Meeting at Turkish Foreign Trade Regarding WTO Rice

UNCLAS SECTION 01 OF 02 ANKARA 006775

SIPDIS

SENSITIVE

STATE FOR EUR/SE, EB/EPD, AND EB/TPP/ABT
DEPT PLEASE PASS USTR FOR JWeiss
USDA FOR FAS FOR ITP/ LBennett/ELeier
USDOC FOR DEFALCO
GENEVA FOR AGR/Schmick

E.O. 12958: N/A
TAGS: ETRD EAGR PGOV PREL GR TU
SUBJECT: Meeting at Turkish Foreign Trade Regarding WTO Rice


Sensitive but Unclassified. Not for Internet Distribution.


1. (SBU) Summary. The Turkish Under Secretariat for
Foreign Trade has requested the U.S. response for dates in
Geneva for consultations in connection with the U.S. WTO
case concerning Turkey's import rice regime as well as data
regarding the case. Turkish officials expressed the desire
to resolve this issue as soon as possible. End Summary.

--------------
Meeting at Foreign Trade
--------------


2. (SBU) On November 16, the Turkish Under Secretariat for
Foreign Trade requested a meeting with Embassy officials to
discuss the United States request for consultations with the
government of Turkey (GOT) concerning Turkey's import rice
regime. Hasan Yalcin, the Acting Deputy Director General of
Agreements, led the discussions. Yalcin expressed the
desire to resolve the issue as soon as possible and
hopefully without going to panel.

--------------
Two Requests
--------------


3. (SBU) Yalcin initiated the discussions by requesting all
data related to the case. AgCounselor explained that his
request would be sent to Washington, but that, given the
sensitivity of the case, that the Embassy was not authorized
to provide any data or discuss any details of the case.
Yalcin appeared somewhat miffed at this response. Yalcin
then requested a response from Washington regarding the
dates of the meetings in Geneva. EconOfficer promised to
contact Washington for a quick response.

--------------
The GOT Tries to Make Its Case
--------------


4. (SBU) At this point, Yalcin requested another FTU
official to provide some information regarding the Turkish
import regime. The official explained the development of
the tariff rate quota (TRQ) and the reduction in duties
under the quota, which favored paddy rice imports. At the
same time, the official noted that imports would not be
restricted outside the TRQ. It was noted that Turkey
imports over 50% of its demand and that the stronger Turkish
lira had made imports much cheaper. Interestingly, the
official noted that Egyptian milled rice imports had
benefited prior to the implementation of the TRQ and the
under the current rice regime U.S. paddy rice imports would
be much more favored. AgCounselor asked whether it was the
GOT position that the TRQ was implemented to favor U.S.
rice. He responded that we could make that case. The
official stated that, in the absence of the TRQ, Egyptian
rice would be favored over U.S. rice.

--------------
TRQ Not Intended to Impede Trade
--------------


5. (SBU) The same official defended the import regime,
stating that it was never intended to inhibit trade. In an
interesting twist, the official stated that, if Turkey
wanted to restrict imports, it could always delay the
process at customs in order to make imports wait longer than
the current one of two days. In addition, Turkey could
limit the ports in which imports could enter.

--------------
Comment: Let's Make a Deal
--------------


6. (SBU) It appeared that Turkish officials would like to
reach some sort of agreement asap and certainly prior to
going to panel. At one point, an official offered that the
duty under the TRQ might be lowered by another 10% next year
for paddy rice. The officials also seemed to focus
primarily on trade statistics rather than on the legislation
or domestic purchase requirements. It seems that they
believe that the actual TRQ and purchase requirements are
WTO compliant.

MCELDOWNEY