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
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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
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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
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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
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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
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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