US embassy cable - 04ANKARA6388

UNCLAS SECTION 01 OF 05 ANKARA 006388 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: EFIN, ETRD, ENRG, ECON, IZ, TU 
SUBJECT:  Turkish Iraqi Economic Cooperation Talks 
 
REF:  ANKARA 6170 
 
SENSITIVE BUT UNCLASSIFIED. 
 
1.  (SBU)  Following is the text of "agreed minutes" 
signed on November 5 at the conclusion of Turkish-Iraqi 
Joint Economic Committee meetings in Ankara (REFTEL). 
The document, which was given to us by the Turkish MFA, 
is encouraging in that it demonstrates that Turks and 
Iraqis are working together to address impediments in 
current trade and investment relations -- including 
security issues -- and to put in place a new legal and 
regulatory framework for the expansion of future trade 
and investment relations. 
 
Highlights of areas of agreement include: 
 
1) Executing outstanding OFF and bilateral protocol 
contracts. 
 
2) Concluding a framework agreement between Turk 
Eximbank, the Trade Bank of Iraq. 
 
3) Continuation of negotiations of a second border gate 
to be located at Ovakoy region. 
 
4) Cooperation on road security, especially between Mosul 
and Baghdad. 
 
5) Establishing Turkish and Iraqi railroads joint 
committee to address improving infrastructure. 
 
6) Enhanced energy and electricity cooperation, including 
upgrading the Kirkuk-Ceyhan (Yumurtalik) pipeline and 
facilitating work by Turkish oil and gas firms in Iraq. 
 
2.  (SBU)  MFA contacts told us that the two sides 
discussed Iraq's desire for forgiveness of debts owed to 
Turkey.  They were, however, unable to agree on wording 
to be included in the agreed minute.  (Septel will report 
Turkish views on this issue.) 
 
3.  (SBU)  Begin text. 
 
Begin Text 
 
AGREED MINUTES OF THE 15TH SESSION OF TURKISH-IRAQI JOINT 
COMMITTEE FOR ECONOMIC AND TECHNICAL COOPERATION 
 
The Turkish - Iraqi Joint Committee, set up in accordance 
with Article 9 of the Agreement on Economic and Technical 
Cooperation between the Government of the Republic of 
Turkey and the Government of the Republic of Iraq held 
its 15th Session in Ankara, on November 2-5, 2004. 
 
The Turkish delegation was headed by H.E. Kursad Tuzmen, 
Minister of State of the Republic of Turkey, and the 
Iraqi delegation was headed by H.E. Thamir Ghadhban, 
Minister of Oil of the Republic of Iraq. 
 
The lists of the members of the two delegations were 
shown in Annexes I and II respectively. 
 
During his stay in Ankara, H.E. Thamir Ghadhban, Minister 
of Oil of the Republic of Iraq met with H.E. Hilmi Guler, 
Minister of Energy and Natural Resources, and H.E. Binali 
Yildirim, Minister of Transportation. 
 
The deliberations of the Joint Committee took place in an 
atmosphere of mutual understanding and cooperation, 
reflecting the traditionally close, brotherly and cordial 
relations between the two countries. 
 
After having detailed discussions and exchanging views on 
further expanding the existing commercial and economic 
relations between the two countries, both sides agreed as 
follows; 
 
I- TRADE AND ECONOMIC COOPERATION 
 
1. Both sides stressed the importance of further 
enhancing commercial relations between the two countries 
on the basis of the needs of their economies and agreed 
to exert every possible effort to increase the volume of 
trade and diversify its composition. 
 
2. Both sides agreed to rearrange the framework of 
bilateral trade and economic relations. 
To this end, both sides agreed to conclude the 
negotiations of Trade Agreement, Agreement on Avoidance 
of Double Taxation and Agreement on Reciprocal Promotion 
and Protection of Investments as soon as possible. 
 
Within this context, the Turkish side handed over the 
Iraqi side the draft texts of the Agreement on Reciprocal 
Promotion and Protection of Investments and the Trade 
Agreement. 
 
Both sides decided to hold the first round negotiations 
of the Trade Agreement in February 2005, in Ankara. The 
negotiations regarding the Agreement on A voidance of 
Double Taxation and the Agreement on Reciprocal Promotion 
and Protection of Investments will commence at the 
earliest convenience. 
 
3. The Turkish side expressed its support in accession 
process of Iraq into the WTO and agreed to provide 
training programs for Iraqi experts in Turkey. 
4. The Turkish side submitted a list of the Turkish 
companies having difficulties in executing the 
prioritized UN Oil for Food Program (OFF) contracts and 
in receiving their outstanding payments within this 
system. 
 
The Turkish side also conveyed a list of the contracts 
signed by Turkish companies before June 2004, and 
requested the Iraqi side to issue the L/Cs for these 
contracts. 
 
The Iraqi side undertook to examine all these cases with 
a positive approach and to convey its response until the 
end of December 2004. 
 
