission
(EPC) meetings, including the discussion of QIZ's.

Foreign Investment:

3. (Sbu) The Ambassador said that at the EPC everyone
agreed that the the missing element in Turkey's economic
picture is a level of Foreign Direct Investment (FDI)
commensurate to the size of its market and its geographic
position. He added that Turkey had two out of three of the
essential conditions to attract FDI: macroeconomic stability
and recently-passed legislation to reduce regulatory
impediments to foreign investment. The establishment of an
interministerial committee on foreign investment was also a
positive step. The Ambassador noted, however, that the third
element needed--a series of "success stories," in which the
Government took action to solve foreign companies'
problems--was lacking. He went on to point out that the
Prime Minister's trip to Washington and the NATO summit were
opportunities to showcase Turkey as an investment
destination. The Ambassador told Coskun he hoped that some
of the U.S. company problems could be resolved in time to
allow U.S. officials to highlight them at these events.

4 (Sbu) Coskun pointed out that he is the coordinating
Minister for economic cooperation, and said that he will try
to solve the American company problems, but that he could not
promise anything. Given that many of the problems relate to
other Ministers' jurisdictions, Coskun felt it was important
to try to deal with them at a meeting of the GOT's
interagency Economic Coordination Council, and said he would
call a meeting to discuss these issues. In general, Coskun
said he hoped the Ambassador could meet with him from time to
time and try to work on these problems. He said his door was
always open.

5. (Sbu) In particular, the Ambassador asked for Coskun's
help with Cargill's zoning problem, noting that Cargill's
factory was its largest greenfield investment in the world,
and that the zoning issue fell under Coskun's ministry.
Coskun pointed out that the GOT had helped Cargill on the
sweetener quota issue, and claimed that the GOT intended to
submit legislation solving the zoning issue to Parliament in
January, after the Budget Law is passed.

Data Exclusivity:

6. (Sbu) The Ambassador also raised U.S. pharmaceutical
companies' problems with data exclusivity, and said he
understood the Prime Minister had indicated he hoped it would
be solved soon. Coskun said, "It's on our agenda," and said
he had met with labor groups and pharmaceutical companies to
discuss the issue.

Economic Reform:

7. (Sbu) The Ambassador congratulated Coskun on Turkey's
recent economic performance, with inflation and interest
rates coming down, and growth and the currency stable, though
perhaps a bit overvalued. The Ambassaador said the GOT
needed to continue economic reforms, particularly as there
will be pressure to spend money or take potentially
inflationary measures, in the run-up to municipal elections
in March. Coskun said his Ministry had responsibility for
the real sector, and complained that the IMF neglected the
real economy and small- and medium-sized enterprises,
focusing only on inflation, financial markets, and debt.
Coskun said his Ministry concentrated on encouraging
investment, exports and production.


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