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Dianne Wampler  02/05/2007 04:23:37 PM  From  DB/Inbox:  Dianne Wampler

Cable 
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UNCLAS    SENSITIVE     ANKARA 00238

SIPDIS
CX:
    ACTION: FAS
    INFO:   AMB PMA POL DCM ECON

DISSEMINATION: FAS
CHARGE: PROG

APPROVED: EXEC: RWILSON
DRAFTED: AGR: RGIFFORD, A/DCM
CLEARED: AGR: CGUVEN

VZCZCAYI838
OO RUEHC RUEHRC RUCPDOC RUEHIT RUEHGV
DE RUEHAK #0238 0361311
ZNR UUUUU ZZH
O 051311Z FEB 07
FM AMEMBASSY ANKARA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0838
INFO RUEHRC/USDA FAS WASHDC IMMEDIATE
RUCPDOC/USDOC WASHDC
RUEHIT/AMCONSUL ISTANBUL 2057
RUEHGV/USMISSION GENEVA 1534

UNCLAS ANKARA 000238 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR EUR/SE, EB/EPD, and EB/TPP/ABT 
USDA FAS FOR OFSO/DEVER, OCRA/FLEMINGS, MANNIX, BURDETT 
USTR FOR WEISS, ERRION 
ISTANBUL FOR FAS 
GENEVA FOR FAS 
 
E.O. 12958: N/A 
TAGS: EAGR ETRD TU WTO
SUBJECT: Top rice importer calls on Ambassador to ask United States 
to drop WTO rice case 
 
 
¶1. (SBU) Summary: On February 1, 2007, the Ambassador met with a top 
rice importer who wants to persuade the USG to drop the WTO case on 
Turkish rice imports in exchange for the GOT promising to lower the 
tariff on paddy (unmilled) rice.  The Ambassador responded that 
although he also hoped for a negotiated settlement that would 
enhance trade, any solution must be legally binding and WTO 
consistent.  End Summary. 
 
¶2. (SBU) In a meeting with the Ambassador on February 1, Mr. Yahya 
Akel, a wealthy and politically well-connected importer of rice and 
other agricultural products, expressed hope that the United States 
would agree to drop its WTO case against Turkey's rice import regime 
if the GOT agrees to reduce apparently temporarily the duty on 
imports of paddy rice, and not milled rice, to zero.  Such an 
agreement, he explained, would result in increased imports of U.S. 
paddy rice and fewer imports of Egyptian milled rice.  This would 
allow Turkish millers to stay in business.  Currently, because of 
the high cost of U.S. rice ($420/ton) and a 34 percent tariff, lower 
priced Egyptian milled rice, even with a 45 percent duty, is more 
attractive. 
 
¶3. (SBU) After expressing appreciation for Mr. Akel's comments and 
an understanding of his predicament, the Ambassador said that he 
would like to see the case resolved amicably through negotiation, 
but emphasized that any resolution of the case must be legal, 
permanent and adhere to WTO rules.  He made it clear that at this 
stage the process was legal, not political. 
 
¶4. (SBU) Mr. Akel admitted that the GOT knows that its rice import 
policies are WTO inconsistent, but at the same time is committed to 
"protecting its farmers" and will not change its system.  According 
to Mr. Akel, it may be impossible to negotiate a solution because 
the Turkish side is only willing to discuss the paddy rice 
tariff-reduction proposal at this time.  He said that Turkish 
officials are not ready to discuss the other points that the U.S. 
has raised in bilateral discussions.  He expressed concern that 
failure to resolve this case quickly could lead to deliberate 
discrimination against U.S. products, such as a further hike in 
soybean tariffs. 
 
¶5.  (SBU) The conversation concluded with the Ambassador reiterating 
his hope that a negotiated solution could be reached, but that a 
solution must be WTO consistent. 
 
---------------------- 
Rising Tide of Threats 
---------------------- 
 
¶6. (SBU) For several weeks now, Embassy's Agricultural Affairs 
Office has been inundated by a rising tide of messages similar to 
Mr. Akel's, not only from millers and importers, but from FTU 
officials and farmer groups.  During the Ambassador's meeting with 
Mr. Akel, Agoffice received two faxes addressed to the Ambassador 
from Turkish rice producer associations, threatening that their 
300,000 members would boycott all U.S. products if the case is not 
dropped. 
 
¶7.  (SBU) Earlier this month the FTU official responsible for 
imports said that last year's hike in tariffs for soybeans and 
soybean meal was a deliberate response to the rice case, and that 
the tariff could be increased again. 
 
¶8.  (SBU) Comment: So far, the Turkish side has not offered any 
substantive response to U.S. proposals.  Apparently, Turkish 
officials are not prepared to talk about the three points outlined 
in Ambassador Schwab's Jan. 12 letter to FTU Minister Tuzmen.  The 
Ministry of Agriculture, which obviously has an interest in the 
case, has neither lobbied to drop the case nor threatened 
retaliation.  End Comment. 
 
WILSON