US embassy cable - 05ISTANBUL2072

UNCLAS ISTANBUL 002072 
 
SIPDIS 
 
SENSITIVE 
 
DEPT FOR EB/TPP/ABT, EB/TPP/MTA/MST, EUR/SE 
COMMERCE FOR ITA/OTEXA/MARIA D'ANDREA 
DEPT PASS USTR FOR LERRION 
TREASURY FOR INTERNATIONAL AFFAIRS - PLANTIER 
 
E.O. 12958: N/A 
TAGS: ECON, ETRD, TU, Istanbul 
SUBJECT: EXPORTERS ASSEMBLY CHIEF PUSHES FOR NEW U.S. TRADE 
DEAL 
 
REF: ISTANBUL 1839 
 
This message is sensitive but unclassified-- not for internet 
distribution.  This message was coordinated with Embassy 
Ankara. 
 
1. (SBU) Summary: Suleyman Orakcioglu, acting President of 
the Turkish Exporters' Assembly (TIM) and head of the 
Istanbul Textile and Apparel Exporters Association (IKTIB) 
raised eyebrows here this week with his announcement to the 
press that a new "special trade agreement" is in the works 
between the United States and Turkey.  The accord, he 
predicted, could raise Turkish exports to the U.S. by USD 2 
billion a year if it is implemented in 2006.  While such an 
agreement has long been a priority goal of IKTIB, Orakcioglu 
appears to have spoken out of turn, and Trade 
Undersecretariat officials contacted by Embassy Ankara 
indicate that there is nothing behind the report.  End 
Summary. 
 
2. (U) Orakcioglu's statement, which was disseminated widely 
in several leading business papers, highlighted a 
longstanding IKTIB goal: conclusion of a special trade 
agreement with the United States that would lower U.S. 
customs duties on textile and apparel in exchange for the use 
of U.S. inputs.  IKTIB officials have raised the idea 
repeatedly in meetings with us, and also pursued it during 
the recent visit of an American Turkish Council (ATC) 
delegation headed by General Scowcroft and Ambassador James 
Holmes. 
 
3. (U) In his comments to the press, Orakcioglu noted that 
work was going on on the project with the Foreign Trade 
Undersecretariat under the leadership of Turkish Trade 
Minister Kursad Tuzman, with the goal of increasing trade 
volume with and exports to the United States.  He added that 
Turkish textile producers had presented their case to their 
American counterparts, and several "favorable developments" 
had occurred.  In sum, he concluded, "circumstances are 
better than they ever have been for such an agreement," and 
there is a possibility for it to be implemented in 2006. 
 
4. (SBU) In a meeting to discuss the agenda for the upcoming 
Trade and Investment Framework Agreement (TIFA) Council 
meeting, FTU officials raised the issue of the inclusion of 
textiles in special Qualified Industrial Zones (QIZs).  They 
said that while they would be interested in discussing this 
subject during the TIFA, they would only want to do so if the 
USG were prepared to include textiles in the QIZs.  They 
understood, however, that this was unlikely and would rather 
not spend time on the issue if the USG position has not 
changed.  They added that they were hearing that U.S. textile 
industry officials were urging Turkish producers to push for 
a special agreement, but they were unsure whether these U.S. 
representatives were also communicating to the USG their 
support for such an arrangement. 
 
5. (SBU) Comment: We have repeatedly cautioned our 
interlocutors that such an agreement is extremely unlikely, 
but hope springs eternal, and a "special trade agreement" 
seems to have replaced qualified industrial zones as the life 
buoy of choice for Turkey's textile exporters.  The industry 
is sounding less dire in its forecasts, however: though 
Orakcioglu and others had earlier predicted that the new 
global trade regime for textiles would mark the deathknell of 
Turkish industry, in his most recent comments he was more 
phlegmatic, noting that the industry expects USD 14 billion 
in exports this year (5 billion in textiles), USD 15.5 
billion in 2006, and that it is targeting a level of USD 
20-21 billion in future.  End Comment. 
JONES