PRIVATE IRAQ TRADE MEETING SHOWS DIVERGING BUSINESS,

UNCLAS SECTION 01 OF 02 ADANA 000063

SIPDIS

SENSITIVE

NOT FOR INTERNET DISTRO

E.O. 12958: N/A
TAGS: ETRD ECON ELTN IZ TU ADANA
SUBJECT: PRIVATE IRAQ TRADE MEETING SHOWS DIVERGING BUSINESS,
GOVERNMENT VIEWS



1. (SBU) Summary: A regional Turkish-American Business
Association discussion of Iraq trade on March 18 in Iskenderun
yielded some proposals from the Turkish business sector to
expand their role in Iraq trade and profiled government
involvement in the Iraq issue which seemed out of tune to
business participants. End Summary.

2.(SBU) On March 18, AMCON Adana PO participated in a panel
discussion of Turkish-Iraqi trade attended by Hatay governor
Abdulkadir Sari, Antakya AK Party MP Mehmet Soydan, the
Iskenderun sub-governor, Iskenderun mayor, national TABA
president Adana Tas, DEIK Chairman of the Turkish-Iraqi Business
Council Ercument Aksoy and regional TABA chair Erdal Kamisli, as
well as about 200 TABA members and press.


3. (SBU) Aksoy and Tas both emphasized the expanded
opportunities for Turkish investment, as well as trade, in Iraq,
noting that Turkish companies are very active in Iraq and
receiving considerable contract awards. They called for
speedier transition toward rule of law, particularly for
contractual purposes, and establishment of a functional Iraqi
banking system as desired systemic improvements to the Iraqi
economy. They also said that transportation security is a
continued high priority for traders, but noted some limited,
gradual improvement. DEIK proposed EX-IM bank financing of, and
OPIC insurance coverage for, joint Iraqi-Turkish
build-operate-transfer contracts in Iraq. Both TABA and DEIK
complained that no companies were writing adequate insurance
policies for Iraq.


4.(SBU) Aksoy also pointed out that Turkish private sector
relative success came despite a "visionless" Turkish foreign
policy toward Iraq and "little or no (Turkish) government
appreciation of the changes taking place in Iraq." Tas noted
that, while the press was full of stories about U.S.-Turkish
clashes on Iraq policy, these reports should be discounted. He
said that "while some short-term tactical differences
occasionally may arise, Turkey and the U.S want and see the same
things on the big important points and their policies largely
coincide." He also commented that the Hatay governor used the
term "strategic" several times in his remarks, but could not
"explain what that term meant in relation to Iraq because the
government had no Iraq policy. "

5.(SBU) Although initially not scheduled to address the TABA
meeting, the Hatay governor briefly spoke and said that more
trade between Turkey and Iraq was desirable, but that Turkey was
handicapped by structural problems in Iraq. He said that the
chief problems for Turkish trade with Iraq were security and
political instability in Iraq. Looking directly at AMCON Adana
PO, he also said that it was incumbent on regional partners to
"fight terrorism everywhere." (Comment: this was a clear
reference to engaging the PKK in northern Iraq more kinetically.
End Comment.) Soydan followed the governor and echoed his
concerns about security in Iraq for Turkish commerce, especially
truckers, and complained that Turkish companies did not enjoy
access to the levels where decisions on large contracts are
being made. In a Q&A when AMCON Adana PO spoke, Soydan pressed
this point, saying that UN sanctions on Iraq, which he said the
U.S. had backed, had greatly damaged southeast Turkey's regional
economy, and Turkish companies deserved preferential access to
Iraqi contracts as compensation. He also discounted the
importance of competitive bidding as described by PO and
suggested that he did not see the relevance for Federal
Acquisition Regulations in the public tender process.

6.(SBU) PO noted that Turkey's companies were faring well in
Iraqi business, which Soydan doubted, and affirmed that Iraqi
contracting was done on a competitive basis. PO also countered
the pessimistic view of developments in Iraq, noting the
election process, ongoing government formation and prospect of a
new constitution in the coming months, all within the framework
of Iraqi inter-ethnic political dialogue. Tas and Aksoy both
corrected the MP's impression of poor Turkish performance in
Iraq, noting the broad participation of Turkish companies in
multiple sectors of the Iraqi economy.


7. (SBU) Kamisli also pressed the MP to "get the (Turkish)
government engaged where it can really help," pointing to the
immediate need for an improved and regularly maintained road
from Gaziantep to Silopi as well as a "functional border
crossing or two."

8.(SBU) Comment: According to business contacts, the TABA
meeting profiled Turkish government involvement in the Iraq
trade issue which seemed out of tune to business participants.
It also seemed as if the governor and MP genuinely were not
aware of the trilateral dialogue on transportation security or
the current manner in which Turkish companies already are at
work in Iraq. It is also worth noting the MP's conviction that
contracting awards in Iraq must be decided in some less
transparent form than through FAR-based public tenders and
online dissemination. End Comment.

9.(U) Baghdad minimize considered.