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Cablegate: Turkish Iraqi Economic Cooperation Talks

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

UNCLAS SECTION 01 OF 05 ANKARA 006388

SIPDIS

SENSITIVE

E.O. 12958: N/A
TAGS: EFIN ETRD ENRG ECON IZ TU
SUBJECT: Turkish Iraqi Economic Cooperation Talks

REF: ANKARA 6170

SENSITIVE BUT UNCLASSIFIED.

1. (SBU) Following is the text of "agreed minutes"
signed on November 5 at the conclusion of Turkish-Iraqi
Joint Economic Committee meetings in Ankara (REFTEL).
The document, which was given to us by the Turkish MFA,
is encouraging in that it demonstrates that Turks and
Iraqis are working together to address impediments in
current trade and investment relations -- including
security issues -- and to put in place a new legal and
regulatory framework for the expansion of future trade
and investment relations.

Highlights of areas of agreement include:

1) Executing outstanding OFF and bilateral protocol
contracts.

2) Concluding a framework agreement between Turk
Eximbank, the Trade Bank of Iraq.

3) Continuation of negotiations of a second border gate
to be located at Ovakoy region.

4) Cooperation on road security, especially between Mosul
and Baghdad.

5) Establishing Turkish and Iraqi railroads joint
committee to address improving infrastructure.

6) Enhanced energy and electricity cooperation, including
upgrading the Kirkuk-Ceyhan (Yumurtalik) pipeline and
facilitating work by Turkish oil and gas firms in Iraq.

2. (SBU) MFA contacts told us that the two sides
discussed Iraq's desire for forgiveness of debts owed to
Turkey. They were, however, unable to agree on wording
to be included in the agreed minute. (Septel will report
Turkish views on this issue.)

3. (SBU) Begin text.

Begin Text

AGREED MINUTES OF THE 15TH SESSION OF TURKISH-IRAQI JOINT
COMMITTEE FOR ECONOMIC AND TECHNICAL COOPERATION

The Turkish - Iraqi Joint Committee, set up in accordance
with Article 9 of the Agreement on Economic and Technical
Cooperation between the Government of the Republic of
Turkey and the Government of the Republic of Iraq held
its 15th Session in Ankara, on November 2-5, 2004.

The Turkish delegation was headed by H.E. Kursad Tuzmen,
Minister of State of the Republic of Turkey, and the
Iraqi delegation was headed by H.E. Thamir Ghadhban,
Minister of Oil of the Republic of Iraq.

The lists of the members of the two delegations were
shown in Annexes I and II respectively.

During his stay in Ankara, H.E. Thamir Ghadhban, Minister
of Oil of the Republic of Iraq met with H.E. Hilmi Guler,
Minister of Energy and Natural Resources, and H.E. Binali
Yildirim, Minister of Transportation.

The deliberations of the Joint Committee took place in an
atmosphere of mutual understanding and cooperation,
reflecting the traditionally close, brotherly and cordial
relations between the two countries.

After having detailed discussions and exchanging views on
further expanding the existing commercial and economic
relations between the two countries, both sides agreed as
follows;

I- TRADE AND ECONOMIC COOPERATION

1. Both sides stressed the importance of further
enhancing commercial relations between the two countries
on the basis of the needs of their economies and agreed
to exert every possible effort to increase the volume of
trade and diversify its composition.

2. Both sides agreed to rearrange the framework of
bilateral trade and economic relations.
To this end, both sides agreed to conclude the
negotiations of Trade Agreement, Agreement on Avoidance
of Double Taxation and Agreement on Reciprocal Promotion
and Protection of Investments as soon as possible.

Within this context, the Turkish side handed over the
Iraqi side the draft texts of the Agreement on Reciprocal
Promotion and Protection of Investments and the Trade
Agreement.

Both sides decided to hold the first round negotiations
of the Trade Agreement in February 2005, in Ankara. The
negotiations regarding the Agreement on A voidance of
Double Taxation and the Agreement on Reciprocal Promotion
and Protection of Investments will commence at the
earliest convenience.

3. The Turkish side expressed its support in accession
process of Iraq into the WTO and agreed to provide
training programs for Iraqi experts in Turkey.
4. The Turkish side submitted a list of the Turkish
companies having difficulties in executing the
prioritized UN Oil for Food Program (OFF) contracts and
in receiving their outstanding payments within this
system.

The Turkish side also conveyed a list of the contracts
signed by Turkish companies before June 2004, and
requested the Iraqi side to issue the L/Cs for these
contracts.

The Iraqi side undertook to examine all these cases with
a positive approach and to convey its response until the
end of December 2004.

