TURKEY MUST CONSULT WITH EU BEFORE RENEGOTIATING

C O N F I D E N T I A L ANKARA 000894 SIPDIS DEPT PLEASE PASS USTR FOR KIMBERLY CLAMAN & MARK MOWREY EEB/IFD/OIA FOR MICHAEL TRACTON EUR/SE FOR PAUL MALIK E.O. 12958: DECL: 05/08/2018 TAGS: EINV ECON TU SUBJECT: TURKEY MUST CONSULT WITH EU BEFORE RENEGOTIATING THE BIT REF: STATE 45743 Classified By: Economic Counselor Dale Eppler for reasons 1.4 (b) & (d) . ¶1. (U) This is an action request. Please see paragraph 4. ¶2. (C) We delivered reftel demarche to Turkish Treasury DDG for Foreign Investment, Murat Alici, who told us that, because Turkey is involved in the EU accession process, the GOT will have to consult with the European Commission (EC) before deciding whether to begin negotiations on a revised BIT with the U.S. As part of Turkey's EU harmonization process, the EC identified three of Turkey's BITs -- with the U.S., Japan and Bangladesh -- as priorities for updating to include a Regional Economic Integration (REI) clause. Alici asked if the U.S. has negotiated a BIT on the basis of the 2004 Model text with any current EU members or accession countries and, if so, what the EU's position is on the new Model BIT. ¶3. (C) Regarding the timing of a GOT response to our request, Alici said that the GOT's deliberation process will be lengthy because they must first consult with the EC and then with several Turkish agencies. Accordingly, he did not believe that the GOT would be able to discuss the BIT on the margins of the planned June 20 Trade and Investment Framework Agreement (TIFA) Council meeting. He said that Turkey will follow the recommendations of the EC in this matter and that from his discussions, he thought the EU would prefer amending the existing 1990 BIT text rather than starting with the 2004 text. ¶4. (C) Action Request: Given the prominence that the EU will apparently play in BIT discussions with Turkey, we request Department guidance on any prior EU reaction to the 2004 Model BIT text and information about any USG BIT negotiations that have occurred or are ongoing with current EU members or accession countries. We also request Department guidance on the inclusion of the EU's REI clause into the U.S.-Turkey BIT. ¶5. (U) Points of contact for this process are Economic Counselor Dale Eppler (epplerdb@state.gov, IVG 295-7075), until July 1, Economic Officer Rebecca Kimbrell (kimbrellrj@state.gov, IVG 295-7071),and after July 21, Economic Officer Jeff Borenstein, borensteinjd@state.gov. Visit Ankara's Classified Web Site at http://www.intelink.sgov.gov/wiki/Portal:Turk ey WILSON