TURKISH BUSINESS LEADERS DISCUSS POTUS VISIT AND

C O N F I D E N T I A L SECTION 01 OF 02 ISTANBUL 000141 SIPDIS E.O. 12958: DECL: 04/16/2019 TAGS: ECON EFIN SUBJECT: TURKISH BUSINESS LEADERS DISCUSS POTUS VISIT AND TRADE Classified By: Consul General Sharon A. Wiener for reasons 1.4 (b) and (d) ¶1. (C) Summary: During an April 15 luncheon discussion with the Ambassador and Consul General, organized in part to receive input in response to discussions during the President,s visit on increasing two-way trade and investment, prominent Turkish business executives viewed President Obama,s visit to Turkey as a great success, with long term significance that goes well beyond mere symbolism. The Turkish guests urged continued U.S. support for Turkey,s bid for EU accession and supported an enhanced bilateral trade and investment relationship between Turkey and the United States, with a greater role for the U.S. Export-Import Bank (EXIM). End Summary. THE POTUS VISIT TO TURKEY ¶2. (C) At an April 15 lunch with a small group of Turkey,s leading industrialists, Nihat Gokyigit, a well-known business leader who is actively involved in cultural and social affairs, offered that President Obama,s recent visit to Turkey was timely and had a thoroughly positive impact on U.S.-Turkish relations, adding that the visit will help move the Armenia issue forward. Gokyigit described the President,s comments to the EU on Turkey as "great". Mustafa Koc was glad that the President stressed the secular nature of Turkey to the EU. Stressing religion, opined Koc, would have led to undesirable and "exploitable" results. Husnu Ozyegin, the chairman of Fiba Holding, was relieved that the President, unlike his predecessor, did not use the term "moderate Islamic republic." He stated that one advantage of Michelle Obama not coming to Turkey is that it avoided a first ladies photo op where head scarves would have been prominent; Ozyegin believes this would have given the world an inaccurate picture of Turkey, one in which "all women wear headscarves." Guler Sabanci stated that the presidential visit brought a new era to Turkish-U.S. relations. "I notice (Chief of Staff) Basbug is quoting Obama!", she observed. TURKEY AND THE EU ¶3. (C) Mustafa Koc noted that it had been a mistake for Turkey to join in a customs union with the EU without first getting traction on accession: the EU got what it wanted, while Turkey now plays a weaker hand. He also perceived a double standard in that Turkey, far more advanced (in his view) than Bulgaria and Romania, must jump through many more hoops to gain EU accession. However, Guler Sabanci counseled patience, noting significant U.S. support for Turkey. "Things have improved over the last 20 years, and European attitudes could change." Enka Holding,s Sarik Tara was a bit more caustic: "We need to make Europe secular: we are way ahead! The EU criticizes us on human rights, but Turkey has 1/20th the crimes per capita of Germany". NEW MODELS AND GREATER BILATERALISM ¶4. (C) A prominent theme throughout the discussion was that the global financial crisis has created new opportunities for Turkey, if Turkey is bold and creative enough to seize them. Guler Sabanci stated that, like the Japanese, the Turks see the crisis, metaphorically, as an earthquake. She thinks that almost all sectors of the economy will "shrink, re-structure and re-direct," and foresees "a new era for manufacturing." Husnu Ozyegin emphasized the crucial importance of greater trade with the United States, stating that U.S. EXIM should increase lending in Turkey to promote U.S. exports. Turkey needs supplier credit similar to what it received in the late 1970,s and early 1980,s. Private lenders provided this in the past, but Ozyegin pointed out this is no longer true: now EXIM is needed for long term loans, perhaps totaling 15 billion dollars. He also believes that Turkey needs either a free trade agreement or a QIZ (qualifying industrial zone) with the United States to increase bilateral trade. (Comment: In 1996, the U.S. Congress authorized the President to allow Egypt and Jordan to create a number of such zones, from which they could ship goods to the United States duty free. The caveat was that these goods had to contain a specified input from Israel. How Turkey would qualify for a QIZ, or even if this would be feasible given its customs union membership in the EU, is unclear at this point. End comment). ¶5. (C) Comment: The discussion provided a sounding board for some of Turkey,s most influential business executives. The participants agreed that Turkey and the world were in the process of significant transition, a transition that provides opportunities and cause for optimism. As Sabanci commented, "The mood in Turkey is good and I believe that we have a real chance of solving some old problems. There is a desire to ISTANBUL 00000141 002 OF 002 change. The new generation doesn,t want conflict with Armenia or Greece." All were heartened by President Obama,s visit and by the new vision that they feel he brings. A subtext of the discussion was that stronger bilateral trade and investment between Turkey and the United States, buttressed by greater EXIM lending, would underpin the broader strategic relationship, and enhance effective political and diplomatic cooperation in the region. End Comment. Wiener