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U.S. Department of State

Diplomacy in Action

U.S.-Turkey Economic Partnership Commission

Jose W. Fernandez
Assistant Secretary, Bureau of Economic, Energy and Business Affairs

Selim Yenel, Deputy Undersecretary for Bilateral Affairs and Public Diplomacy
Washington, DC
March 3, 2011

Date: 03/04/2011 Description: Jose Fernandez, Assistant Secretary of State for Economic, Energy and Business Affairs, and Ambassador Selim Yenel brief on the Economic Partnership Commission between the U.S. and Turkey at the Washington Foreign Press Center. - State Dept Image


5:45 P.M. EST

MODERATOR: Good afternoon, everyone, or should I say good evening. Welcome to the Washington Foreign Press Center, and thank you all for coming and staying this late. We really appreciate it. This is an on-the-record briefing to discuss the Economic Partnership Commission, the U.S.-Turkey commission that’s been meeting here in Washington.

Before we get going, I just want to give you a reminder to shut off any cell phones and BlackBerrys or put it on vibrate, please. The format for today’s briefing is we’ll have some quick opening remarks from both of our briefers and then we’re going to move to a Q&A session.

It really is a pleasure for us to have Assistant Secretary Jose Fernandez and Under Secretary Selim Yenel here today. They’ve both been very busy, obviously, and we’re really happy that they took some time out to come here. First, I’d like to say to the Ambassador “Hosgeldiniz” -- to Washington Foreign Press Center – I know that public diplomacy is near and dear to your heart, and I just want to say on the record that your countrymen from Turkey are known as some of the most professional and hardworking journalists here in Washington. Unfortunately for you, Ambassador, they’re also known for asking very hard questions. (Laughter). So we’ll see how you survive today’s briefing.

So without any further ado, let me ask Assistant Secretary Fernandez to come up and give some opening remarks.

ASSISTANT SECRETARY FERNANDEZ: Good afternoon. This has been a long day. It’s been a wonderful day. It’s been a day that I think we have all profited from, and I’d like to tell you a little bit about it. This is my first opportunity to be here at the Foreign Press Center, and I hope that there will be more to come. And what I’d like to do is speak to you today about our – what we just concluded, which is the United States-Turkey Economic Partnership Commission meeting that we just finished a few minutes ago.

Turkey is, as many of you know, is now the 17th largest global economy with one of the world’s fastest growth rates, and it’s a member of the G-20. And yet currently, U.S. goods represent only about 5 percent of Turkey’s imports. And although this is a small percentage of Turkey’s imports, we believe that our trade relationship is strong and that it’s growing. From 2009 to 2010, trade between our two countries increased by 37 percent. And we’re happy with this recent growth, but significant opportunities remain for further growth in the U.S.-Turkish economic relationship. We can and we need to do more.

So we’ve had this sixth meeting of the Economic Partnership Commission, and this time we focused on exploring opportunities for further economic and commercial cooperation between the United States and Turkey to try and build the economic and the commercial pillar in our bilateral relationship. The EPC is a key component in realizing the goal of strengthening the U.S.-Turkey framework for strategic and economic cooperation which was held in October of 2010 here in D.C.

This morning and this afternoon, our two delegations tackled some of our ongoing issues, issues such as market access for U.S. agriculture and pharmaceuticals, as well as Turkey’s concerns about trade preferences here in the U.S., and also some of their concerns on agriculture. But our main focus – and this is – was a very exciting part of the day – our main focus was on discussing ways to enhance business-to-business ties and to try to promote innovation as well as finding and enhancing areas of cooperation. And these include discussions on cooperation in third countries, on renewable energy, on entrepreneurship, on partnering with the Turkish Government, on making Istanbul an even more important financial center, on opportunities for investment and cooperation on electricity generation and distribution, and also for cooperation with small and medium enterprises.

