TURKEY HITS US BUSINESS AFTER ‘GENOCIDE’ VOTE
By Delphine Strauss in Ankara

Financial Times
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March 24 2010
UK

Turkey has frozen its efforts to strengthen defence, energy and trade
ties with the US after a congressional panel labelled the Ottoman-era
killing of Armenians as "genocide", according to the country’s minister
for foreign trade.

Zafer Caglayan, who cancelled two trips to the US in February and
this month, said: "All steps taken so far are at a halt."

The freeze on new economic initiatives with the US stands in sharp
contrast to Turkey’s rapidly developing ties with its neighbours to
the north and east, where it is pursuing closer integration as part
of a policy of greater regional engagement.

Washington has long viewed Turkey as a key strategic ally and an
important partner on energy matters and in Afghanistan and Iraq.

However, trade between the two countries is dominated by US arms and
aerospace sales to Turkey – an imbalance that Ankara had hoped to
correct. Mr Caglayan had been charged with developing economic ties
in the "model partnership" proposed by Barack Obama, US president.

"We were hoping that beneficial steps could be taken . . . in the
context of this model partnership," Mr Caglayan told the Financial
Times.

The American-Turkish Council, the US organisation that promotes
commercial, defence and cultural relations, has postponed its annual
conference because Ankara had advised public and private businesses
that its policy was to curtail official visits because of the
congressional vote.

That announcement came after Turkey this month made its strongest
assertion yet of economic independence from the west by cancelling
talks on a new loan from the International Monetary Fund.

The Ankara government said it could "stand on its own feet", after some
50 years as one of the IMF’s most assiduous and crisis-prone clients.

Writing in Hurriyet Daily News, the columnist Semih Idiz noted:
"Turkey . . . has started to act more freely from its traditional
allies and partners, and is veering toward other parts of the world
in search of new partners." He described the latest events as a
"visible expression of Turkey’s desire to be an independent actor
free of western encumbrances".

Ankara is also forging links with other emerging economies. Taner
Yildiz, energy minister, this month signed a deal paving the way for
South Korea’s state power company to build a nuclear plant on the
Black Sea coast, bypassing the option of an open tender.

Talks with Russia over a nuclear plant are already under way. The
day after the US "genocide" vote, Turkish diplomats flew to Moscow
to discuss the nuclear project and an intricate web of pipeline deals.

Dmitry Medvedev, Russian president, is due to visit Turkey in May.

This was a "signal" that "Turkey could, if an unwanted scenario
em-erged, strengthen its ties with Russia", said Sinan Ulgen, head
of the Edam think-tank in Istanbul.

On the ties with Russia, Mr Caglayan said: "Turkey and Russia are
strategically close counterparts and two countries that are willing
to increase economic and commercial ties.

"I’d like to emphasise this fact that Turkey and Russia are very
sincere in their relations."

Turkey’s new economic partnerships and broadening diplomatic horizons
will not necessarily weaken its traditional alignment with the west.

Thanks to proximity and the customs union with the European Union,
Europe remains Turkey’s most important market, receiving about 60
per cent of its exports.

On energy, the strategy is to keep all options open – joining
western-sponsored projects, such as the Nabucco pipeline aimed at
bringing Caspian and Iraqi gas to the EU, as well as Russian-backed
proposals.

But many in Washington assume Turkey will abstain from supporting
more sanctions on Iran in the United Nations Security Council, where
it holds a non-permanent seat.

Philip Gordon, one of the US administration’s strongest proponents
of ties with Turkey, said last week that Ankara should not pursue its
aim of "zero problems" with neighbours "uncritically or at any price".

Mehmet Ali Birand, a Turkish political commentator, has pointed
out that US-Turkish trade amounted to about $15bn in 2008, with
Turkish-Russian trade totalling more than treble that amount.

He questioned which partnership would prove more persistent. "Is it
the one on paper with the slogan ‘strategic partnership’, progressively
becoming irrelevant, or the one amounting to $50bn-$100bn?"