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Cablegate: Turkey Scenesetter for Codel Costello, August

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OO RUEHAG
DE RUEHIT #0722/01 2211235
ZNR UUUUU ZZH
O 091235Z AUG 07
FM AMCONSUL ISTANBUL
TO RUEHC/SECSTATE WASHDC IMMEDIATE 7387
INFO RUEHAK/AMEMBASSY ANKARA IMMEDIATE 6945
RUEHRL/AMEMBASSY BERLIN IMMEDIATE 0288
RUEHRO/AMEMBASSY ROME IMMEDIATE 1128
RUEHTU/AMEMBASSY TUNIS IMMEDIATE 0011
RUEHVB/AMEMBASSY ZAGREB IMMEDIATE 0039
RUEHAG/AMCONSUL HAMBURG IMMEDIATE

UNCLAS SECTION 01 OF 03 ISTANBUL 000722

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: OREP AMGT ASEC AFIN TU
SUBJECT: TURKEY SCENESETTER FOR CODEL COSTELLO, AUGUST
20-22, 2007

REF: STATE 107590

1. (SBU) Summary: Turkey's ruling Justice and Development
Party (AKP), which scored a significant victory in recent
elections, was given the mandate to form another single-party
government. AKP is expected to continue to pursue its
economic and political reform policies. On Iraq, Turkey
continues to be an essential partner, supporting coalition
forces by allowing use of its territory as logistical hub.
The single biggest obstacle to bilateral relations is PKK
terrorism. Turkey has repeatedly expressed impatience at the
lack of U.S. action against PKK terrorists in northern Iraq
and has threatened to strike at PKK targets across the border
if the U.S. or Iraq does not act. A U.S. Congressional
Armenian genocide resolution would likely jeopardize U.S.
national security interests in Turkey and Iraq, and
complicate the security environment for U.S. citizens and USG
personnel and work against those in Turkey calling for a
collaborate look at 1915 events. Turkey's economy has
achieved five years of GDP growth averaging over 7% -- the
highest rate of any OECD country. Because of its strategic
location, Turkey aspires to increase its role as an energy
transit country by piping natural gas to meet Europe's
growing needs, and will soon begin transporting gas from
Azerbaijan to Greece. End summary.

ISTANBUL AGENDA

2. (SBU) Transportation and port safety as well as efficient
operation of commercial aircraft repair stations are
important issues in Istanbul. Your schedule includes visits
to Turkish-government run facilities at the Haydarpasa
container port facility and the Ship Traffic Administration
and Information System (VTS) for the Turkish straits. At the
MNG Maintenance Repair Facility, you will be able to review
commercial aircraft repair operations in Istanbul. The
Deputy Chief of Mission will brief you on bilateral issues of
importance and you will have the opportunity to meet
newly-elected Members of Parliament. You will also meet
leading members of Istanbul,s business community during a
meeting with Turkish-U.S. Business Council (TAIK)
representatives who work to expand trade and commercial ties
with the United States.

MISSION TURKEY

3. (SBU) Mission Turkey consists of four posts: Embassy
Ankara, Consulate General Istanbul, Consulate Adana, and a
two-person Consular Agency in Izmir. Country-wide, there are
currently about 300 American positions and almost 700 locally
employed staff (LES) working for over 20 agencies throughout
the Mission. The Mission's FY 2007 operating budget was $30
million. Mission Turkey is scheduled for a New Embassy
Compound (NEC), with construction set to begin in 2010.

TRANSPORTATION SECURITY/SAFETY

4. (SBU) With 7200 km of coastline (compared to 2648 km of
land boundaries), port security is important to Turkey, which
actively participates in the International Maritime
Organization's (IMO) port security and safety programs.
Istanbul hosted the most recent session of the IMO's Maritime
Safety Committee in November 2006. Turkey's Maritime
Undersecretariat and Coast Guard officials cooperate with our
Coast Guard liaisons who perform periodic assessments of
Turkey's IMO International Ship and Port Security (ISPS) Code
compliance, from which Turkish ports have regularly scored
high marks. Most of Turkey's major ports have been
privatized, and more (including the ports of Mersin and
Izmir), have been tendered to begin privatization this year.
Turkish maritime officials hope enhanced technology and thus
safety and security will result. DHS, State Department and
embassy officials are currently in final discussions with the
GOT to implement the DHS Container Security Initiative (CSI)
at the port of Izmir (a process that has taken several
years), from which most goods destined for the United States
originate. Turkey is also an active member of the
International Civil Aviation Organization (ICAO). Turkish
officials have coordinated with U.S. civil aviation officials
at ICAO and have supported many of our proposals to enhance
aviation safety and security.

TRADE

5. (SBU) With two-way bilateral trade around $10 billion,

ISTANBUL 00000722 002 OF 003


roughly in balance between exports and imports, the U.S. is
an important trading partner for Turkey. However, about half
of Turkey's trade is with the EU, and Turkish trade with the
Middle East, African and former Soviet Union countries is
growing. As Turkey's total trade volume -- both exports and
imports -- grows, the U.S. share in Turkey's trade is
declining.

6. (SBU) Deepening bilateral economic and business ties is a
key priority of the Shared Vision and Structured Dialogue
announced by Secretary Rice and Foreign Minister Gul in July
2006. To help catalyze closer economic ties, the U.S. and
Turkey held a meeting of the bilateral Economic Partnership
Commission (EPC) in February, 2007, co-chaired by the Under
Secretary of the Turkish Foreign Ministry and State

SIPDIS
Department Assistant Secretary for Economic, Energy and
Business Affairs Daniel Sullivan. The EPC laid out an action
plan that both sides are working to implement.