Taken together, all of these factors could open up billions of dollars in new trade and investment and opportunities for U.S. firms. As the U.S. and Turkey continue to develop and build our relationship, we believe that our two governments must play the vital role of creating the type of environment that will be conducive to increased trade and investment. And we talked about what we could be doing better, but it’s also important to know that our business sectors have not been laying low. They have actually been quite active.

Over the past year, we can point to a number of successes. Just this week, in fact, General Electric and Tulomsas completed their first jointly manufactured PowerHaul Locomotive in Turkey for export to England. Last week, Turkish airlines announced that it would buy an additional 15 Boeing 737 planes, adding to the 20 that it’s agreed to purchase just last year. And there’s many success stories that I could point to, but I think the reason – one of the reasons that we came together today is that both of us believe that the opportunities that are out there far exceed what we’ve achieved so far. And we’re trying to work hard, and we’re working hard, to growing our trade and investment relationship.

I have felt since the time that I began this job a little bit over a year ago – in fact, 14 months ago now – that the potential for increased trade and investment with Turkey was enormous. And I’ve had the pleasure of traveling there three times in the 14 months that I’ve been here. And I can see from today’s meeting that the Economic Partnership Commission is making good progress, and we actually had a to-do list nine months ago and we went through it today to see what we had achieved.

And I can see that we’re making good progress in establishing the strategic economic relationship that our President called for in 2009. I look forward to continuing our work with our partners in Turkey to further this progress. And I believe, again, that the opportunities for the future are much greater than the good successes that we’ve had so far.

Thank you, and I’d like to ask my colleague and friend, Ambassador Yenel, to come to the podium. Thank you.

AMBASSADOR YENEL: I suppose I could do this in Turkish, but then I’d be doing a disfavor to my colleague, Jose. (Laughter). But I’d like to start off by saying a big thank you to Jose and his team, because one thing is not only the hospitality that we’ve seen, but also the commitment by the U.S. side in improving trade and commercial relations between our two countries. And this commitment, this intense commitment, is not only by the State Department, but all the relevant departments that we’ve had the opportunity to talk to this morning and this afternoon. So I think that we started off on a good footing.

The reason why we are trying to put an emphasis on economic relations is because this has been a tool – this has been a leg that has been – fallen short. We think that in the long decades of our cooperation, we put an emphasis too much on political and military affairs and not too much emphasis on economic and commercial ties. So there was a commitment made, of course, two years ago by President Obama saying that he wants to have a model relationship. And also, we understand that he wants to double trade with the U.S. in five years, and I think that we also want to increase our trade with the U.S.

Today, actually yesterday also, we had a private sector meeting which was quite encouraging because we need to bring the private sector much more often together. But today, this was basically between the relevant departments to talk about opportunities and, of course, certain areas of mutual concern. But we wanted to stay on the positive side. We want to focus on the opportunities. And there, of course, there was the energy sector, renewable energy and energy efficiency, which looks very, very promising. And we do hope that U.S. companies can move in and take the opportunities of helping us generate more and more energy.

Also, another area was entrepreneurship. You might remember that last year, there was an entrepreneurship summit here in Washington and we hope that there will be another one in Turkey by the end of this year. We also had a good discussion on having technical assistance for having Istanbul become a financial center, not only regionally but globally. We know the shortcomings, we know the difficulties, but we believe that if we can have more and more assistance by the U.S., I think that we can reach our goal much quicker.

We also discussed the possibility of having joint investment and production cooperation in third countries, because we believe that there’s a comparative advantage of our companies in our region, and there is a comparative advantage of U.S. companies in Latin America. We intend to focus much more beyond than the usual areas that we’re in doing business, so I think that if we can work together in third countries, that would also be of use.

Issues of common concern are trade and agricultural products, pharmaceuticals, and generalized system of preferences for Turkish exports. I mean, there’s concern for both sides. But we are trying to find fresh and creative ways to overcome these difficulties. And I think that our goal and our – let’s say our task as the foreign ministry and the State Department is to nudge our relevant authorities to come up with the ways in which we can overcome the difficulties.

