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Trading Favors

WASHINGTON — In the nation’s capital, it’s time to talk Turkey.<br><br>The U.S. is looking to that nation, which is Iraq’s northwestern neighbor, for assistance in the event of a war — primarily, the U.S. wants to use it...

WASHINGTON — In the nation’s capital, it’s time to talk Turkey.

This story first appeared in the February 11, 2003 issue of WWD.  Subscribe Today.

The U.S. is looking to that nation, which is Iraq’s northwestern neighbor, for assistance in the event of a war — primarily, the U.S. wants to use it as a base for infantry and mechanized troops.

The Turks want to know what’s in it for them and one of the key things they’re asking for is preferred access to the U.S. market.

Turkish officials have held several high-level discussions with U.S. Treasury and State Department officials in the past couple of months to secure economic aid in the event of a war in neighboring Iraq. Talks on the U.S. assistance and the extent of Turkish support are ongoing.

Turkish trade associations have also been lobbying Capitol Hill lawmakers for a “temporary special trade status,” which would give its exports to the U.S., including apparel and textiles, duty-free and quota-free status for five years.

“All we need if we are going to cooperate as strong long-term allies, or strategic partners, is for the U.S. to open its markets more and allow us to sell our goods there,” said Ziya Sukun, executive director of Turkish apparel group ITKIB Association Inc. and representative of the Turkish Exporters Assembly of Istanbul.

However, only Congress can approve changes in tariffs, and it is not clear that the legislature is inclined to do so. If the U.S. agrees to extend aid to Turkey in the apparel and textile sector, it is more likely to offer quota increases, which the administration has the authority to change without Congressional approval.

It isn’t the first time a potential wartime ally has requested trade concessions. Pakistan asked for and received increases in apparel and textile quotas in exchange for its alliances in the war on Al Qaeda and the Taliban in Afghanistan.

Turkey has also been the recipient of additional trade breaks from the U.S. in exchange for its help in enforcing the economic embargo against Iraq.

Turkey says its economy has lost billions of dollars since the 1991 Gulf War. Its southeastern neighbor, Iraq, was a major trade partner before that conflict, but had U.N. sanctions imposed on it for invading Kuwait in 1990.

Although there was no direct impact on the apparel and textile sector, former President Bush agreed to double Turkey’s quotas over three years in 1991, according to Donald Foote, director, agreements division of Commerce’s Office of Textiles and Apparel.

Foote said trade packages of this kind are rare and noted that his office has not been instructed to develop any new packages for Turkey this year. He also noted that the decision is a political one that is made by the President.

In the case of Pakistan, the U.S. granted concessions because it was a major ally in war on terrorism as well as a major textile supplier, said Foote. “Other countries asked us,” he said, “but no others fit both of those circumstances.”

But Turkey might fit the criteria in the event of a war. The ITKIB’s Sukun said Turkey started its campaign for a special trade status in June 2002 and has some backing from Rep. Cliff Stearns (R., Fla.) as well as Rep. Robert Wexler (D., Fla.).

However, the domestic textile industry has lobbied against handing out more apparel or textile breaks and that has thwarted Turkey’s efforts, according to Sukun. He said Turkey exports about $32 billion in goods a year, of which textiles accounts for $9 billion.

Turkey is not the only major apparel exporter in the region — Iraq’s fellow neighbor Jordan is also an apparel producer, as are other Mideastern countries, including Israel and Egypt. Importers suggested that Turkey, which has the largest apparel and textile exports in the region, has the most to lose.

“They have the most quota on pants and knit tops and they could really use some relief,” said Julia Hughes, vice president of international trade at the U.S. Association of Importers of Textiles and Apparel.”

Giving apparel and textile trade relief to Turkey doesn’t sit well with Charles Bremer, vice president of international trade at the American Textile Manufacturers Institute.

“The economic impact on the American people will be far greater than on the Turks,” Bremer said. “If you suffer some economic impact because you are trading with a madman don’t come to us with your problems.”