TURKEY'S SIDE OF THE STORY: TURKEY-GEORGIA FTA

C O N F I D E N T I A L ANKARA 006068

SIPDIS

SIPDIS

E.O. 12958: DECL: 10/19/2016
TAGS: PREL ECON ETRD TU GG
SUBJECT: TURKEY'S SIDE OF THE STORY: TURKEY-GEORGIA FTA

REF: A. TBILISI 2746


B. ANKARA 1568

Classified By: Econ. Counselor Thomas Goldberger for reasons 1.5 (b) &
(d)


1. (C) Summary: According to Turkish trade officials, a
Turkey-Georgia preferential trade agreement (ref A) is still
being negotiated and includes a very limited list of
agricultural and industrial goods. While in theory Turkey's
participation in a customs union agreement with the EU could
complicate implementation of this agreement, Turkish
officials do not anticipate this because it does not cover
Georgian exports of industrial goods. It is possible that
the Turks are using the EU excuse as a bargaining tactic in
the ongoing negotiations, as it seems that there are other
areas of non-agreement. End Summary.


2. (SBU) Foreign Trade Undersecretariat (FTU) officials told
us that they are still conducting negotiations with Georgia
over a preferential trade agreement that would include a very
limited list of agricultural and industrial goods. They said
that while in theory there could be some legal issues with
the Customs Union agreement with the EU, in reality they do
not anticipate problems because this agreement does not
include Turkish imports of Georgian industrial goods. They
added that the last meeting between the two sides occurred
about 10 days ago.


3. (SBU) EC representatives in Ankara were not aware of a
potential preferential trade agreement between Turkey and
Georgia. They told us that, in theory, Turkey cannot and
should not enter into such an agreement with a country that
does not have such an agreement with the EU. In the Ankara
Plan that outlined Turkey's participation in the Customs
Union, the GOT is expected to abide by the Common Customs
Policy. EC reps told us that Turkey can enter into
unilateral agreements in which a country agrees to provide it
with certain trade benefits. While the Customs Union covers
only industrial products -- which cannot be negotiated
without EC approval -- the EU reps told us that the Ankara
Plan includes references to agriculture and services, which
could ultimately be subject to interpretation.


4. (SBU) Turkish trade agreements with Mediterranean
countries are concluded under the so-called "Euro-Med
Partnership," which, along with the Customs Union, requires
that Turkey conclude trade agreements parallel to EU trade
agreements with these countries. Specifically, the GOT has
not yet ratified an FTA with Syria under the Euro-Med
partnership, apparently because the EU has also not proceeded
with implementation of its agreement (ref B). Euro-Med
participants include the 25 member states and Algeria, Egypt,
Israel, Jordan, Lebanon, Morocco, the Palestinian Authority,
Syria, and Tunisia, as well as Turkey.


5. (C) Comment. Our discussions with officials in Ankara
suggest that Georgia's PM (ref A) may not have both sides of
the story. Since the requirement for EU approval appears to
be more theoretical than real, the Turks may be using the
claim as a negotiating tactic. We would not recommend
raising this with the European Commission at this time
because it could potentially hinder rather than assist the
ongoing negotiations by bringing the Commission into the mix
prior to a final agreement. End Comment.

Visit Ankara's Classified Web Site at
http://ww.state.sgov.gov/p/eur/ankara/

WILSON