US embassy cable - 05ADANA63

UNCLAS SECTION 01 OF 02 ADANA 000063 
 
SIPDIS 
 
SENSITIVE 
 
NOT FOR INTERNET DISTRO 
 
E.O. 12958: N/A 
TAGS: ETRD, ECON, ELTN, IZ, TU, ADANA 
SUBJECT: PRIVATE IRAQ TRADE MEETING SHOWS DIVERGING BUSINESS, 
GOVERNMENT VIEWS 
 
 
1. (SBU)  Summary:  A regional Turkish-American Business 
Association discussion of Iraq trade on March 18 in Iskenderun 
yielded some proposals from the Turkish business sector to 
expand their role in Iraq trade and profiled government 
involvement in the Iraq issue which seemed out of tune to 
business participants.  End Summary. 
 
2.(SBU)  On March 18, AMCON Adana PO participated in a panel 
discussion of Turkish-Iraqi trade attended by Hatay governor 
Abdulkadir Sari, Antakya AK Party MP Mehmet Soydan, the 
Iskenderun sub-governor, Iskenderun mayor, national TABA 
president Adana Tas, DEIK Chairman of the Turkish-Iraqi Business 
Council Ercument Aksoy and regional TABA chair Erdal Kamisli, as 
well as about 200 TABA members and press. 
 
3. (SBU)  Aksoy and Tas both emphasized the expanded 
opportunities for Turkish investment, as well as trade, in Iraq, 
noting that Turkish companies are very active in Iraq and 
receiving considerable contract awards.  They called for 
speedier transition toward rule of law, particularly for 
contractual purposes, and establishment of a functional Iraqi 
banking system as desired systemic improvements to the Iraqi 
economy.  They also said that transportation security is a 
continued high priority for traders, but noted some limited, 
gradual improvement.  DEIK proposed EX-IM bank financing of, and 
OPIC insurance coverage for, joint Iraqi-Turkish 
build-operate-transfer contracts in Iraq.  Both TABA and DEIK 
complained that no companies were writing adequate insurance 
policies for Iraq. 
 
 
4.(SBU)  Aksoy also pointed out that Turkish private sector 
relative success came despite a "visionless" Turkish foreign 
policy toward Iraq and "little or no (Turkish) government 
appreciation of the changes taking place in Iraq."  Tas noted 
that, while the press was full of stories about U.S.-Turkish 
clashes on Iraq policy, these reports should be discounted.   He 
said that "while some short-term tactical differences 
occasionally may arise, Turkey and the U.S want and see the same 
things on the big important points and their policies largely 
coincide."  He also commented that the Hatay governor used the 
term "strategic" several times in his remarks, but could not 
"explain what that term meant in relation to Iraq because the 
government had no Iraq policy. " 
 
5.(SBU)   Although initially not scheduled to address the TABA 
meeting, the Hatay governor briefly spoke and said that more 
trade between Turkey and Iraq was desirable, but that Turkey was 
handicapped by structural problems in Iraq.  He said that the 
chief problems for Turkish trade with Iraq were security and 
political instability in Iraq.  Looking directly at AMCON Adana 
PO, he also said that it was incumbent on regional partners to 
"fight terrorism everywhere."  (Comment: this was a clear 
reference to engaging the PKK in northern Iraq more kinetically. 
 End Comment.)   Soydan followed the governor and echoed his 
concerns about security in Iraq for Turkish commerce, especially 
truckers, and complained that Turkish companies did not enjoy 
access to the levels where decisions on large contracts are 
being made.  In a Q&A when AMCON Adana PO spoke, Soydan pressed 
this point, saying that UN sanctions on Iraq, which he said the 
U.S. had backed, had greatly damaged southeast Turkey's regional 
economy, and Turkish companies deserved preferential access to 
Iraqi contracts as compensation.  He also discounted the 
importance of competitive bidding as described by PO and 
suggested that he did not see the relevance for Federal 
Acquisition Regulations in the public tender process. 
 
6.(SBU)  PO noted that Turkey's companies were faring well in 
Iraqi business, which Soydan doubted, and affirmed that Iraqi 
contracting was done on a competitive basis.  PO also countered 
the pessimistic view of developments in Iraq, noting the 
election process, ongoing government formation and prospect of a 
new constitution in the coming months, all within the framework 
of Iraqi inter-ethnic political dialogue.  Tas and Aksoy both 
corrected the MP's impression of poor Turkish performance in 
Iraq, noting the broad participation of Turkish companies in 
multiple sectors of the Iraqi economy. 
 
7. (SBU)  Kamisli also pressed the MP to "get the (Turkish) 
government engaged where it can really help," pointing to the 
immediate need for an improved and regularly maintained road 
from Gaziantep to Silopi as well as a "functional border 
crossing or two." 
 
8.(SBU)  Comment:  According to business contacts,  the TABA 
meeting profiled Turkish government involvement in the Iraq 
trade issue which seemed out of tune to business participants. 
It also seemed as if the governor and MP genuinely were not 
aware of the trilateral dialogue on transportation security or 
the current manner in which Turkish companies already are at 
work in Iraq.  It is also worth noting the MP's conviction that 
contracting awards in Iraq must be decided in some less 
transparent form than through FAR-based public tenders and 
online dissemination.  End Comment. 
 
9.(U) Baghdad minimize considered.