5. Both sides, underlining the importance of the trade 
fairs and exhibitions in the development of the bilateral 
trade and economic relations, decided to encourage their 
public and private sector companies in organizing trade 
fairs and exhibitions in Turkey and Iraq, as well as 
participation of their companies to the international 
fairs to be held in both countries. 
 
6. Both sides agreed to organize reciprocal trade 
missions and delegations with the aim to effective 
utilization of existing free zones established in both 
countries. 
 
7. Both sides noted with satisfaction the successful 
implementation of the Border Trade Arrangement (BTA) 
contracts that were reactivated after December 2, 2003. 
Both sides agreed to exert every possible effort for 
smooth implementation of the remaining contracts. 
 
In this context, the Iraqi side agreed to advise their 
relevant organizations to speed up the processing of the 
remaining registered and funded BTA contracts, in 
accordance with the Article 5/d and 5/e of the Statement 
dated March 11, 2004. 
 
The Turkish side, indicating the submissions of the 
statement of the deposits and withdrawals from BTA 
accounts and the payments made to Turkish companies for 
the goods delivered to Iraq as referred to in the said 
Statement, requested the Iraqi side to confirm these 
payments at its earliest convenience. 
 
To this end, the Turkish side undertook to convey all the 
documents regarding these payments to SOMA, in the first 
half of November 2004. 
 
The Iraqi side agreed to examine these documents and 
reply within 3 months. 
 
The Turkish side, submitting a list of the unpaid 
invoices of the Turkish companies, asked the Iraqi side 
for an urgent issuance of the payment instructions. 
 
Cooperation Between Private Sectors 
 
8. Both sides, emphasizing the important role of the 
private sector enterprises in economic development of 
their countries, agreed to promote cooperation between 
the Union of Chambers of Commerce and Industry of Turkey 
(TOBB), the Foreign Economic Relations Board of Turkey 
(DEIK), the Iraqi Federation of Industries and the Iraqi 
Chambers of Commerce with the aim of establishing joint 
ventures for rehabilitation and modernization of Iraqi 
industries. 
 
The Turkish side, referring to the draft agreement 
submitted by the Iraqi Federation of Industries to Union 
of Chambers of Commerce and Industry of Turkey (TOBB) / 
Foreign Economic Relations Board of Turkey (DEIK), agreed 
to study and reply this agreement until end of the 
December 2004. 
 
Both sides agreed to organize a businessmen delegation to 
Iraq in the first half of 2005 within the framework of 
the Memorandum of Understanding (MOU) on the Creation of 
the Bilateral Business Council between Turkey and Iraq, 
signed by Foreign Economic Relations Board of Turkey 
(DEiK) and Iraqi Businessmen Association (IBA) on May 6, 
2004, in Istanbul. 
 
II- BANKING 
9. The Turkish side, referring to the applications made 
by Turkish banks, namely T.C. Ziraat Bankasi and Turkiye 
Vakiflar Bankasi, requested the Central Bank of Iraq to 
accelerate the procedure for opening branch offices in 
Iraq. The Iraqi side undertook to respond this subject 
within one month. 
 
10. Both sides discussed the possibilities of concluding 
a Framework Agreement between Turk Eximbank, the Trade 
Bank of Iraq (TBI) and the Iraqi Ministry of Finance in 
order to provide exports credit insurance by Turk 
Eximbank for the L/Cs issued by the TBI with 180 days 
maturity. 
 
III- TRANSPORTATION AND CUSTOMS 
 
11. Both sides stressed the importance of the 
transportation sector in further development of bilateral 
trade and economic relations. 
 
Road Transportation 
 
12. The two sides agreed on continuation of the ongoing 
process of negotiations related to the opening of the 
Turkish-Iraqi second border gate to be located at Ovakoy 
region. 
 
13. Both sides stressed the importance of ensuring the 
security of the Turkish trucks carrying goods to Iraq 
especially in the road section connecting Mosul to 
Baghdad. The Iraqi side, informing the Turkish side about 
the measures that have already been taken by the Iraqi 
authorities to ensure the security in this segment, 
expressed its determination to enhance it further. 
 
14. The Turkish side requested the Iraqi side to provide 
the names and addresses of the registered Iraqi road 
transport companies. 
 
The Iraqi side agreed to convey this list at its earliest 
convenience. 
 
Railway transportation 
 
15. Both sides agreed to take appropriate measures with 
the aim to effective utilization of the Nusaybin-Qamishly- 
Mosul railway for goods and passenger transportation. 
 
To this end, both sides agreed to establish a technical 
committee between TCDD and IRR with following tasks; 
 
Improvement of the infrastructure of Nusaybin-Qamish1y- 
Mosul railway to increase its capacity to 6 trains per 
day, 
 
Organization of cargo trains between Gaziantep and 
Baghdad, 
 
Organization of the regular passenger trains between 
Istanbul and Baghdad, 
 
Supplying the equipment and material required by the IRR 
for the rehabilitation of Iraqi railway network. 
 
