A/S SULLIVAN WITH MFA U/S APAKAN ON TURKEY'S

UNCLAS SECTION 01 OF 02 ANKARA 002422 SIPDIS SIPDIS SENSITIVE DEPT PLEASE PASS USTR FOR MMOWREY DEPT PLEASE PASS USTR FOR DSTEIN DOC/MAC FOR CRUSNAK E.O. 12958: N/A TAGS: ETRD ECON ENRG TU SUBJECT: A/S SULLIVAN WITH MFA U/S APAKAN ON TURKEY'S ECONOMIC SUCCESS, EPC FOLLOW-UP REF: ANKARA 555 ¶1. (SBU) Summary: During a September 20 meeting with MFA Undersecretary Ertugrul Apakan, EEB A/S Sullivan raised the progress made on action items identified at the February U.S.-Turkey Economic Partnership Commission (EPC),an event showcasing Turkey that A/S Sullivan plans to host on the margins of the October World Bank/IMF meetings in Washington, DC, Reconstruction Opportunity Zones (ROZs) in Afghanistan and Pakistan, updating the U.S.-Turkey Bilateral Investment Treaty (BIT),and possible additional areas for U.S.-Turkish cooperation. End summary. U.S.-Turkish Industrial Cooperation: JPOs and ROZs -------------- -------------- ¶2. (SBU) Both sides agreed that we have accomplished many of the items on the EPC Action Plan, but that work remains to be done before next year's meeting. A/S Sullivan proposed early 2008 in Washington, DC for the next EPC meeting. A/S Sullivan outlined his recent meeting in Washington, DC with Turkish Union of Chambers and Commodities Exchanges (TOBB) President Rifat Hisarciklioglu. During that meeting, they discussed the concept of Turkey-U.S. Joint Production Opportunities (JPOs),an idea that originated at the February EPC Meeting. A/S Sullivan explained two possible places for cooperation, first in the existing West Bank Territory and potential established free trade zones there, and second in newly established Reconstruction Opportunity Zones in Pakistan and Afghanistan, on which A/S Sullivan is working on behalf of President Bush to gain approval by Congress. Both areas would provide duty-free exports to the U.S. on a wide range of products, and A/S Sullivan welcomed Turkish participation in these areas. Science & Technology Agreement and Education Exchanges -------------- -------------- ¶3. (SBU) U/S Apakan mentioned the latest draft of the U.S.-Turkey Science and Technology Agreement, which was presented to the MFA in March and from which we have not yet gotten a response. U/S Apakan explained that the MFA is still working with the Scientific and Technological Research Council of Turkey (TUBITAK) to get their feedback and buy-in into the agreement, but that he thought such an agreement would be very important. He asked about the two items on the EPC Action Plan related to university exchanges and U.S. professor visits. The DCM updated them on the work PAO has done to identify and inventory existing exchange programs with Turkish universities. In addition, A/S Sullivan mentioned U/S Hughes' bureau s interest in a potential visit of university professors to Turkey and promised to follow-up on this issue. Transportation and the "New Silk Road" -------------- ¶4. (SBU) U/S Apakan mentioned Turkey's concentration on improving infrastructure in the region and creating a "new silk road" that would provide efficient land transportation from China to Brussels. Apakan focused on transportation to, from and through the Central Asian (the "Turkic") Republics, Russia, and the Caucuses. He also mentioned the need for greater maritime transportation cooperation between Black Sea and Mediterranean countries. Turkey is currently discussing how to combine land, sea and aviation transportation, energy and water in the region and Apakan appealed for U.S. investment and cooperation in these areas. A/S Sullivan spoke of Secretary Rice's interest in the region and developing land transportation not just east to west but also north to south from Central Asia to India. He mentioned some of the infrastructure projects currently supported by the U.S., including bridges and road construction, a trans-Caspian pipeline feasibility study, and USTDA's Central Asian telecom conference, an action item on the EPC that Turkish representatives also attended. Turkey Event on the Margins of October Bank/Fund Meetings -------------- -------------- ¶5. (SBU) A/S Sullivan described his vision for the Turkey ANKARA 00002422 002 OF 002 event he plans to host on the margins of the World Bank/IMF Meetings in October. He wants to give senior Turkish officials the opportunity to tell their success story on battling inflation while achieving economic growth to senior U.S. officials and to U.S. businessmen. A/S Sullivan mentioned a similar event sponsored in part by TOBB in New York prior to the meetings and hoped that his event in Washington, DC would expand on and complement this message. During a September 20 meeting with Turkish Treasury U/S Ibrahim Canakci, he invited new State Minister for the Treasury Mehmet Simsek to speak at the event. A/S Sullivan also mentioned his interest in having Central Bank Governor Durmus Yilmaz and Investment Promotion Authority head Alpaslan Korkmaz speak if available. Apakan expressed the MFA's support for this event and added that in addition to the Turkish officials A/S Sullivan had mentioned, Finance Minister Kemal Unakitan would also be in Washington, DC for the Bank/Fund meetings. Renegotiating the BIT -------------- ¶6. (SBU) A/S Sullivan raised the U.S.'s desire to upgrade the existing U.S.-Turkey Bilateral Investment Treaty (BIT). He explained that upgrading the existing treaty in line with the U.S. model BIT would make Turkey more attractive to U.S. investors because of the protection it provides. He agreed to share a model of the new BIT with the MFA. ¶7. (U) This cable was cleared by A/S Sullivan. Visit Ankara's Classified Web Site at http://www.state.sgov.gov/p/eur/ankara/ WILSON