5. Both sides, underlining the importance of the trade
fairs and exhibitions in the development of the bilateral
trade and economic relations, decided to encourage their
public and private sector companies in organizing trade
fairs and exhibitions in Turkey and Iraq, as well as
participation of their companies to the international
fairs to be held in both countries.

6. Both sides agreed to organize reciprocal trade
missions and delegations with the aim to effective
utilization of existing free zones established in both
countries.

7. Both sides noted with satisfaction the successful
implementation of the Border Trade Arrangement (BTA)
contracts that were reactivated after December 2, 2003.
Both sides agreed to exert every possible effort for
smooth implementation of the remaining contracts.

In this context, the Iraqi side agreed to advise their
relevant organizations to speed up the processing of the
remaining registered and funded BTA contracts, in
accordance with the Article 5/d and 5/e of the Statement
dated March 11, 2004.

The Turkish side, indicating the submissions of the
statement of the deposits and withdrawals from BTA
accounts and the payments made to Turkish companies for
the goods delivered to Iraq as referred to in the said
Statement, requested the Iraqi side to confirm these
payments at its earliest convenience.

To this end, the Turkish side undertook to convey all the
documents regarding these payments to SOMA, in the first
half of November 2004.

The Iraqi side agreed to examine these documents and
reply within 3 months.

The Turkish side, submitting a list of the unpaid
invoices of the Turkish companies, asked the Iraqi side
for an urgent issuance of the payment instructions.

Cooperation Between Private Sectors

8. Both sides, emphasizing the important role of the
private sector enterprises in economic development of
their countries, agreed to promote cooperation between
the Union of Chambers of Commerce and Industry of Turkey
(TOBB), the Foreign Economic Relations Board of Turkey
(DEIK), the Iraqi Federation of Industries and the Iraqi
Chambers of Commerce with the aim of establishing joint
ventures for rehabilitation and modernization of Iraqi
industries.

The Turkish side, referring to the draft agreement
submitted by the Iraqi Federation of Industries to Union
of Chambers of Commerce and Industry of Turkey (TOBB) /
Foreign Economic Relations Board of Turkey (DEIK), agreed
to study and reply this agreement until end of the
December 2004.

Both sides agreed to organize a businessmen delegation to
Iraq in the first half of 2005 within the framework of
the Memorandum of Understanding (MOU) on the Creation of
the Bilateral Business Council between Turkey and Iraq,
signed by Foreign Economic Relations Board of Turkey
(DEiK) and Iraqi Businessmen Association (IBA) on May 6,
2004, in Istanbul.

II- BANKING
9. The Turkish side, referring to the applications made
by Turkish banks, namely T.C. Ziraat Bankasi and Turkiye
Vakiflar Bankasi, requested the Central Bank of Iraq to
accelerate the procedure for opening branch offices in
Iraq. The Iraqi side undertook to respond this subject
within one month.

10. Both sides discussed the possibilities of concluding
a Framework Agreement between Turk Eximbank, the Trade
Bank of Iraq (TBI) and the Iraqi Ministry of Finance in
order to provide exports credit insurance by Turk
Eximbank for the L/Cs issued by the TBI with 180 days
maturity.

III- TRANSPORTATION AND CUSTOMS

11. Both sides stressed the importance of the
transportation sector in further development of bilateral
trade and economic relations.

Road Transportation

12. The two sides agreed on continuation of the ongoing
process of negotiations related to the opening of the
Turkish-Iraqi second border gate to be located at Ovakoy
region.

13. Both sides stressed the importance of ensuring the
security of the Turkish trucks carrying goods to Iraq
especially in the road section connecting Mosul to
Baghdad. The Iraqi side, informing the Turkish side about
the measures that have already been taken by the Iraqi
authorities to ensure the security in this segment,
expressed its determination to enhance it further.

14. The Turkish side requested the Iraqi side to provide
the names and addresses of the registered Iraqi road
transport companies.

The Iraqi side agreed to convey this list at its earliest
convenience.

Railway transportation

15. Both sides agreed to take appropriate measures with
the aim to effective utilization of the Nusaybin-Qamishly-
Mosul railway for goods and passenger transportation.

To this end, both sides agreed to establish a technical
committee between TCDD and IRR with following tasks;

Improvement of the infrastructure of Nusaybin-Qamish1y-
Mosul railway to increase its capacity to 6 trains per
day,

Organization of cargo trains between Gaziantep and
Baghdad,

Organization of the regular passenger trains between
Istanbul and Baghdad,

Supplying the equipment and material required by the IRR
for the rehabilitation of Iraqi railway network.