Air transportation 
16. Both sides agreed to encourage their national flag 
carriers and private airline companies to initiate 
regular flight services between their countries. 
 
IV- INDUSTRY 
 
17. The Iraqi side, indicating the possibilities of 
cooperation between Turkish companies and Iraqi state 
companies for the development of the Iraqi industries, 
especially in the petrochemicals, metallurgy, 
engineering, chemicals, building, food and textiles 
industries, submitted a list of the projects including 
detailed information for consideration. 
 
The Turkish side agreed to distribute this information to 
the relevant private sector companies in Turkey with the 
aim of encouraging their involvement in the 
rehabilitation and modernization of the industrial 
facilities. 
 
The Turkish side also agreed to provide short-term 
training programs for Iraqi engineers and technicians in 
Turkey and to organize seminars, meetings and workshops 
to this end. 
 
18. The Iraqi side invited the Turkish companies and 
Turkish investors to participate in the tenders issued by 
the Ministry of Industry and Minerals for supplying raw 
materials and spare parts. 
 
19. The Iraqi side submitted to the Turkish side a list 
of the industrial facilities to be rented, rehabilitated 
and operated by foreign investors and asked active 
participation of the Turkish companies to these tenders 
as well as to the tenders to be issued in the future. 
 
The Turkish side expressed its readiness to distribute 
this information to the relevant Turkish companies and 
investors and agreed to encourage them to participate in 
these tenders on competitive basis. 
 
V- ENERGY 
 
20. Both sides agreed to develop further cooperation 
between the two countries in the field of energy. 
 
21. The Turkish side expressed the desire of the Turkish 
companies to actively participate in the development of 
petroleum and natural gas fields in Iraq and to supply 
material and equipment for the petroleum sector in Iraq. 
 
22. Both sides expressed their interest in the 
involvement of the Turkish Petroleum Corporation (TP AO) 
in the Gharraf Oil Field Development Project. 
 
23. The two sides underlined the importance of Kirkuk- 
Yumurtalik Crude Oil Pipeline (ITP) for exporting of the 
Iraqi crude oil. In this framework, the Iraqi side is 
determined to take all necessary measures for the proper 
functioning and protection of this Pipeline inside the 
Iraqi territory. 
 
The Turkish side expressed the readiness of BOT AS to 
provide the necessary technical support for the operation 
of the ITP. 
 
24. The Iraqi side, upon the request of TOPRAS, 
underlined its readiness to consider increasing the 
supply of crude oil from Ceyhan Terminal in coming years. 
 
25. The Iraqi side noted the interest of the TPIC in 
supplying oil products on the basis of a long-term 
contract to be signed with SOMO in accordance with the 
Iraqi further needs. 
 
26. Both sides agreed to cooperate in the field of the 
oil field services. 
 
27. The Iraqi side conveyed the list of the contracts 
signed by Turkish companies and Iraqi state companies 
related to Ministry of Oil within the framework of UN Oil 
for Food Program and requested the assistance of the 
Turkish side for the urgent execution of these contracts, 
which had been partially implemented. 
 
28. The Iraqi side submitted a list of the requirements 
of the Iraqi Ministry of Electricity. The Turkish side 
asked detailed information regarding these requirements 
and undertook to convey all these information to the 
relevant companies and organizations in Turkey. The 
Turkish side agreed to organize a specialized trade 
mission in this sector to Iraq, in the first quarter of 
2005. 
 
VI- CONTRACTING SERVICES 
 
29. Both sides agreed to establish a sub-committee 
comprising the representatives of the relevant 
organizations, private and government-owned companies of 
both countries in order to further investigate the 
cooperation opportunities in fields of the contracting 
and consultancy services. 
 
30. The Turkish side indicated its interest in supporting 
project development process in Iraq by means of Turkish 
consulting engineering companies, and undertook to a 
program which summarizes the terms of conditions of 
support mentioned a Iraqi side not later than December 
2004. 
 
31. Both sides agreed to hold the first meeting of this 
committee in the first quarter of  2005. 
 
VII - TECHNICAL COOPERATION 
 
32. Both sides agreed to enhance the technical and 
scientific cooperation as vocational training between 
their countries in the fields of health, agriculture, 
irrigation, petroleum industry, information technologies, 
industry, scientific researches and R&D activities. 
 
Both sides agreed to hold the 16th Session of the Turkish- 
Iraqi Joint Committee for Economic and Technical 
Cooperation in Baghdad, in 2005, on a date to be 
determined through the diplomatic channels. 
 
Done and signed in Ankara on November 5, 2004, in two 
originals in the English language. 
 
FOR THE GOVERNMENT OF THE REPUBLIC OF TURKEY 
Kursad TUZMEN 
Minister of State 
 
FOR THE GOVERNMENT OF REPUBLIC OF IRAQ 
Thamir GHADHBAN 
Minister of Oil 
 
End Text. 
 
4.  (u) Baghdad minimize considered. 
Edelman