ENERGY ISSUES

7. (U) Turkey imports nearly all of its oil and natural gas.
However, Turkey's strategic location, between Europe and the
Middle East and Caspian regions, makes Turkey an important
energy transit country. More than 3 million bbl of Caspian
oil pass every day through the Bosphorus Straits, and nearly
1 million bbl/d of oil pass through the Baku-Tbilisi-Ceyhan
(BTC) pipeline, the first transnational pipeline for Caspian
oil that does not cross Russian soil. Turkey aspires to
increase its role as an energy transit country by piping
natural gas to meet Europe's growing needs. Turkey will soon
begin transporting gas from Azerbaijan to Greece; the first
time Europe will receive Caspian gas by a non-Russian route.
Turkey also aspires to construct the larger Nabucco pipeline
to deliver natural gas across Turkey to Austria. The USG
supports Nabucco, but only if it is filled with non-Iranian
gas from Azerbaijan, Turkmenistan, Kazakhstan and possibly
Iraq. Recent Russian announcements that reinforce its hold
on Turkmen gas and bypassing Turkey to sell gas to Italy,
spurred Turkey to announce a preliminary MOU with Iran on a
future gas deal, which we have protested.

HOUSE RESOLUTION ON ARMENIAN GENOCIDE

8. (SBU) The USG has worked hard to encourage a candid
discussion in Turkey of the tragedy suffered by ethnic
Armenians during World War I. The Turkish and Armenian
governments have discussed establishing commissions of
academics and historians from Turkey and Armenia to establish
the facts, in parallel with efforts to reestablish official
bilateral relations. A U.S. Congressional resolution
labeling this tragedy a "genocide" would trigger an intensely
negative and nationalist response, and would work against
those voices in Turkey that are calling for a comprehensive
exploration of these events and for normalizing bilateral
relations with Armenia.

9. (SBU) A resolution would also have negative consequences
for U.S. national security interests in Iraq and elsewhere.
Supply routes into Iraq that are crucial to supporting U.S.
troops, military overflights and use of Turkish bases that
support U.S. military operations in Iraq and Afghanistan
could be jeopardized. Additionally, major defense
procurement contracts with U.S. manufacturers (with expected
and potential sales exceeding $10 billion) could be scrapped.
Agricultural purchases might also be canceled and consumer
boycotts could ensue. Anti-Americanism in Turkey would
likely intensify, increasing the threat level for U.S.
citizens and USG personnel living and working in Turkey.

IRAQ/PKK

10. (SBU) For over 22 years, the PKK has conducted a
terrorist campaign that has resulted in the deaths of about
37,000 Turks. Increased violence from attacks conducted from
strongholds in northern Iraq have killed some 700 in 2006 and
2007 and have prompted the government and military to warn of
possible cross-border operations into Iraq. The USG has
strongly discouraged this, citing Iraqi sovereignty and the
risk of increased instability. The United States has been
Turkey's closest ally in the fight against the PKK, securing
EU agreement to place the PKK on its list of terrorist
organizations; spear-heading Europe-wide effort to close PKK
financial, logistical, and media support outlets there; and
leading a trilateral (US/TU/IZ) process to stop the threat

ISTANBUL 00000722 003 OF 003


emanating from northern Iraq.

11. (SBU) Iraq remains a major concern for Turkey. Turkey
worries about increasing instability in Iraq, growing Iranian
influence in the region, and the potential for Iraq to
splinter along sectarian or ethnic lines. Turkish political
leaders have sought to reinforce Iraq's unity and territorial
integrity, and have been among the most active of Iraq's
neighbors in the Iraq Neighbors Process.

12. (SBU) Turkey's agreement to the use of its territory as a
logistical hub has been a combat multiplier for our Iraq
operations. Approximately 3 million gallons per day of
gasoline and diesel fuel for the Iraqi people and 25% of
sustainment fuel for coalition forces crosses into Iraq
through the Ground Line of Communication at Habur Border
Gate. Since May 2005 when Turkey approved the use of
Incirlik Air Base as a cargo hub to support coalition
operations in Iraq, over 152 million pounds of equipment have
been shipped to U.S. troops. Over 50% of all air cargo into
Iraq has transited the Incirlik cargo hub.

EU ACCESSION

13. (U) A double-election year contributed to the GOT's
failure to enact reform on some high-profile political
issues, even while technical-level EU harmonization
continued. Turkish officials are concerned that the EU's
December annual progress report could recommend suspension of
additional chapters. The Turkish public, meanwhile, has
grown increasingly skeptical of the EU venture, in large part
as a reaction to Euro-skepticism of Turkey. AKP, as
historically the party most committed to Turkey's EU
membership, now has the chance to use its electoral mandate
to breathe new life into the process.

ELECTION RESULTS

14. (U) Turkey's ruling AKP scored a significant victory in
July 22 parliamentary elections, returning to power with 46%
of the vote, up from 34% in the 2002 election. Two other
parties crossed the ten percent election threshold required
to enter parliament, along with 26 independent candidates,
creating a fractious if more representative legislature.
President Sezer gave Prime Minister Erdogan the mandate to
form another single-party government on August 6; a new
cabinet is expected to be announced soon. With 341 of
parliament's 550 seats, AKP returns with a reduced majority
and short - on its own - of the 367 seats needed to elect the
next president or amend Turkey's military-drafted
constitution. The opposition CHP, with 20% of the vote, lost
seats in several of its strongholds. Commentators view the
results as the opposition's failure as much as AKP's success.
The new parliament was sworn in on August 4; election of a
Speaker, formation of a new government and election of
Turkey's next president will top the agenda.
OUDKIRK

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