US embassy cable - 03ANKARA6334

C O N F I D E N T I A L ANKARA 006334 
 
SIPDIS 
 
 
STATE FOR E, P, EB, NEA/NGA AND EUR/SE 
TREASURY FOR OASIA - MILLS AND LEICHTER 
STATE PASS USTR FOR LERRION 
NSC FOR BRYZA/MCKIBBEN 
 
 
E.O. 12958: DECL: 10/08/2013 
TAGS: ETRD, ETTC, PREL, TU, IZ, IR 
SUBJECT: FOREIGN TRADE U/S ON IRAQ/IRAN 
 
 
REF: ANKARA 5658 
 
 
(U) Classified by DCM Robert Deutsch.  Reason: 1.5(b,d) 
 
 
1. (C) Foreign Trade U/S Tuncer Kayalar told us October 6 
that, during his recent visit to Teheran, State Minister 
Kursad Tuzmen had warned Iranian President Khatami not to 
"play games" on nuclear issues and to avoid supporting 
terrorists.  Khatami responded, per Kayalar, that Iran would 
meet its commitments to the IAEA.  Kayalar suggested that 
Turkey -- particularly Minister Tuzmen -- could play a 
helpful role in U.S. and international efforts to push 
Teheran to behave better on nuclear and other issues. 
 
 
2.  (C) Kayalar said press reports indicating that Turkish 
companies accompanying Tuzmen had signed $200 million worth 
of export contracts probably understated matters.  Of the 350 
companies at the Teheran industrial fair, Turkish companies 
made up nearly one-third.  Also, Tuzmen and his Iranian 
counterparts had agreed to establish border trading posts, 
which Kayalar described as similar to "duty-free" shops 
located right at the border crossing.  Kayalar acknowledged 
that these posts would generate only a small amount of trade, 
but thought it would boost the local economy.  He said Turkey 
hoped to double bilateral trade with Iran, which now stands 
at some $2.2 billion annually. 
 
 
3.  (C) The U/S said Turkish exports to Iraq were booming, 
and could reach $1 billion by year-end.  This was having a 
very positive impact on the economy in Turkey's poor 
southeast, and the GOT is anxious to keep it going.  Kayalar 
said the government had done everything possible to enhance 
efficiency at the Turkish side of Habur Gate, but believes a 
second gate -- along with a direct rail line -- is essential. 
 (Comment:  In a demonstration of the lack of interagency 
communication in Ankara, Kayalar said he was unaware that 
Habur Gate would undergo renovation and that the MFA had 
asked CPA to agree to a temporary "second" gate while the 
renovation was underway.  End Comment)  Echoing Kayalar's 
comments, Southeastern Exporters' Union Chairman Abdulkadir 
Cikmaz told the press that exports to Iraq were revitalizing 
the southeast's economy, and that several production plants 
in Gaziantep had recently re-opened to service Iraqi import 
demands. 
 
 
4.  (SBU) We reminded Kayalar of our recent demarche (reftel) 
on U.S. ExIm's framework agrement with the Trade Bank of 
Iraq, and suggested that a similar, if smaller-scale, 
agreement by Turkey's Export-Import Bank would benefit both 
Turkish exporters and the Iraqi economy.  Kayalar, who is 
Chairman of the Turkish Export-Import Bank board, said the 
GOT is studying the issue, but his response did not suggest 
any urgency. 
 
 
 
 
EDELMAN