TURKS RAISE ISSUE OF FUTURE TRADE WITH IRAQ

C O N F I D E N T I A L ANKARA 008932

SIPDIS


STATE ALSO FOR E, EUR/SE AND EB/TPP
TREASURY FOR OASIA - MILLS AND LECHTER
STATE PASS USTR FOR NOVELLI/BIRDSEY


E.O. 12958: DECL: 12/11/2012
TAGS: ETRD ECON PREL TU IZ
SUBJECT: TURKS RAISE ISSUE OF FUTURE TRADE WITH IRAQ


Classified by Charge d'Affaires Robert Deutsch. Reason:
1.5(b,d)



1. (C) Foreign Trade Under Secretary Tuncer Kayalar told us
December 11 that, in the event of a military operation in
Iraq, Turkey would seek USG and United Nations support for
some kind of preferred trade status to enable it to re-start
exports to Iraq quickly and on a large scale. He argued that
such a status would help make up for the trade losses Turkey
has suffered since 1991 and would expect to suffer in the
event of a military operation.



2. (C) Kayalar was not clear on exactly what Turkey would be
looking for, but suggested the UN could provide Turkey with
preferred status that would enable it to export humanitarian
goods during an operation (he mentioned Article 50 status in
this context) and a broader range of goods and services after
an operation. He explained that the GOT assumed some kind of
international authority would control a post-operation Iraq
for a lengthy period, and would be able to -- in effect --
direct contracts to Turkey.



3. (C) Kayalar noted that State Minister Ali Babacan and
others had focused on Turkey's financial difficulties and
needs in the event of an operation, but suggested that
support for Turkey on the trade side would also be important.
We responded that any discussion at this point would be
highly speculative, but pointed to U.S.-Turkish cooperation
on Afghan reconstruction as an indication of how our two
governments could facilitate successful business partnerships
in previously off-limits countries.



4. (C) Comment: Kayalar and his boss, State Minister
Kursad Tuzmen, are strong advocates of Turkey developing
stronger trade relations with its neighbors, including Iraq.
We would expect this initial pitch by Kayalar to turn into a
steady drumbeat as the GOT presses its case for preferential
treatment. In fact, Turkey is well-placed on its own to take
full economic advantage of the economic opportunities that
would arise should Iraq return to the international
community.
DEUTSCH