US embassy cable - 05ADANA2

UNCLAS ADANA 000002 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: ETRD, ECON, PREL, SY, JO, IZ, TU, ADANA 
SUBJECT: NEW TURKISH-SYRIAN TRADE DEAL SIGN OF BETTER THINGS TO 
COME? 
 
REF: ADANA 160 
 
1.(SBU)   Summary:  Per local trade contacts,  one of whom 
accompanied PM Erdogan on his recent trip to Syria, SE Turkey's 
border trade with Syria is not expected to change  significantly 
in the near-to-medium term, despite more optimistic public 
statements made to announce a new Turkish-Syrian free trade 
agreement.  Local business people reiterated that Turkish 
exports to Syria have yet to match the promise raised with the 
past year's celebrated exchanges of trade delegations. End 
Summary. 
 
Turkey-Syria overall trade patterns unlikely to change 
--------------------------------------------- -------------------- 
 
2.(SBU)  According to discussions with business chambers  and 
contacts in three (Adana, Gaziantep and Hatay) of the four 
provinces which trade most with Syria - Kilis being the fourth - 
annual border area trade with Syria is likely to end up at about 
USD 68 million in value in 2004.  (reftel). 
 
Optimistic talk, but limited real expectations 
--------------------------------------------- -------- 
3.(SBU)  Although there was much fanfare and optimistic talk 
accompanying Erdogan's visit to Syria, business contacts predict 
little will change until Syria's economy can produce more 
disposable income and a financial system with which they can 
have confidence dealing.  Until then, they predicted 
continuation of trade largely characterized by Turkish exports 
of: 1)food and processed food products; 2) textiles and yarns; 
3) steel and building materials; 4) light machinery parts;  and 
5) light agricultural machinery.  Turkish imports from Syria, 
they predict, will remain quite limited and focused on local 
border area commodity consumables. 
 
4.(SBU)  One business contact whose chamber members accompanied 
Erdogan noted an increased Syrian demand for electronics and 
electrical machinery, but predicted little impact on 
Turkish-Syrian trade because Turkey does not produce much of the 
desired electronics at Syrian-desired commodity price levels and 
"the Syrians don't have the money to pay for them anyway." 
 
5.(SBU)  Another local contact, who is a regional level edible 
oils manufacturer whose brands sold well in Syrian before the 
Syrian introduction of tariffs to protect its nascent domestic 
edible oils industry, hopes the free trade agreement will allow 
his brands to compete more successfully in the Syrian market. 
He also hopes to be able to ship his products to Middle Eastern 
markets at lower cost via Syria under the new trade regime. 
 
Non-trade benefits for a SE Turkey city? 
--------------------------------------------- --- 
6.(SBU)  Reportedly, the long-rumored discussion of a Syrian 
consulate in southern Turkey was finalized during PM Edogan's 
visit, with the Syrian consulate in Gaziantep set to open at an 
undisclosed time in 2005. 
 
7.(SBU)  Some local business contacts passed on that several SE 
Turkish trade delegation members also remarked wryly upon return 
from Damascus and Aleppo that the Gaziantep trade delegation 
also had used its time during the Syrian visit to persuade 
Erdogan to raise income thresholds for participation in Turkey's 
domestic regional industrial incentive program to include 
Gaziantep. 
 
8.(SBU)  Baghdad minimize considered. 
 
 
 
REID