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08ISTANBUL438 2008-08-15 17:40:00 CONFIDENTIAL Consulate Istanbul
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DE RUEHIT #0438/01 2281740
O 151740Z AUG 08
					  C O N F I D E N T I A L SECTION 01 OF 03 ISTANBUL 000438 



E.O. 12958: DECL: 08/15/2023


Classified By: Acting Principal Officer Sandra Oudkirk; Reason 1.5 (d)

1. (C) Summary: Iranian President Ahmadinejad led an
Iranian delegation to Istanbul August 14-15 for a bilateral
"working visit." Five agreements -- on security cooperation,
the environment, transportation, tourism, and archives --
were signed, but observers said these were not likely to
contain significant new substance. No agreement on
hydrocarbon cooperation was inked, but both sides pledged to
pursue further talks based on the July 2007 energy MOU. A
meeting of Turkish and Iranian commercial representatives was
reportedly canceled at the last minute by Iran, to the
Turkish side's consternation. Press coverage of the visit
centered on the August 14 joint presidential press conference
-- which one journalist attending characterized as largely
content-free excepting remarks from President Gul on the
nuclear issue -- and the traffic paralysis caused by
Ahmadinejad's motorcade. We heard several anecdotes
underscoring the Iranian delegation's disorganized approach
to the visit.

2. (C) Asked what this visit means for Turkey-Iran
relations, our contacts agreed that the GOT allowed the visit
to occur (while severely limiting the visit's substance) not
out of any warmth for the Iranian regime but to carefully
balance its common interests with Tehran -- e.g. regional
stability and fighting local terrorism -- with the concerns
it shares with the U.S. and EU about the Iranian regime. We
believe this visit illustrated the GOT's belief that it can
help moderate Iranian behavior not only by supporting UNSC
sanctions and pressing for nuclear compliance, but also by
pursuing careful diplomatic, economic, commercial, and
cultural engagement as well. The GOT took a risk in allowing
the visit, and is likely to be relieved that it is now over.
End summary and comment.

Short on substance, "scrounging for agreements to sign"



3. (SBU) Iranian President Mahmoud Ahmadinejad led an
Iranian delegation to Istanbul August 14-15 for a bilateral
"working visit" with the GOT, the first visit by an Iranian
president to Turkey since 1996. Ahmadinejad was accompanied
by Iranian FM Mottaki, Energy Minister Parviz Fattah , and
Petroleum Minister Gholam-hossein Nozari. They met with
President Gul, Prime Minister Erdogan, Foreign Minister
Babacan, and State Minister (Treasury) Simsek. All official
meetings took place at Istanbul's Ciragan Palace.

4. (C) No formal energy agreement was signed, despite press
speculation that the two sides might use the occasion to
complete a formal agreement on hydrocarbon cooperation that
would have finalized a July 2007 MOU, in which Turkey had
pledged to invest some 3.5 billion USD in Iran's natural gas
industry and import over 20 billion cubic meters (bcm) of
natural gas from the South Pars field. Press reports and
local observers suggested that the lack of a signed deal on
hydrocarbon cooperation was the result of combination of
factors including new demands from Iran on gas pricing, and a
desire by the GOT not to run afoul of USG concerns that
inking such a deal would both weaken the Iranian regime's
international isolation and force the USG to review whether
such a deal could trigger provisions of the USG's Iran
Sanctions Act. That said, Turkish and Iranian officials
publicly underscored their intention to "continue and deepen"
bilateral energy cooperation.

5. (C) Five bilateral agreements were signed, pledging
Turkey and Iran to enhanced bilateral cooperation on:
combating smuggling, organized crime, and terrorism;
environmental protection; improving transportation links;
promoting tourism; and providing for cooperation and
exchanges between Turkey's and Iran's National Libraries.
(Comment: The texts of the agreements have not yet been made
public.) A western correspondent based in Istanbul, who
until recently was based in Tehran, commented that "clearly
both sides had to scrounge around for these agreements" and
predicted the agreements would most likely include "very
little that has not already been agreed or even implemented"
between the two countries.