Air transportation
16. Both sides agreed to encourage their national flag
carriers and private airline companies to initiate
regular flight services between their countries.

IV- INDUSTRY

17. The Iraqi side, indicating the possibilities of
cooperation between Turkish companies and Iraqi state
companies for the development of the Iraqi industries,
especially in the petrochemicals, metallurgy,
engineering, chemicals, building, food and textiles
industries, submitted a list of the projects including
detailed information for consideration.

The Turkish side agreed to distribute this information to
the relevant private sector companies in Turkey with the
aim of encouraging their involvement in the
rehabilitation and modernization of the industrial
facilities.

The Turkish side also agreed to provide short-term
training programs for Iraqi engineers and technicians in
Turkey and to organize seminars, meetings and workshops
to this end.

18. The Iraqi side invited the Turkish companies and
Turkish investors to participate in the tenders issued by
the Ministry of Industry and Minerals for supplying raw
materials and spare parts.

19. The Iraqi side submitted to the Turkish side a list
of the industrial facilities to be rented, rehabilitated
and operated by foreign investors and asked active
participation of the Turkish companies to these tenders
as well as to the tenders to be issued in the future.

The Turkish side expressed its readiness to distribute
this information to the relevant Turkish companies and
investors and agreed to encourage them to participate in
these tenders on competitive basis.

V- ENERGY

20. Both sides agreed to develop further cooperation
between the two countries in the field of energy.

21. The Turkish side expressed the desire of the Turkish
companies to actively participate in the development of
petroleum and natural gas fields in Iraq and to supply
material and equipment for the petroleum sector in Iraq.

22. Both sides expressed their interest in the
involvement of the Turkish Petroleum Corporation (TP AO)
in the Gharraf Oil Field Development Project.

23. The two sides underlined the importance of Kirkuk-
Yumurtalik Crude Oil Pipeline (ITP) for exporting of the
Iraqi crude oil. In this framework, the Iraqi side is
determined to take all necessary measures for the proper
functioning and protection of this Pipeline inside the
Iraqi territory.

The Turkish side expressed the readiness of BOT AS to
provide the necessary technical support for the operation
of the ITP.

24. The Iraqi side, upon the request of TOPRAS,
underlined its readiness to consider increasing the
supply of crude oil from Ceyhan Terminal in coming years.

25. The Iraqi side noted the interest of the TPIC in
supplying oil products on the basis of a long-term
contract to be signed with SOMO in accordance with the
Iraqi further needs.

26. Both sides agreed to cooperate in the field of the
oil field services.

27. The Iraqi side conveyed the list of the contracts
signed by Turkish companies and Iraqi state companies
related to Ministry of Oil within the framework of UN Oil
for Food Program and requested the assistance of the
Turkish side for the urgent execution of these contracts,
which had been partially implemented.

28. The Iraqi side submitted a list of the requirements
of the Iraqi Ministry of Electricity. The Turkish side
asked detailed information regarding these requirements
and undertook to convey all these information to the
relevant companies and organizations in Turkey. The
Turkish side agreed to organize a specialized trade
mission in this sector to Iraq, in the first quarter of
2005.

VI- CONTRACTING SERVICES

29. Both sides agreed to establish a sub-committee
comprising the representatives of the relevant
organizations, private and government-owned companies of
both countries in order to further investigate the
cooperation opportunities in fields of the contracting
and consultancy services.

30. The Turkish side indicated its interest in supporting
project development process in Iraq by means of Turkish
consulting engineering companies, and undertook to a
program which summarizes the terms of conditions of
support mentioned a Iraqi side not later than December
2004.

31. Both sides agreed to hold the first meeting of this
committee in the first quarter of 2005.

VII - TECHNICAL COOPERATION

32. Both sides agreed to enhance the technical and
scientific cooperation as vocational training between
their countries in the fields of health, agriculture,
irrigation, petroleum industry, information technologies,
industry, scientific researches and R&D activities.

Both sides agreed to hold the 16th Session of the Turkish-
Iraqi Joint Committee for Economic and Technical
Cooperation in Baghdad, in 2005, on a date to be
determined through the diplomatic channels.

Done and signed in Ankara on November 5, 2004, in two
originals in the English language.

FOR THE GOVERNMENT OF THE REPUBLIC OF TURKEY
Kursad TUZMEN
Minister of State

FOR THE GOVERNMENT OF REPUBLIC OF IRAQ
Thamir GHADHBAN
Minister of Oil

End Text.

4. (u) Baghdad minimize considered.
Edelman

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