TURKEY-IRAQ ECONOMIC RELATIONS; UPDATE ON BARTER

UNCLAS SECTION 01 OF 02 ANKARA 003848

SIPDIS


SENSITIVE


DEPT FOR NEA/NGA - NJENSEN AND EUR/SE
DEPT PASS TO USAID FOR OFDA


E.O. 12958: N/A
TAGS: ETRD ENRG EAID EAIR PREL TU IZ
SUBJECT: TURKEY-IRAQ ECONOMIC RELATIONS; UPDATE ON BARTER
DEAL AND PROPOSED AVIATION LINKS


REF: A. ANKARA 3830

B. ANKARA 3777



1. (U) Baghdad minimize considered.


Summary
--------------



2. (SBU) Finance Minister Unakitan told the Ambassador that
the Prime Minister had instructed an interagency group to
resolve the problems holding up trade at the Habur Gate,
including those involved in the Delta Petroleum products
barter arrangement. The Foreign Ministry had followed up
with a letter instructing the Foreign Trade U/S to implement
the Prime Minister,s instruction. He also said the GOT was
interested in establishing civair links with Iraq and asked
for U.S. cooperation. The Foreign Trade Undersecretariat
insisted that there would be no special deal for Delta
Petroleum. MFA and Foreign Trade sources expect
implementation of the opening to Iraqi imports to be effected
sometime during the week of June 16. End Summary.



3. (SBU) On June 13, the Ambassador discussed Turkey,s
planned opening to Iraqi imports, the Delta ) SOMO fuel
barter arrangement, and resumption of air links with Iraq
with Finance Minister Unakitan. Econoff discussed Turkish
lifting of Iraq sanctions with Kaya Turkmen, MFA Deputy
Director General for Bilateral Economic Relations, and with
Tevfik Mengu, the Foreign Trade Undersecretariat,s Director
General for Agreements, the same day.


Lifting Sanctions on Imports from Iraq
--------------



4. (SBU) Unakitan told the Ambassador that he had met with
the Minister of Foreign Affairs, the State Minister for
Foreign Trade, and the Interior Minister on June 11 at the
direction of the Prime Minister to resolve problems at the
Habur Gate. Unakitan stated that the barter of gasoline and
liquid petroleum gas for Iraqi crude oil would go forward,
and that MFA would send a letter to Foreign Trade to enable
Delta Petroleum to begin implementing the barter arrangement.
Unakitan in fact invited the Delta Petroleum General
Director to attend part of the meeting with the Ambassador,
and suggested that Delta follow up with MFA and the Foreign
Trade U/S. Unakitan raised the issue of KDP levies on
Turkish trucks entering Iraq. The Ambassador responded that
the KDP had recently cut its fees to USD 20 per truck, based
on information we had received (but not confirmed).



5. (SBU) Turkmen told Econoff that MFA had sent a letter to
the Prime Ministry June 13 requesting issuance of
instructions to all relevant GOT bodies to open the Habur
border crossing to Iraqi imports. Turkmen believes this will
be implemented sometime during the week of June 16. With
regard to the Delta import/export arrangement, Turkmen
confirmed that MFA sent a letter to U/S Foreign Trade
requesting specific authorization for the fuel import/export
with Iraq to begin immediately.



6. (SBU) Mengu confirmed that Foreign Trade had received
MFA,s letter on Delta, but insisted that there would be no
special deal for Delta. Mengu maintained that Delta would be
able to implement its barter arrangement when Turkey lifted
remaining sanctions on Iraqi imports. He predicted that this
would happen within several days. Mengu also raised the
issue of KDP taxation of Turkish trucks, but stated that
Turkey,s opening to Iraqi imports was not linked to an end
to KDP fee collection. Econoff responded that coalition
authorities were working toward elimination of customs fees
at all of Iraq,s border crossings.


Aviation
--------------



7. (SBU) Unakitan told the Ambassador that the GOT is
interested in starting flights between Baghdad and Istanbul
as soon as possible, and requested U.S. cooperation in this
matter. The Ambassador responded that the Embassy would
follow up on this issue. Note: See ref B on establishing
civilian air control between Iraq and Turkey. End Note.
Pearson
PEARSON