TURKEY-IRAQ ECONOMIC MEETING IN NOVEMBER

UNCLAS ANKARA 005844 SIPDIS SENSITIVE SIPDIS E.O. 12958: N/A TAGS: ETRD ECON IZ TU SUBJECT: TURKEY-IRAQ ECONOMIC MEETING IN NOVEMBER Sensitive but Unclassified. ¶1. (SBU) Summary: The next meeting of the Turkish-Iraqi JEC will take place November 8-9 in Ankara. An issue-packed agenda (emailed to Baghdad/ECON) will focus on all aspects of the bilateral economic relationship, including a potential "preferential agreement" for bilateral trade and investment and double taxation agreements. Turkey's exports to Iraq nearly uadrupled between 2003 and 2005, but this growth came to an abrupt end in 2006. Turkish trade officials emphasize Iraq's enormous potential and Turkey's desire for increased trade. End Summary. ¶2. (SBU) Turkish Foreign Trade Undersecretariat (FTU) officials told us that the next meeting of the Turkish-Iraqi Joint Committee for Economic and Technical Cooperation (JEC) will take place in Ankara on 8-9 November, 2006. The meeting with be chaired by Iraqi Oil Minister, Hussain al-Shahristani, and Turkish State Minister for Foreign Trade, Kursad Tuzmen. ¶3. (SBU) The agenda encompasses a wide array of economic and technical issues. The two sides will begin with a discussion of a preferential trade agreement, avoidance of double taxation, investment protection and reciprocal promotion, and the creation of Border Trade Centers at the border crossing points. ¶4. (SBU) In discussing their bilateral trade relations, the two sides will focus on closing out the remaining Iraqi funds still held in Turkish banks under the Saddam Hussein-era Border Trade Agreements (BTAs),which were barter accounts between Iraq and Turkey during the sanctions period. The parties will also discuss promotional activities targeting increased bilateral trade, private and banking sector cooperation, and export financing programs. The remainder of the two-day meetings will focus on customs, transportation, energy, services, agriculture, investment and tourism. ¶5. (SBU) FTU Acting DG for Agreements, Sevket Ilgac emphasized Iraq's enormous trade potential and Turkey's strong desire to strengthen economic ties with the country. In fact, during the period 2003-2005, Turkey's exports to Iraq nearly quadrupled. This growth, however, came to an abrupt end in 2006 and has remained at levels consistent with the same period for 2005. Ilgac opined that the reason behind this slowdown had to do with problems at the border crossing between the two countries, including construction projects and, most recently, customs problems, which caused transportation between the two countries to slow considerably. Ilgac added, "Besides, you can't have almost 100 percent growth every year without end." ¶6. (SBU) Comment: Ilgac previously served in Iraq and is one of FTU's most knowledgeable experts on trade with the country. He personally wants to see Iraqis succeed at self-government and believes that strengthened trade will assist them in reaching this goal. In addition, Tuzmen is a major proponent of expanding Turkey's trade with its neighbors and was an important participant in an Iraq-Turkey trade promotion fair that occurred in the southeastern city of Gaziantep (also his parliamentary district). We continue to encourage Turkish officials at all levels to find ways to cooperate and increase trade with Iraq and lessen the bureaucratic and procedural problems that have plagued trade through the border gate. End comment. WILSON