The EPC is a mechanism to actually achieve a balanced and increasing bilateral trade volume. We have also noticed that the volume of our trade is not as much as we could actually realize. There is a goal in which we hope to increase this much quicker because when we look at Turkish commercial relations with so many other countries, you can see the jumps, you can see the dramatic increases with those countries. But when you look at the level of cooperation or commercial relations between Turkey and the U.S., they’re lacking. And we have to be self-critical here. There’s much to do, and we think that we have to inform Turkish companies of the opportunities in the U.S. They should not be so hesitant to come here. And also, if we can inform the U.S. companies about the opportunities in Turkey and beyond, I think that we could do much more progress.

So today, we concentrated on some areas of some problems that have existed for a number of years, but mostly on future opportunities, because, as I said, energy entrepreneurship, finance, these are the areas of which I think that we can work together and reach a high-level cooperation that could be used not only in our respective countries, but beyond as well.

So this is the gist of, I think, my summary of what we have had today. But we are here to answer your questions. Let me finish by thanking Jose and his team again. Thank you.

MODERATOR: Thank you, sir, very much. We appreciate that. Okay, we only have about 20 minutes for questions, so let’s try to keep the questions short and sweet, and don’t forget when the microphone comes around, please clearly state your name and news organization. And why don’t we start up here with Hasan.

QUESTION: Hasan Hazar, Turkiye Daily. Mr. Fernandez, could you talk about more on EPC’s role to invest and to work together, especially opportunities in third countries? Thank you.

ASSISTANT SECRETARY FERNANDEZ: Sure. Turkish companies are very active in many parts of the world where U.S. companies are not as active. And you find Turkish companies quite active in Central Asia, Central Europe, parts of the Middle East, parts of North Africa in the areas, for example, of infrastructure, the Turkish construction industry has been quite active. These are areas where we believe our companies, some of our engineering companies, might be interested in partnering with Turkish companies. Similarly, our construction companies are well known in Latin America, and where – and Turkish companies are not. So there’s – some of it is just geographical and the history, and it seems that both of our industries can complement each other in different parts of the world.

MODERATOR: Next, we’ll go to Ali.

QUESTION: Yes, Ali Aslan, Zaman Newspaper. My question is to you, Mr. Ambassador, welcome. You said you’re looking for U.S. support to be able to make Istanbul a larger financial center. Could you specify what you mean by U.S. support on this, into like – could you put some details on that?

AMBASSADOR YENEL: Well, thank you very much for that question. Yesterday especially, we had some experts outline some of the problems that exist in Istanbul becoming a financial center. It is a local and regional one, but we need to build up the infrastructure. For example, broadband was mentioned, costs were mentioned. But there are always positive sides as well. And today we had a presentation on comparative advantages and comparatively, let’s say, disadvantages of Istanbul and what needs to be done.

There are a lot of technical points that have to be addressed, and we can use the expertise of the U.S., as New York and Washington are major financial centers. So we have laid out our ideas, and we also asked for some guidance on how to achieve our goal of having Istanbul as a financial center. We know that it will take some time, but instead of doing it alone, if we can get all the help we can from our U.S. colleagues, then this would shorten that period. Thank you.

MODERATOR: Let’s go next to Elcin.

QUESTION: Thank you, Elcin Poyrazlar, Cumhuriyet Daily. I was wondering where do we stand in terms of the difficulties about agricultural products, especially the U.S. Administration and the U.S. wants to sell genetically modified products to Turkey and Turkey has some agricultural products which cannot get into the U.S. market. Did you find some roadmap to solve these issues? Where do we stand?

ASSISTANT SECRETARY FERNANDEZ: Thank you for the question. We talked about both of those issues, and then we had a good discussion with our respective colleagues from our departments of agriculture. We’re making progress in terms of having Turkish products, specifically figs and pomegranate, which have been the longstanding bones of contention, go through our regulatory process, and we talked about the status of that. And it seems that there has been real progress made.

