VZCZCXRO0287
RR RUEHDA
DE RUEHDA #0048/01 3311320
ZNR UUUUU ZZH
R 261320Z NOV 08
FM AMCONSUL ADANA
TO RUEHC/SECSTATE WASHDC 4687
INFO RUEHAK/AMEMBASSY ANKARA 1230
RUEHIT/AMCONSUL ISTANBUL 1039
RUEHDM/AMEMBASSY DAMASCUS 0198
RUEHDA/AMCONSUL ADANA 1292

UNCLAS SECTION 01 OF 02 ADANA 000048 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON ETRD PREL SY
SUBJECT: TURKEY:  HATAY BUSINESS LEADERS SANGUINE ON INCREASING 
TURKISH-SYRIAN TRADE AND CONTACTS 
 
¶1.  (U)  SUMMARY.  Prominent members of Hatay's business 
community are hopeful about increasing trade and commerce with 
Syria through the province's two border gates.  Syria's recent 
reduction of a border fuel tax augers well for improved trade 
conditions for Turkish transporters, although truck convoy rules 
still impede what could be a steadier flow of Turkish goods over 
the border.  Women's business associations are also growing 
stronger, with a Turkish-Syria Women's Fair in the works for May 
¶2009.  Through AKP's diplomatic initiatives and more positive 
media portrayals of Syria, Turks have warmed to their southern 
neighbor.  END SUMMARY. 
 
 
 
--------------------------------------------- -------------- 
---------------------------- 
 
BUSINESS WITH SYRIA STILL BRISK FOR HATAY TRUCKERS 
 
--------------------------------------------- -------------- 
---------------------------- 
 
¶2.  (U)  Business leaders in Hatay province (flanked by Syria on 
the east and the Mediterranean sea on the west) hope that 
Turkey-Syria trade volume will reach $5 billion annually by 
2012, up from $1.2 billion recorded in 2007.  While regionally 
Gaziantep enjoys a large piece of that figure ($103 million in 
the first 9 months of 2008), Antakya Chamber of Commerce 
President Hikmet Cincin said Hatay has the second largest truck 
fleet in Turkey and is poised to take greater advantage of the 
Turkey-Syria Free Trade Agreement that came into force in 2006. 
Suleyman Ustun, owner of a local ground transportation company, 
told us despite the global financial crisis, business was 
booming for him.  Ustun said his firm trucks over the province's 
two border gates products such as cotton and synthetic yarns, 
chemicals, cement and soil products, vegetable oils, machinery, 
and spare parts.  His vehicles come back largely empty, however, 
save for the maximum 200 liters of diesel drivers can purchase 
in Syria as the country has little in the way of exports suited 
for Turkey.  Ustun said while the idea of importing more fuel 
for resale in Turkey is attractive, Syrian law offers a stiff 
penalty of six years imprisonment designed to deter would-be 
violators. 
 
 
 
--------------------------------------------- ------------------ 
 
SYRIAN FUEL LEVY RECENTLY REDUCED 
 
--------------------------------------------- ------------------ 
 
 
 
¶3.  (SBU)  Ustun said up until a few weeks ago, business was 
dampened by the Syrian-imposed "diesel fuel tax" of  $400-600 
that truckers paid per vehicle at the gate.  This fuel tax was 
levied to prevent trucks from taking advantage of the heavily 
subsidized and cheaper fuel rates in Syria -- some 85% cheaper 
for diesel.  This tax was recently lowered to $100-200 to 
promote brisker business.  According to Ustun, the warm 
relationship between PM Erdogan and Syrian President Bashar 
al-Assad can't be discounted in the recent adjustment in the 
border tax.  He believes during their recent vacation together 
in the Turkish resort of Bodrum, Erdogan likely conveyed 
complaints of Turkish business owners and al-Assad obliged him 
with the quick reduction.  Although this particular hasty 
development was positive, Ustun communicated the frustrations of 
doing business with a dictatorship in which rules changes as 
quickly as the wind, with no warning or phased-in introduction. 
 
