Cablegate: Turkey-Iraq Economic Meeting in November

VZCZCXRO2240
PP RUEHBC RUEHDA RUEHDE RUEHIHL RUEHKUK
DE RUEHAK #5844 2791252
ZNR UUUUU ZZH
P 061252Z OCT 06
FM AMEMBASSY ANKARA
TO RUEHC/SECSTATE WASHDC PRIORITY 9271
INFO RUCPDOC/USDOC WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RUEHIT/AMCONSUL ISTANBUL PRIORITY 1430
RUEHDA/AMCONSUL ADANA PRIORITY 1201
RUCNRAQ/IRAQ COLLECTIVE

UNCLAS ANKARA 005844

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: ETRD ECON IZ TU
SUBJECT: TURKEY-IRAQ ECONOMIC MEETING IN NOVEMBER

Sensitive but Unclassified.

1. (SBU) Summary: The next meeting of the Turkish-Iraqi JEC will
take place November 8-9 in Ankara. An issue-packed agenda (emailed
to Baghdad/ECON) will focus on all aspects of the bilateral economic
relationship, including a potential "preferential agreement" for
bilateral trade and investment and double taxation agreements.
Turkey's exports to Iraq nearly uadrupled between 2003 and 2005,
but this growth came to an abrupt end in 2006. Turkish trade
officials emphasize Iraq's enormous potential and Turkey's desire
for increased trade. End Summary.

2. (SBU) Turkish Foreign Trade Undersecretariat (FTU) officials told
us that the next meeting of the Turkish-Iraqi Joint Committee for
Economic and Technical Cooperation (JEC) will take place in Ankara
on 8-9 November, 2006. The meeting with be chaired by Iraqi Oil
Minister, Hussain al-Shahristani, and Turkish State Minister for
Foreign Trade, Kursad Tuzmen.

3. (SBU) The agenda encompasses a wide array of economic and
technical issues. The two sides will begin with a discussion of a
preferential trade agreement, avoidance of double taxation,
investment protection and reciprocal promotion, and the creation of
Border Trade Centers at the border crossing points.

4. (SBU) In discussing their bilateral trade relations, the two
sides will focus on closing out the remaining Iraqi funds still held
in Turkish banks under the Saddam Hussein-era Border Trade
Agreements (BTAs), which were barter accounts between Iraq and
Turkey during the sanctions period. The parties will also discuss
promotional activities targeting increased bilateral trade, private
and banking sector cooperation, and export financing programs. The
remainder of the two-day meetings will focus on customs,
transportation, energy, services, agriculture, investment and
tourism.

5. (SBU) FTU Acting DG for Agreements, Sevket Ilgac emphasized
Iraq's enormous trade potential and Turkey's strong desire to
strengthen economic ties with the country. In fact, during the
period 2003-2005, Turkey's exports to Iraq nearly quadrupled. This
growth, however, came to an abrupt end in 2006 and has remained at
levels consistent with the same period for 2005. Ilgac opined that
the reason behind this slowdown had to do with problems at the
border crossing between the two countries, including construction
projects and, most recently, customs problems, which caused
transportation between the two countries to slow considerably.
Ilgac added, "Besides, you can't have almost 100 percent growth
every year without end."

6. (SBU) Comment: Ilgac previously served in Iraq and is one of
FTU's most knowledgeable experts on trade with the country. He
personally wants to see Iraqis succeed at self-government and
believes that strengthened trade will assist them in reaching this
goal. In addition, Tuzmen is a major proponent of expanding
Turkey's trade with its neighbors and was an important participant
in an Iraq-Turkey trade promotion fair that occurred in the
southeastern city of Gaziantep (also his parliamentary district).
We continue to encourage Turkish officials at all levels to find
ways to cooperate and increase trade with Iraq and lessen the
bureaucratic and procedural problems that have plagued trade through
the border gate. End comment.
WILSON

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