We also discussed some of the concerns that our agricultural companies, not just U.S. agricultural companies but also European agricultural companies, have had with respect to the – some of the approval procedures in Turkey. And we talked on it. I think we have – we don’t have an answer, but at least we have a way forward to try and get more discussions between the both sides on that issue and see if we can actually reach a resolution that will be beneficial to both sides, both to our manufacturers as well as to consumers in Turkey.

AMBASSADOR YENEL: If I can just add a few words. We focused on those areas in which we need more and more information, and as Jose said, we agreed to have more intense dialogue on both of these issues, and we believe that there is the will on both sides to move ahead. And therefore, we are hopeful in that sense that if we have more intense dialogue, if we can talk to each other and understand each other and basically hear each other, then there’s a way ahead. Thank you.

MODERATOR: Before we take a question from Ilhan, because I’m sure it’s going to be a very hard question, we have a group of young and up-and-coming journalists from Turkey that are here today, and I thought I’d just put them on the spot. Maybe Sevin or Ozden would – do we have question? They’re leaving for New York tonight, so – actually quite shortly, so as promising young journalists, I’m sure you have a question. Yes, please. Your name and outlet, please.

QUESTION: Ozden Erkus from NTV Television. Mr. Fernandez, I have a question for you. You talk about the to-do list and what you issued. Would you please clarify that what you issued – would you please give us some information about your to-do list, what you have done.

ASSISTANT SECRETARY FERNANDEZ: Well, first of all, let me tell you, you will enjoy New York. That’s my hometown. (Laughter.) Well, we – the to-do list is some of the things that Selim has mentioned and that I mentioned. We have – we’re going to have more discussions on the agricultural issue. We’re going to have discussions on the pharmaceutical questions. We have made good progress on renewable energy projects, some of the projects that we heard today from the Turkish side, what they have in mind. And we – the to-do list there is to see how U.S. companies and U.S. firms can get involved there.

At the same time, our Department of Energy has been pursuing some projects. For example, one near Izmir called the Near Zero Project, which is designed to lower energy consumption. So that – and the to-do list there is how do we scale that up, how do we go beyond Izmir? So by a to-do list I – a lot of these – oftentimes you have discussions that are just discussions. What we want to do, and what we’re both committed to doing, is really finding concrete ways of moving forward on the – in the relationship.

MODERATOR: Sir, do you have a to-do list? (Laughter.)

AMBASSADOR YENEL: Well, actually, I’m waiting for Jose’s list and then I’ll just try to tick them off.

MODERATOR: Okay. Ilhan? I hope you’re ready.

QUESTION: Thank you. Ilhan Tanir from Hurriyet News and Vatan. Assistant Secretary, first of all, you mentioned about energy projects, and I think one of the areas that the both countries want to work together in energy and renewable energy. My question is on nuclear energy. It seems like Russia and South Korea and other countries have been in the Turkish market, but we don’t see American companies, which are likely or supposed to be the bigger companies in nuclear sector. We don’t see in the Turkish market. Would you be able to elaborate on that – if the American companies are coming Turkey to work on the nuclear projects?

And second question is: We heard that big jump on Turkish export, almost every other country or neighboring countries, but you mentioned that, Mr. Ambassador, not with U.S. Have you been able to see what was the biggest problems or the problems that have been – obstructed this, not being able to do this big job and if you could tell us couple of those big problems in the past and you are going to able to overcome this obstruct. Thank you.

ASSISTANT SECRETARY FERNANDEZ: On the nuclear energy, you’re right. I mean, the U.S. civil nuclear companies are among the best in the world, and we’re always looking for opportunities for those companies. We didn’t discuss it today, but we believe that there are opportunities, and we will continue to do what we can, and all that we can, to try and promote U.S. – the U.S. nuclear industry in Turkey and elsewhere.

