SHARP DROP IN SE TURKISH EXPORTS TO SYRIA SEEN

UNCLAS SECTION 01 OF 02 ADANA 000160 SIPDIS SENSITIVE E.O. 12958: N/A TAGS: ETRD ECON EIND EAGR SY IZ TU ADANA SUBJECT: SHARP DROP IN SE TURKISH EXPORTS TO SYRIA SEEN 1.(SBU) Summary: Per local trade data, SE Turkey's border trade with Syria is down sharply this year to date, coming in around USD 72 million in value. Last year's estimated figure ran at USD 95 million, but reflected likely one-time increases in probable Iraq-related trade which business contacts do not expect, at least immediately, to be recurring. From the southeast Turkey business community's perspective, Turkish exports to Syria have yet to match the promise raised with the past year's celebrated exchanges of trade delegations. End Summary. SE Turkey overall export pattern to Syria -------------- -------------- 2.(SBU) According to discussion with chambers of commerce or industry and contacts in the four provinces which trade most with Syria - Gaziantep, Adana, Kilis, and Hatay - annual border area trade with Syria is likely to be about USD 68 million in value in 2004. These four provinces route their exports through the two vehicle/passenger border crossings at Reyhanli in Hatay and along Kilis' border, near the chief Syrian cross-border trading center of Aleppo. Another province, Mardin, which does some minor trade with Syria through the Nusaybin passenger/rail gate, anticipates exporting another USD 4 million in goods this year, as it did last year. Gaziantep's recent trade history with Syria -------------- -------------- 3.(SBU) There is a rise in border trade between Gaziantep, a major SE Turkey industrial city, and Syria, most of which reportedly is accounted for by direct business ties with its sister border city of Aleppo, per local Gaziantep business contacts. 4.(SBU) Gaziantep export levels to Syria from 1997-2004 Year Value (in million dollars) 1997 64.8 1998 85.1 1999 72 2000 33 2001 34.7 2002 22.6 2003 25.2 2004 31.2 (first 11 months) 5.(SBU) What is Gaziantep exporting to Syria (in million dollars)? Year Cereals, Legumes Dried Fruit Textiles 1997 4.1 0.2 60.5 1998 13.4 0.16 71.4 1999 17.8 1 54.1 2000 5.4 27.6 2001 1.2 0.6 29.7 2002 0.9 0.2 22.3 2003 0.3 0.4 24.4 2004 0.5 0.8 30.6 Hatay trade to Syria fluctuating -------------- 6.(SBU) The Antakya Chamber of Commerce, largest in Hatay province, said that it had about USD 8 million in exports to Syria in 2003 and predicts that it will record similar levels this year. Nearby Kilis province said that its 2003 figure was USD 2 million and it expects about the same level this year. Hatay and Kilis primarily export detergent or detergent chemicals, agricultural machinery or machine parts to Syria with an additional smaller trade in nuts, processed food and kitchen wares between Antakya and Syria as well. The Antakya and Iskenderun trade is through the Reyhanli border crossing. ~as Iskenderun sees sharp downturn in 2004 exports to Syria -------------- -------------- -------------- 7.(SBU) The Iskenderun Chamber of Commerce, which last year reported approximately USD 30 million in Syrian exports, is only reporting estimates of USD 7 million for 2004. The differences lies in perceived one-time exports of used and new cars to Syria in 2003, many of which are estimated to have been bound for Iraq from European sources after off-loading at the Iskenderun port last year. (Comment: This matches reports last year from Turkish businessmen working in western and central Iraq of considerable flows of European-origin used cars crossing into Iraq from Syria. End Comment.) The similar year-on-year exports from Iskenderun are steel (note: Iskenderun is a Turkish steel center. End Note.); used cars and car parts, such as filters; marble and packaging materials. Adana has steady trade in a wide range of goods -------------- -------------- 8.(SBU) The Adana Chamber of Commerce reports steady export levels to Syria this year, basically matching 2003's USD 20 million. The Adana region exported a wide array of goods to Syria: plastics; basic chemicals; food and edible oils; electronic equipment; alcohol; soft drinks; tobacco; cement; and optical and medical equipment. ¶9. (U) Baghdad minimize considered. REID