US embassy cable - 04ISTANBUL891

UNCLAS SECTION 01 OF 02 ISTANBUL 000891 
 
SIPDIS 
 
 
SENSITIVE 
 
 
STATE FOR E, CBED, EB/TRA AND EUR/SE 
DEPARTMENT PASS USDOT, NSC FOR BRYZA 
USDOC FOR 4212/ITA/MAC/OEURA/CPD/DDEFALCO 
USDOE FOR CHARLES WASHINGTON 
TREASURY FOR OASIA - MILLS AND LEICHTER 
 
 
E.O. 12958: N/A 
TAGS: EWWT, EAIR, ELTN, ECON, PREL, TU, CY, Istanbul 
SUBJECT: TURKEY RAISES NORTHERN CYPRUS AVIATION LINKS IN 
ISTANBUL TRANSPORTATION BILATERAL; OTHER ISSUES INCLUDE THY 
PROCUREMENT AND BOSPHORUS SHIPPING 
 
 
1. (SBU) Summary: Secretary of Transportation Norman Mineta 
and his visiting delegation reviewed the bilateral 
transportation relationship with Turkish Minister of 
Transportation Binali Yildirim in a full day of meetings in 
Istanbul on Monday, May 24.  Yildirim took the opportunity to 
press for the establishment of direct aviation links as part 
of the U.S. review of its policy towards Northern Cyprus. 
Secretary Mineta responded that that review is ongoing, and 
 
SIPDIS 
that we are committed to ensuring that Turkish Cypriots are 
not "punished" as a result of the outcome of last month's 
referendum.  The two ministers also reviewed the gamut of 
other transportation issues, stressing the benefits that both 
sides have gained in the civil aviation area from our "open 
skies" agreement, and exploring possible areas of cooperation 
on maritime and land transport.  The Secretary made a strong 
pitch for Boeing aircraft in Turkish Airlines' (THY) current 
procurement decision; THY officials responded that price and 
technical issues are key, and that the process is "close to 
conclusion."  In the afternoon, the two Ministers toured the 
Bosphorus and received a briefing at the headquarters of the 
Vessel Traffic System (VTS) in Istinye.  End Summary. 
 
 
2. (SBU) Cyprus: The major bilateral issue on Yildirim's 
agenda was transportation linkage to Northern Cyprus.  He 
expressed appreciation for U.S. efforts to secure a 
settlement in the run-up to last month's referendum, and 
noted that while Turkey would have preferred a "yes-yes" 
outcome to the referendum, since that had not happened it is 
now focused on seeking removal of the "unfair restrictions" 
that the international community has imposed on the Turkish 
side of the island.  He noted that Turkey is grateful for 
U.S. steps to do this, and expressed hope that direct flights 
would be one of the measures adopted.  Yildirim noted that 
Northern Cyprus has worked to bring its ports and airports up 
to international standards, and provided documentation to 
that effect to the Secretary.  Secretary Mineta responded 
that our review of our Cyprus policy is underway, and that we 
are committed to ending the isolation of Turkish Cypriots and 
ensuring that they are not punished as a result of the 
referendum's outcome.  He stressed that we are coordinating 
our actions with the EU, and that better results will be 
obtained if actions are coordinated at the ICAO, and that he 
will speak to our Ambassador there as well.  Ambassador 
Edelman added that our goal is to end Northern Cyprus' 
economic isolation and help make the economic balance between 
north and south more equal.  To that end, he said, we will 
work both within the U.S. policy process and with 
multilateral institutions. 
 
 
3. (SBU) Aviation: Secretary Mineta stressed the two 
countries' common interests and noted that our bilateral 
"open skies" agreement had proved advantageous to both sides 
(a point with which U.S. companies concurred during a 
business breakfast with the Secretary before his bilateral 
meeting).  On security issues, he noted that lead 
responsibility in the U.S. government has passed to the 
Department of Homeland Security, but emphasized that the 
Department of Transportation remains deeply involved. 
 
 
4. (SBU) Maritime/Land Transport: In response to Secretary 
Mineta's outline of his efforts to encourage short-sea 
shipping in the United States to ease road congestion on the 
coasts, Minister Yildirim noted that the same issue exists in 
Turkey.  He attributed Turkey's high rate of road accidents 
to the "lack of balance" between various transport modes, 
with Turkish shippers primarily using road transportation. 
As a result, he noted, Turkey's road fleet is the largest in 
Europe.  The resulting congestion and infrastructure 
deterioration, Yildirim said, explains the high number of 
fatalities on Turkey's roads.  He outlined a similar effort 
to encourage freight to move by sea rather than by road. 
 
 
5. (SBU) THY Procurement: In closing, Secretary Mineta 
touched on the upcoming procurement decision by Turkish 
Airlines (THY), emphasizing our hope that the airline and 
government would give serious consideration to Boeing 
aircraft in their deliberations.  Yildirim responded by 
highlighting the dramatic growth that the civil aviation 
sector in Turkey has experienced over the past six months (a 
period in which air travel is up 30 percent).  He attributed 
the development to the entry of private companies into the 
market.  In the face of this private sector competition, he 
indicated, THY, which has also experienced growth, is 
determined to carry through with its fleet expansion plans. 
He then turned the floor over to THY General Manager 
Gundogdu, who emphasized that discussions with Airbus and 
Boeing are ongoing, and that the airline, together with 
Finance Minister Unakitan, will meet with Boeing next week in 
the U.S.  Price and technical issues are key, he said, and he 
suggested that the Secretary talk to Boeing on the price 
issue.  He added that the process is "close to a conclusion." 
 Regarding price, Ambassador Edelman noted that Turkey can 
help itself by adopting the Capetown Convention on aircraft 
financing, which enables U.S. export credit agencies to offer 
better rates.  The Minister responded that the Foreign 
Ministry is now working on the issue, and that the convention 
should be ratified soon. 
 
 
6. (SBU) Bosphorus Shipping: Both in the bilateral meeting 
and during an afternoon Bosphorus tour, Minister Yildirim and 
his maritime deputies emphasized the volume of traffic that 
is transiting the straits.  They noted that nearly 50,000 
ships made the passage last year, some 8,900 of them with 
dangerous cargo.  Vessel Traffic System (VTS) Director Tuncay 
Cehreli provided a detailed briefing on VTS operations during 
a stop at VTS headquarters in Istinye, emphasizing that the 
system is essentially a monitoring one.  While Yildirim 
stressed that the system is not intended to increase or 
decrease traffic, but to increase its safety, he did note 
that with the VTS in place traffic levels have increased in 
the first part of 2004.  Total passages, he said, are up 10 
percent and passages by ships with dangerous cargoes are up 
25 percent.  Turkish officials remain concerned that only 39 
percent of ships request pilots for the tricky and dangerous 
passage through the heart of Istanbul, though they did note 
that 99.5 percent of ships with dangerous cargoes take on a 
pilot, largely for insurance reasons. 
 
 
7. (U) Cable cleared by DOT A/S Bhatia for delegation. 
ARNETT