6. (C) The Turkey-Iran Business Council, which operates
under the auspices of Turkey's Foreign Economic Relations
Board (DEIK), was scheduled to meet August 15 on the margins
of the official meetings at the Ciragan Palace Hotel, to
finalize an agenda for the August 25-27 "8th Joint Economic
Commission Meeting," to be held in Tehran (ref B). According
a contact who works for DEIK, however, the Iranian commercial

ISTANBUL 00000438 002 OF 003

delegation canceled at the last minute. "The two Presidents
and Foreign Ministers, as well as Business Council chairmen,
were supposed to give remarks, but the event simply did not
happen. Foreign Minister Babacan was quite upset."
According to our contact, DEIK Board of Directors Chairman
Rifat Hisarciklioglu was prepared in his remarks to call on
Iran to import more Turkish goods (comment: over 80% of the
total bilateral trade is Turkish import of Iranian natural
gas), criticize the GOI for imposing "unfair" tariffs on
Turkish goods (e.g., a 46% tariff on hazelnuts, as well as
significant tariffs on Turkish clothing and furniture), urge
Iran to modernize the "IT infrastructure" of its banking
industry to allow for better Turkish-Iran banking
cooperation; and stop imposing a fuel tax on Turkish truckers
entering Iran. According to Hisarciklioglu's (undelivered)
remarks, Turkey plans to raise these concerns at the Economic
Cooperation Organization (ECO) Summit in Pakistan in
November. Our DEIK contact summarized the Turkish side's
frustrations with the Iranian commercial team's no-show this
way: "Iran seems to care more about the appearance of warm
commercial relations with Turkey, than actually taking real
steps to deepen those relations."

Paralyzed Traffic, Press Conference Tedium, Ciragan Palace



7. (SBU) Local Turkish media coverage of the visit focused
on the August 14 joint Presidential press conference, and on
the widespread traffic paralysis confronting Istanbul drivers
resulting from highway closures to facilitate Ahmadinejad's
motorcade. Several Turks commented to us that Ahmadinejad
appeared "calmer and more intelligent" at the press
conference than they had expected, and were pleased that he
was able to offer basic courtesies in Turkish.

8. (C) These same local observers, as well at least one
reporter covering the August 14 press conference, however,
found Ahmadinejad's remarks to be disappointingly
"content-free." This was a consequence, the reporter
asserted, of a poorly-managed press conference in which
Ahmadinejad was allowed "to ramble on at length about the
virtues of Iran's contributions to mankind" and thus limit
the number of questions posed to him, in what was already an
event truncated by its two-hour late start time. One
exception was the nuclear issue. On that, President Gul
struck a carefully balanced note, noting that Turkey favors a
diplomatic solution in which Iran addresses the concerns of
the international community, but also emphasizing Turkey's
support for Iran's right to peaceful nuclear power.
Ahmadinejad responded that on Iran "appreciates any proposals
from our friends," adding that Iran would continue to support
"the talks in Geneva."

9. (C) Ahmadinejad's schedule remained fluid even after
arrival in Istanbul, with several events canceled or
rescheduled. "His aides seemed at wit's end", a
correspondent following the delegation all day on August 14
confided to us, sensing that the delegation was "flying by
the seat of its pants." One visiting USG official staying at
the same hotel (remarkably, on the same floor) as Ahmadinejad
described a chaotic atmosphere in the hotel lobby, noting
that she was approached in the lobby by an Iranian official
(comment: we think it was Iran's new Ambassador to Turkey,
judging by the description), mistaking the USG official for a
western reporter and asking her if she had any questions to
ask him. Similarly, a correspondent who spent August 14 at
the Ciragan Palace Hotel described members of the Iranian
delegation as "constantly appearing to get lost inside the
palace complex, running around waving papers and yelling at
each other." She said the Turkish side's tension and dismay
at the Iranian delegation's "unnerving" behavior was

What does it mean for Turkey-Iran relations?