AMBASSADOR YENEL: Yes, on trade, actually there was a – I’d say a positive sign that there was a jump this year, comparatively – compared to last year. But we want that to grow exponentially, as we are doing with many other countries.

Now, we figured out that there are some problems on our side. First of all, it’s logistics. It’s – some of them are too far away, we find it too far away. The standards are different and some of our companies are lazy; let’s face it. And we believe that there’s a lack of information, and that’s why – and some of our companies are afraid to come into this market.

Similarly, there’s a lack of information on the U.S. side regarding the opportunities in Turkey, that they could do business. So it’s conducive upon us to inform our relevant institutions, our companies, those who are willing to listen, about the opportunities that exist in the two countries. And as we discussed – as we mentioned, actually, in our opening statements – that we are hoping to coordinate our efforts in third countries as well. But to do this, you have to bring out the information, and that’s not an easy thing to do. The U.S. is like a continent, and so it’s not just New York; it’s Milwaukee; it’s St. Louis; it’s California; it’s all these places.

So it’s an uphill battle, but I think that this is something that we can succeed with your help. Thank you.

ASSISTANT SECRETARY FERNANDEZ: And if I may, just on that point, on just one thing that Ambassador Yenel said, there’s an opportunity here, and we talked about that opportunity, and that is more cooperation between our small and medium enterprises. Over 90 percent of Turkish companies are small and medium enterprises, and we have been discussing an MOU between our Small Business Administration and KOSGEB and another agency from the U.S. Government to try and bring our small and medium enterprises together.

Those are the companies that, in this country, have led a lot of our export growth, have led a lot of our job growth, and I think there’s an opportunity here, and then we are going to pursue it.

QUESTION: [Ilhan Tanir follow-up.] Mr. Ambassador, yesterday, you mentioned political arena that U.S. has to do more to tell Turkish public what it has done. But in the trade or in the economic area, do you think that the U.S. side has been doing enough to invest or to increase the trade in the Obama Administration or the – in last, what, decade? Thank you.

AMBASSADOR YENEL: Well, one thing I can certainly say, that there’s a willingness, there’s a commitment to do so. But as I said, it’s a matter of getting the message out. So we believe that since President Obama has put a stake on it and he is committed to it – and we’ve seen that visibly today, and I think that we will be able to get that message across. And we have to help each other and this is what we intend to do.

We have the mechanisms. We have created some mechanisms. But we also want to cut the bureaucracy and be called – I mean, normally, the bureaucracy is called a factor that would stop many things. And we want to speed things up. So what we’re saying is that this is the new generation of bureaucracy in which you will see things moving much faster than before.

MODERATOR: Okay. Sevin, you have one? We’ll take two more questions.

QUESTION: Sevin Turan from Hurriyet, Planet Page. Sir, could you please elaborate on these renewable energy projects? I mean, are there any specific areas that you chose, especially in Turkey, or are we going to see new wind energy turbines or – all over the country? Thank you.

AMBASSADOR YENEL: Well, there was a good presentation by the ministry of energy about renewable energies – solar energy, wind energy, geothermal energy, and the opportunities that exist for new power plants. And that’s why our counterparts were saying countless times that they were excited by these opportunities, and we believe that there’s also already some commitments. And therefore, we are bullish about this.

I think that U.S. companies have the experience and they will actually continue to invest in Turkey because it’s a growing market. Each year it grows, as I heard yesterday, two percent more than the GDP growth each year. So that’s a huge market, and I don’t think that the U.S. will want to miss out on that.

MODERATOR: Do we have one final question before we conclude the briefing? I think everyone’s getting tired. I can see that Nur is falling asleep. (Laughter.)

Okay. Well, then, we’ll call it a wrap and that concludes our briefing today. Mr. Ambassador, thank you so much for taking the time. Mr. Assistant Secretary, thank you as well. We know it’s been a long day for both of you. Thank you so much.

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