TURKEY ALSO CONCERNED ABOUT PROTECTIONIST SPIRAL,

UNCLAS ANKARA 002087 SENSITIVE SIPDIS EEB/TPA/MTAA FOR BRIAN NATZIGER DEPT PLEASE PASS USTR FOR CARA MORROW E.O. 12958: N/A TAGS: EFIN ETRD PREL ECON WTRO SUBJECT: TURKEY ALSO CONCERNED ABOUT PROTECTIONIST SPIRAL, BUT MAY TAKE MEASURES OF ITS OWN REF: STATE 125609 ¶1. (SBU) We delivered reftel talking points to Ibrahim Yagli, MFA Department Head in the Office of Multilateral Economic Affairs. He observed that the GOT had not been aware of the protectionist measures taken by India, Brazil, and Argentina. Yagli agreed that such activities could create a dangerous spiral and emphasized that Turkey has not undertaken any new protectionist measures since the G20 summit. ¶2. (SBU) Yagli admitted, however, that the GOT's economic program has not been fully defined and that some measures that might appear protectionist could be included. He promised to transmit our concerns to the group at Treasury that is defining that program. Yagli also asked whether the USG had any information concerning possible protectionist measures in China, noting that as an engine of the world economy it is important that the Chinese market remain open and free. ¶3. (SBU) Comment: While Yagli's statement that no new protectionist measures have been implemented is accurate, there is evidence that the GOT is trying to reinvigorate existing protectionist rules. A recent circular from the Prime Minister's office urged the public sector to procure goods locally when possible and reminded them that Turkish companies can receive a 15 percent cost-adjustment in competitive procurement bids. This is not a new regulation, but the PM's decision to issue a circular just to remind agencies that they can give preference to Turkish goods is unusual. U.S. pharmaceutical companies have expressed concern that this may disadvantage them in health sector tenders. End comment. Visit Ankara's Classified Web Site at http://www.intelink.sgov.gov/wiki/Portal:Turk ey JEFFREY