10. (C) According to Can Buharali, a former Turkish diplomat
who served in Iran and now works with the Istanbul-based
"Center for Economics and Policy Studies" (EDAM), the GOT
allowed this visit to proceed out of a sense of "neighborly
obligation" and to advance commercial and cultural links with
Iran, rather than as a signal of warmth towards the Iranian
government. "Of course Turkey does not want to see a nuclear
Iran. Turkey's leaders have the same concerns you do about
Ahmadinejad and the regime, but they also have confidence in
their ability to influence Iran more effectively through
commerce and engagement than through sanctions or isolation."
Buharali reviewed how Turkey's relations with Iran have
"deepened and expanded" in the past five years in such areas

ISTANBUL 00000438 003 OF 003

as commerce, culture, tourism, and energy cooperation.
Additionally, the GOT and GOI "closely share common concerns
regarding terrorism, narcotic traffic from Afghanistan, and
stability in Iraq." Unfortunately, he noted, this growing
Turkish influence with Iran has not been sufficient to
persuade Iran's leadership to change course on its nuclear
program, "leaving Mr. Erdogan and Mr. Gul with a very
difficult decision in coming months whether they can join the
U.S. and the EU in levying tougher economic sanctions on
Iran. It is a decision they would rather not face."

11. (C) A Tehran-based political analyst told Istanbul's
Iran Watcher that Iran, for its part, "has no illusions"
about why Turkey allowed this "working level Summit" to
happen. "Ahmadinejad and Gul publicly proclaim their mutual
admiration, and present a happy picture talking to each other
warmly (in Arabic)", but "Iran knows Turkey needs its natural
gas, especially as Russia finds itself more isolated because
of Georgia. Iran thinks Turkey needs Iran more than Iran
needs Turkey." He predicted that if the U.S., EU, and others
pursue further measures to isolate the regime, Iran will
correspondingly increase its own commercial- and
energy-oriented diplomacy with Turkey. Similarly, an
Istanbul-based western news correspondent was told August 13
by a press aide to Ahmadinejad that "Turkey knows that Iran
and Turkey are natural partners, and that if Turkey wants to
accomplish anything regionally it needs Iran's help." The
press aide added, in reference to Ahmadinejad's visit to
Istanbul, that "if it upsets America and Israel, that's just
icing on the cake." The correspondent himself predicted that
the visit would bolster Ahmadinejad's domestic political
standing as Iranian politicians maneuver for next year's
presidential elections.

12. (C) The Director of Bahcesehir University's Strategic
Research Center, Dr. Ercan Citlioglu, a strong secularist
with long-standing ties to the Turkish military, criticized
the GOT for "underestimating the diplomatic manipulations" of
the Iranian regime. He urged that the USG not misinterpret
Ahmadinejad's visit as signaling "anything close to a
high-water mark" in bilateral relations, and felt the GOT had
given in unnecessarily to Iranian pressure to allow the
visit. "Turkey and Iran remain wary neighbors." The GOT,
however, "thinks it can replicate its success" with the
Syria-Israeli track by positioning itself as "an intermediary
or honest broker" between Washington and Tehran. "The problem
is, instead Erdogan and Gul are playing into Iran's hands as
the Iranians try to bide their time on the nuclear front and
weaken international consensus on further sanctions." He
concluded that even though the bilateral agreements signed
during this very were insubstantial, "now the Turkish
government will be much more constrained against supporting
further sanctions on Iran."



13. (C) Most observers agree that the GOT took a risk in
finally acquiescing to Ahmadinejad's visit, given Iran's
recent refusal to reply constructively to the P5 1's revised
offer in June, and what the press portrayed as pressure from
the U.S. and others against any significant deliverables.
Ultimately, most observers felt this visit reflected the
GOT's desire, realistic or not, to balance the concerns it
shares about Iran with most in the international community,
and the common interests it shares with its largest and most
unpredictable neighbor. The overriding feeling among Turkish
opinion-makers upon the conclusion of the Ahmadinejad visit
is likely to be relief: Relief that he didn't generate any
new controversies or spout off any new, ill-advised public
remarks, and relief that the GOT managed to "stay on the
balance beam" by pulling off the visit without (yet) signing
new agreements with Iran that would have angered Washington
or undercut the current sanctions regime on Iran. We tend to
agree with the EDAM analyst's paragraph 10 remark that what
this visit really illustrated was the GOT's belief that it
can help moderate Iranian behavior not only by supporting
UNSC sanctions and pressing for nuclear compliance, but also
by pursuing careful diplomatic, economic, commercial, and
cultural engagement as well. As this expert told us, "that's
just the Turkish way."