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Cablegate: Update On Turkish Limits On Chinese Textile

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

UNCLAS ANKARA 001109

SIPDIS

DEPT FOR EB/TPP/ABT - EHEARTNEY AND EUR/SE
COMMERCE FOR ITA/OTEXA/MARIA D'ANDREA
DEPT PASS USTR FOR LERRION
TREASURY FOR INTERNATIONAL AFFAIRS

SENSITIVE

E.O. 12958: N/A
TAGS: ETRD KTEX TU CH
SUBJECT: UPDATE ON TURKISH LIMITS ON CHINESE TEXTILE
AND APPAREL IMPORTS

Ref: (A) Ankara 129 (B) Beijing 2518

1. (SBU) Shortly after imposing surveillance and
protective measures against 42 categories of Chinese
textile and apparel imports in connection with section
242 of the Working Party report, GOT and Chinese
officials held consultations in Ankara in late January.
Both the Chinese Ambassador to Turkey and FM Gul, who
visited China in early February, told the press that
the GOC hoped to avoid bilateral friction through
dialogue. Murat Yapici, the Foreign Trade
Undersecretariat's (FTU) Deputy Director General for
Imports, told us February 11 that the Chinese
delegation objected strenuously to Turkey's action, but
that the Turkish side had no intention of backing away
from these measures. However, Yapici disclosed that a
number of Turkish importers with large Chinese
procurement contracts were protesting FTU's action.

2. (SBU) Yapici stressed that these measures were very
different from the standard safeguard mechanism.
Section 242 measures not only allow the Chinese to
maintain market share, but also to increase their
exports within prescribed limits. Yapici said the GOC
was concerned that: 1) other countries may follow
Turkey's example in taking 242 measures; and 2) section
242 may be interpreted in such a way as to reestablish
a quota system against Chinese goods.

3. (SBU) Econoff asked Yapici and, separately,
Cemalettin Damlaci, FTU's Director General for the EU,
whether Turkey had consulted with Brussels on section
242 measures against China. Yapici told us that the EU
did not have any reaction to the measures.
Damlaci responded that the customs union required
Turkey to coordinate many external commercial policies,
particularly third country quota and trade preferences,
but not anti-dumping and related measures. In fact,
the EU and Turkey have imposed these measures against
one another. In a separate meeting with Econ Counselor
and Econoff on February 11, Tevfik Mengu, FTU Director
General for Agreements, commented that the 242 measures
could create problems within the customs union with the
strong possibility of Chinese textile transshipments to
Turkey via EU countries. Conversely, Ulrike Hauer, the
Head of the Trade, Economy and Agriculture Section at
the EC Delegation, told Econ Couns and Econoff in early
February that it was "odd" within the customs union
framework that the Turks had taken action against China
without consulting with Brussels, but that the EC did
not plan to raise this issue with the GOT at present.

4. (U) As in previous meetings on this subject, FTU
told us it was monitoring U.S. textile trade actions
against China closely, and asked Econoff to continue to
provide updates. In particular, Yapici asked for
further information on the legislative prospects on the
draft Fair Wage, Competition, and Investment Act of
2005 (Senate Bill 14), which aims to impose an
additional duty on all imports from China unless the
GOC revalues its currency.
Edelman

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