US embassy cable - 05ANKARA1610

UNCLAS SECTION 01 OF 02 ANKARA 001610 
 
SIPDIS 
 
SENSITIVE 
 
TREASURY FOR OASIA -- CHRIS PLANTIER 
EX-IM BANK FOR MARGARET KOSTIC 
USAID FOR VALERIE KWOK 
 
E.O. 12958: N/A 
TAGS: ECON, PGOV, EAID, TU 
SUBJECT:  AMBASSADOR VISITS BURSA 
 
REF:  ANKARA 5781 
 
SENSITIVE BUT UNCLASSIFIED. 
 
Refs: A) 04 Ankara 4332, B) Ankara 912 and 1090 
 
1.  (SBU)  Summary.  Visiting Bursa, Turkey's fourth 
largest city and a leading industrial center, the 
Ambassador heard from officials and business leader about 
the strain a strong lira and the end of global quotas is 
putting on the Turkish textile industry.  Officials and 
business people were interested in developing new 
relationships with the United States, including seeking 
Ex-Im Bank support for major municipal projects such as a 
light rail system.  The Ambassador also highlighted U.S. 
financial support for educational and medical assistance 
to poor Turkish families.  The day-long visit served to 
emphasize dimensions of the bilateral relationship that 
are too often overlooked as anti-American feeling grows 
in Turkey.  End Summary. 
 
2.  (SBU)  Ambassador Edelman paid a visit to the city of 
Bursa on March 14.  With a metropolitan population of 2.5 
million, Bursa is Turkey's fourth largest city and an 
important center for the textile, automotive, and 
processed foods industries.  The first capital of the 
Ottomans, Bursa is a site for historical tourism, and 
Uludag mountain, which towers over the city is Turkey's 
largest ski and winter sports center.  Located just 
outside Bursa is Cargill's $100 million sweetener plant, 
the largest U.S. agricultural investment in Turkey, which 
over the years had been plagued with regulatory problems 
but is now operating smoothly (ref A). 
 
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Governor Copes with Crowding and Pollution 
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3.  (SBU)  Meeting with Bursa governor Oguz Koksal, the 
Ambassador expressed appreciation for the provincial 
government's support for Cargill.  Claiming that the 
fears of many in the community that the plant was an 
environmental risk had been proven unfounded, Koksal said 
he was happy to support the plant as a source of local 
jobs and income.  According to Koksal, his main issues as 
governor are dealing with the traffic and environmental 
traffic problems created by the city's rapid population 
growth.  Noting the importance of the textile industry to 
Bursa, Koksal said he was confident that Turkish textiles 
would remain globally competitive despite increased 
competition from China following the expiration of the 
multi-fiber agreement.  He said Turkish producers would 
have to "move up the value chain" and produce high- 
quality goods for the fashion market. 
 
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Mayor Looking for Ex-Im Bank for Light Rail 
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4.  (SBU)  Mayor Hikmet Sahin, an AK Party member, listed 
several projects, including expansion of the city's light 
rail system, that were designed to address the congestion 
and air and water pollution problems.  The main challenge 
was financing.  He said Bursa would continue to seek U.S. 
Ex-Im Bank support for the expansion of Bursa's light 
rail system.  The Ambassador noted that a U.S. company, 
Earth Tech, was interested in the project.  According to 
the mayor, other major projects in the works include a 
new cable car to the ski resort on Uludag, a fast ferry 
boat to Istanbul, a wastewater treatment plant for the 
dirty Nilufer River, and a municipal natural gas 
distribution network that would replace the soft coal 
used for home heating.  Mayor Sahin also described in 
front of the press the importance to Turkey of keeping a 
good relationship with the United States. 
 
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Exporters Worried About Textile Industry 
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5.  (SBU)  During a luncheon hosted by the Industrialists 
and Businessmen's Association of Bursa (BUSIAD), the 
city's leading exporters were deeply worried about the 
fate of the region's textile industry.  The industry is 
suffering from the appreciation of the Turkish lira 
against the dollar and the euro over the past year as 
well as competition from low cost Chinese textile 
companies following the end of the textile quota system. 
One leading firm said it had recently laid-off over 1000 
employees and another complained about what he said was 
the WTO's failure to enforce labor and other commitments 
China made when it joined the WTO.  On the other hand, 
representatives of automotive parts makers, several of 
whom have joint ventures with U.S. firms, were more 
quietly pleased with their success in exporting to 
Europe.  A maker of plastic playground equipment 
described how he had through hard work and perseverance 
broken into the U.S. market. 
 
6.  (SBU)  The Ambassador also thanked BUSIAD for the 
support it had extended to Cargill.  In response to a 
call by one participant for the creation of Qualifying 
Industrial Zones (QIZs) that would allow Turkey to export 
textiles to the United States duty-free, the Ambassador 
described the need for U.S. legislative action and the 
political sensitivity of textile imports in both 
countries.  In any case, the end of the quota system made 
such a mechanism less attractive in the textile sector. 
 
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Neighborhood Health Clinic Benefits from U.S. Support 
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7.  (SBU)  The Ambassador used a neighborhood health 
clinic to highlight the recent $9 million USG grant to 
the Turkish Government's "Social Risk Mitigation Project" 
(ref B).  Doctors and patients who were taking advantage 
of the program -- which provides small cash payments to 
mothers who ensure that their children receive regular 
medical checkups and remain enrolled in school -- 
described how the program was making a measurable 
difference for poorer people.  The chief doctor, who sees 
over 50 patients a day in the crowded center, said that 
the payments were "very motivational" for Turkish 
families despite their small size. 
 
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Press Coverage 
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8.  (SBU)  The Ambassador's visit received considerable 
local and national press attention.  In addition to being 
followed throughout the day by a pack of journalists (who 
were mainly interested in subjects unrelated to the 
visit), the Ambassador gave an exclusive interview to a 
small local newspaper.  All the city's major newspapers 
gave front-page coverage, and local television stations 
devoted extensive coverage to the visit.  The exclusive 
interview was published in its entirety, with a front- 
page lead.  The Ambassador highlighted that the long- 
standing U.S.-Turkey friendship is not restricted solely 
to international politics, but extends to a wide range of 
important bilateral issues.  In addition, he answered 
questions regarding Turkey's EU membership, Armenia, Iraq 
and the problem of anti-Americanism.  The Ambassador also 
visited the Bursa American Corner located at the 
headquarters of the Bursa Chamber of Commerce and 
Industry, and had an unremarkable meeting with some 
members of the Chamber's board. 
 
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Comment 
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9.  (SBU)  Bursa is a clearly a dynamic city that is 
going through a period of fast growth and change as 
Turkey becomes more deeply integrated into the global 
economy.  The success of the automotive industry and 
relative decline of textiles is an example of that 
change.  The government officials and business community 
were interested in expanding the trade and investment 
relationship with the United States and are clearly 
interested want to pursue Ex-Im Bank financing for the 
light rail project.  Despite inordinate press focus on 
subjects unrelated to the visit (such as President 
Sezer's planned visit to Syria), the visit successfully 
highlighted dimensions of the bilateral relationship that 
are too often overlooked in the context of growing anti- 
Americanism in Turkey. 
EDELMAN