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Cablegate: Defining a "High Tech" Qiz

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

071533Z Jun 04

UNCLAS ANKARA 003137

SIPDIS


STATE FOR E, EB AND EUR/SE
TREASURY FOR OASIA
DEPT PLEASE PASS USTR FOR CNOVELLI/LERRION
USDOC FOR ITA/MAC/DDEFALCO


SENSITIVE


E.O. 12958: N/A
TAGS: ETRD TU
SUBJECT: DEFINING A "HIGH TECH" QIZ


Sensitive but Unclassified. Please Handle Accordingly.


Ref: (A) MCCORMICK-DEUTSCH 5/25/04 EMAIL
(B) Ankara 2769
(C) Ankara 2158


1. (SBU) In recent months, the Turks have sent mixed
messages on what they would like to see in U.S.
legislation on Qualifying Industrial Zones (QIZ). In
an April 13 diplomatic note (ref C), the GOT gave an
official and positive response to our proposal to move
forward with legislation including exclusions for
textiles and other products, while requesting that the
legislation drop the "catch-all" clause explicitly
allowing the U.S. side to exclude additional sensitive
items. However, the Turks have also raised the concept
of a "high tech" QIZ in State Minister Tuzmen's April 5
meeting and in followup correspondence with USTR
Zoellick (ref B), and again during a May 24 telephone
call between MFA U/S Ziyal and U/S Larson (ref A). In
the latter conversation, Ziyal undertook to send U/S
Larson a paper outlining the "high tech" QIZ idea.


2. (SBU) On June 3, Econ Counselor asked Mehmet Gucuk,
MFA's Deputy Director General for Bilateral Economic
Affairs, where the GOT paper was, noting that the U.S.
legislative calendar for 2004 was very tight. Gucuk
told us that he did not believe that MFA and the
Foreign Trade Undersecretariat would be able to deliver
the written clarification, promised by Ziyal, defining
desired parameters of a high tech QIZ in the near
future. He asked whether, instead, the USG could
clarify whether "high tech" QIZ legislation would need
to include the sectoral exclusions and catch-all
provisions that the USG felt were essential in the
current draft. Gucuk suggested that the GOT would
prefer "high tech" QIZ legislation if it enabled them
to avoid these provisions.


3. (SBU) We believe it highly desirable for the
Administration to submit QIZ legislation to Congress
prior to the POTUS visit to Ankara and Istanbul at the
end of June, and have been urging GOT officials to
provide us with clarification on the high tech QIZ
concept on an urgent basis. We understand that
Washington agencies originally presented the QIZ as a
vehicle for stimulating high tech trade and investment
in Turkey and we do not see any substantive
inconsistency between a high tech QIZ and the QIZ with
the product exclusions which has been on the table
since 2002. It is curious that the GOT, which
originally rejected the high tech QIZ concept on the
grounds that high tech products are largely subject to
low or zero duty in the U.S. trade regime, is now
resurrecting this idea. Based on Gucuk's comments, it
seems the MFA is searching for a way to proceed that
avoids the sectoral exclusions and the catch-all
provision.


4. (SBU) Action Request: Although the Embassy believes
that the onus is clearly on the Turks to define what
they mean by a high tech QIZ, we believe it would also
be useful to convey Washington's views on this topic,
specifically, what the rough outlines of high tech QIZ
legislation would look like, and whether such
legislation would need to include sectoral exclusions
and the catch-all provision.
Edelman

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