VZCZCXRO6894
PP RUEHBC RUEHDE RUEHDIR RUEHKUK
DE RUEHIT #0056/01 0320801
ZNY CCCCC ZZH
P 010801Z FEB 08
FM AMCONSUL ISTANBUL
TO RUEHC/SECSTATE WASHDC PRIORITY 7834
INFO RUCNIRA/IRAN COLLECTIVE PRIORITY

C O N F I D E N T I A L SECTION 01 OF 02 ISTANBUL 000056 
 
SIPDIS 
 
SIPDIS 
 
LONDON FOR GAYLE; BERLIN FOR PAETZOLD; BAKU FOR HAUGEN; 
DUBAI FOR IRPO 
 
E.O. 12958: DECL: 01/28/2018 
TAGS: ECON PREL IR TU
SUBJECT: TURKEY-IRAN BUSINESS COUNCIL SEEKS EXPANDED TRADE 
TIES WITH IRAN 
 
 
Classified By: Deputy Principal Officer Sandra Oudkirk; 
Reason 1.5 (d) 
 
¶1.  (C) Summary.  Turkey-Iran Business Council Chairman Ali 
Osman Ulusoy on January 23 called for expanded commercial 
ties between Turkey and Iran, arguing such ties promote 
economic reform inside Iran.  Last month he chaired a meeting 
in Istanbul with the President of the Iranian Chamber of 
Commerce and plans to send a follow-up delegation led by the 
President of Turkey's Chambers of Commerce to a March 10-11 
meeting in Tehran.  We warned Ulusoy about the tightening 
international sanctions regime against Iran and the need for 
vigilance by Turkish companies regarding cooperation with 
economic sectors in Iran controlled by the regime.  Ulusoy 
replied that 90% of bilateral economic cooperation was in the 
form of hydrocarbon imports from Iran, a sector his business 
council is not involved in promoting.  While Ulusoy was vague 
when asked for examples of specific commercial deals upcoming 
between Turkey and Iran, a business council staffer 
afterwards promised to share details on pending deals and 
about the March meeting in Tehran.  Comment:  As a 
businessman first, Ulusoy is more interested in promoting 
Turkish businesses in and exports to Iran, rather than 
Iranian exports to Turkey.  Helping reform the Iranian 
economy is a secondary motive for him compared to making 
export profits.  That said, we will stay in contact with his 
staff to try to persuade the Council to be more vocal in its 
dealing with Iranian businesses about the need for more 
economic transparency and reform in Iran.  End summary. 
 
¶2.  (C) Consulate General Istanbul's Iran Watcher on January 
24 met with Ali Osman Ulusoy, Chairman of the Turkey-Iran 
Business Council, to request a readout of the Council's 
December meeting in Istanbul with a visiting Iranian Chamber 
of Commerce delegation, and to sound him out on future plans 
to promote trade ties with Iran.  Ulusoy was joined by 
Business Council members Riza Eser (a Turkish citizen born in 
Iran) and Business Council coordinator Akin Diblan. 
 
¶3.  (C) Ulusoy confirmed press reports that the Turkey-Iran 
Business Council hosted an Iranian delegation in Istanbul on 
December 10 led by Mohammed Navandian, Chairman of the Iran 
Chamber of Commerce, Industry, and Mines.  Ulusoy avoided 
answering questions about specific commercial deals discussed 
at that meeting, but did confirm that a follow-up meeting 
will be held in Tehran March 10-11, led on the Turkish side 
by President of Turkey's Chambers of Commerce and Commodities 
Exchange, Rifat Hisarciklioglu.  After the meeting, Business 
Council coordinator Diblan (please protect) approached us and 
offered to share more details about pending commercial deals 
brokered by the Council, and about specific plans for the 
March meeting in Tehran.  Post will follow up with Diblan and 
share this information when received. 
 
¶4.  (C) Ulusoy insisted that the Business Council's 
cooperation with Iran is only commercial, not political. 
Participation by Turkish businesses in the Business Council 
is voluntary, and many Turkish companies with business in 
Iran are not members.  Ulusoy characterized Turkey's 
commercial relations with Iran as "slowly developing and 
improving, but not satisfactory."  We explained to Ulusoy the 
tightening internationals sanctions regime against Iran, 
including the P5 1 agreement on elements for a third UNSCR 
Chapter VII resolution.  We warned of the need for vigilance 
by Turkish companies pursuing deals in Iran, particular in 
key economic sectors in Iran controlled by the Iranian regime 
such as the hydrocarbon and banking sectors. 
 
¶5.   (C) Ulusoy replied that 90% of bilateral economic 
cooperation was in the form of hydrocarbon imports from Iran, 
cooperation his business council is not actively involved in 
promoting.  Instead, he said his council's focus is on 
promoting Turkish trade and exports to Iran, including 
textiles, food and other agricultural products (e.g., 
tobacco), consumer electronics, cars, and furniture/housing 
material.  According to the Turkish Foreign Exchange 
Relations Board (DEIK) website (www.deik.org.tr), in 2006 
Turkey exported 1.05 billion dollars of goods to Iran and 
imported 5.623 billion dollars, a total trade volume of 6.68 
billion dollars, representing a significant increase over 
2004-5 especially on the import side. 
 
¶6.  (C) Brushing aside the statistics, Ulusoy asserted that 
closer commercial ties between Turkey and Iran, and 
especially a deeper Turkish commercial presence in Iran, will 
help promote positive changes -- such as privatization, 
tariff reduction, financial transparency, and other economic 
reforms -- within the Iranian economy and Iranian society. 
"There are many problems that politicians and diplomats 
 
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cannot solve, that businessmen can."  He expressed 
frustration at "tightening restrictions" placed by the GOT on 
commercial cooperation with Iran, as a result of the 
international sanctions against Iran.  "Turkey's companies 
are complying with sanctions against Iran more than companies 
from most other countries, which it is hurting our exports 
and preventing us from wielding more positive influence in 
Iran." 
 
¶7. (C) Ulusoy several times highlighted his "60 years of 
experience dealing with Iran" as teaching him that direct 
negotiations with Iran, rather than economic pressure or 
military force, is the only way of facilitating real change 
there, and urged the USG to consider offering such dialogue 
with Iran without preconditions.  Poloff explained that 
Secretary Rice has offered to meet her Iranian counterpart 
 
SIPDIS 
anytime, anywhere, provided Iran complies with the UNSCR 
Chapter VII obligation to suspend its enrichment program. 
Ulusoy predicted Iran would never take that step under its 
current Supreme Leader or President. 
 
¶8. (C) Comment:  As a Turkish businessman first and foremost, 
Ulusoy's primary goal is promoting Turkish business in and 
exports to Iran, rather than promoting Iranian exports to 
Turkey.  Though Ulusoy several times highlighted the 
"transformative aspects" of Turkish business expansion in 
Iran, this point was clearly intended primarily to satisfy a 
skeptical USG interlocutor, and was of secondary importance 
to Ulusoy compared to the goal of expanding exports to  -- 
and thus profits from -- Turkey's largest neighbor.  The fact 
that hydrocarbon imports to Turkey make up over 85% of the 
total bilateral trade volume, and that Turkey's ability to 
export to Iran is increasingly constrained by what Ulusoy 
characterized as the GOT's desire to adhere carefully to 
UNSCR requirements, suggests the Turkey-Iran Business Council 
may have only marginal influence over the bilateral trade 
relationship.  That said, we will stay in contact with his 
staff to learn more about specific pending trade deals and to 
try to persuade the Council to be more vocal in its dealing 
with Iranian businesses about the need for more economic 
transparency and reform in Iran.  End Summary. 
 
WIENER