 
 
--------------------------------------------- -------------- 
---------- 
 
CONVOY REQUIREMENT HAMPERS BUSINESS 
 
--------------------------------------------- -------------- 
----------- 
 
¶4.  (SBU)  Pointing to another vestige of a paranoiac 
totalitarian regime, Ustun said there is a convey requirement 
for Turkish truckers.  That is to say, Turkish trucks are 
allowed through Hatay's two border gates (Cilvegozu and 
Yayladagi) with Syria only in a convoy grouping twice a day - a 
two-hour window in the afternoon followed by a two-hour window 
at night.  This allows the vehicles to be trailed by Syrian 
intelligence for the balance of their business dealings in the 
 
ADANA 00000048  002 OF 002 
 
 
country.  Timing and logistics take on a new importance because 
of this constraint, said Ustun.  Cincin pointed out how 
cumbersome this obligation was and said truckers who miss the 
time window must spend another 18 hours at the gate or waste 
expensive fuel motoring back to their hubs. 
 
 
 
--------------------------------------------- ------------ 
 
THE HATAY-GAZIANTEP SHOW-DOWN 
 
--------------------------------------------- ------------ 
 
¶5.  (SBU)  Since Syria doesn't export much in the way of goods 
(mostly confections to Russian and olive oil to France), Cincin 
said their main challenge is promotion of Hatay province to 
attract Syrian tourists.  Cincin believes Syria's diverse 
populations should be attracted to Antakya with its historical 
convergence of three religions, Judaism, Christianity, and 
Islam.  Their main rival, however, is Gaziantep, a bustling 
commercial hub with the greatest percentage of export goods to 
Syria and the site of the country's only Syrian Consulate. 
Gaziantep vendors also display rugs bearing the visage of 
al-Assad, hoping to appeal to patriotic Syrian tourists.  Cincin 
said his Chamber had recently applied to the Turkish Ministry of 
Transportation for a no-visa system between Hatay province and 
the Syrian cities of Lattakia and Aleppo, akin to the 
arrangement between Trabzon and Batumi, Georgia. 
 
 
 
--------------------------------------------- ----------- 
 
NEIGHBORLY EXCHANGES WARMING 
 
 --------------------------------------------- ---------- 
 
¶6. (SBU)  Over the past year, news reports in southeast Turkish 
media have highlighted the ongoing cultural and business 
exchanges between Turks and Syrians.  The Aleppo symphony comes 
frequently to Turkey, and the Antakya choir has performed there; 
business conferences are held in Gaziantep and Mersin; Syrians 
seek medical treatment in Gaziantep and vacation in the eastern 
Mediterranean.  Recently the Women Entrepreneurs Association of 
Hatay, led by President Yasemin Mistikoglu, sent a group of 54 
Turkish businesswomen to Syria for bilateral talks.  Mistikoglu 
said Turkish and Syrian businesswomen have a lot of experience 
to share because they live in neighboring countries.  Right now 
the dialogue is just starting, she said, but plans are underway 
to hold a Turkish-Syria Women's Business Fair in Ankara in May 
2009 that will focus on textiles and jewelry. 
 
 
 
----------------- 
COMMENT 
 
---------------- 
 
¶7.  (SBU)  Turkish officials and business leaders with whom 
we've spoken are optimistic about the opportunities Syria offers 
in traditional export sectors as well as alternative energy and 
construction.  Conspicuously absent is the guarded, slightly 
condescending and arms-length attitude that infused 
conversations about their southern Arab neighbors only a decade 
ago.  No doubt increasingly positive media portrayals have 
played a role in changing public perceptions, as have personal 
diplomacy initiatives under the AKP government.  But, where 
money is to be made, the spirit of Turkish entrepreneurship will 
closely follow.  END COMMENT. 
GREEN