Remarks of Franklin L. Lavin
Under Secretary of Commerce
for International Trade
American - Turkish Council Annual Conference
March 28, 2006
Opening Remarks
Thank you Minister Tuzmen (Tooz-men) for that kind introduction.
Ambassador Holmes, Mrs. Holmes, Minister Tuzmen, Ambassador Sensoy (Shen-soy),
Mrs. Sensoy, distinguished colleagues
..
Let me thank the American-Turkish Council, the American Friends of Turkey,
and the Turkish-US Business Council for inviting me to be with you tonight.
{RECOGNIZE DAVID SPOONER AND SHAWN DONNELY}
I am pleased to have this opportunity to share my thoughts on how we
can strengthen our bilateral commercial and economic relations. Tonight,
let me offer some general thoughts on the relationship, highlight the
good news in our growing trade and investment ties, and also identify
issues for continuing progress.
First, I would like to convey the strong regard and feelings of friendship
that America holds for Turkey. We are long-time allies and partners in
the defense of freedom and the promotion of modern democratic values.
Americans and Turks have fought together and died together in that cause
and we will continue to stand together side-by-side in the future.
That is not to say we have always agreed, as in the case of Iraq in 2003.
But there are fundamental strengths in the relationship that will allow
us to see through these differences. At base, both Turkey and the United
States, as strong NATO allies, share a commitment to fighting the war
on terror and and rebuilding Afghanistan and Iraq. We are grateful for
the efforts of Turkey to build international support for Iraq and we look
forward to Turkey's continued engagement in Iraq's success as a stable,
peaceful democracy in the neighborhood.
Now, let me turn to the good news in the economic relationship. Turkey's
economic reform program has brought impressive results in recent years.
Turkish GDP growth has averaged almost 8% since 2002, one of the highest
growth rates in the world. The challenge for Turkey in the coming years
will be to keep reform on track, to keep liberalizing the economy, deregulating,
privatizing, and allowing for more competition, more business growth and
start-ups. In the last year alone, Turkey sold a 55% stake in the landline
monopoly Turk Telecom, 51% of oil refiner TUPRAS, and 46% of the leading
iron and steel company Erdimir. Possible privatizations for 2006 include
Turkish Airlines, cigarette factories, the National Lottery, and power
distribution companies.
This is all good news but, as Minister Tuzmen knows, it is almost a permanent
struggle between those who favor economic growth and greater prosperity
and those who are satisfied with a business-as-usual approach to government's
role in the economy.
The good news in Turkey's economy is reflected in the good news in the
commercial relationship with the United States. Trade between our countries
has doubled in the last decade and is up by over 40% since 2003. In 2005,
the United States - Turkish trade increased by about 14% from 2004 with
total trade equaling almost $10 billion.
{RECOGNIZE JOHN LANCIA, SCO in ANKARA and MR. SASMAZ}
I don't want to dampen the positive mood this evening but with all the
good news, we should take note that we still have some challenges as well.
Our trade and investment figures do not yet reflect the potential that
our bilateral commercial relations hold. There is still room for growth.
Turkey's stable, democratic and modern society should be highly attractive
to U.S. business. Turkish demographics present a growing young and affluent
population desirous of the best products and services. And for their part,
Turkish firms are increasingly successful and capable in the international
market place, dominating several sectors across the mid-east and Europe.
In 2005, Turkey took in a record $9.6 billion of foreign direct investment,
nearly 20% of which came from the U.S. U.S. FDI in Turkey nearly doubled
last year from about $2 billion to $4 billion. That's quite impressive
but it could be even greater. Think about Poland and Hungary. In Poland,
U.S. companies have invested more than $8 billion and in Hungary, U.S.
investment totals close to $9 billion.
In relation to trade, although trade between our two countries grew strongly
to $9.5 billion, consider that U.S. trade with Malaysia is $44 billion.
Our trade with Thailand is $27 billion in 2005. With the Philippines,
it is $16 billion. Clearly, there is a lot of room for growth.
{JOHN LANCIA AND MR. SASMAZ}
Turkey is well positioned to take advantage of some of the more important
economic trends unfolding in the region. Turkey's location is an attractive
"lillypad" for hopping off to the emerging markets in Central
Asia and the Caspian Basin and to an economically resurgent Iraq. Its
historic role as a bridge to Europe has been locked in through its membership
in the EU Customs Union. With all of these factors, Turkey offers American
businesses a natural base for increased trade and commercial operations.
Indeed, Turkey has recognized the potential that increased trade with
the United States offers. Minister Tuzmen, I applaud Turkey's "Year
of the Americas" strategy in promoting greater linkages with the
United States and other countries in the Western Hemisphere. Turkey has
identified six U.S. states - New York, California, Texas, Illinois, Florida,
and Georgia - that offer significant opportunities for increased trade
and investment.
Improving business promotion is just what we need, but it cannot be fully
successful unless we are also improving the business climate. Let me touch
on a few issues. Copyright piracy and trademark counterfeiting are highly
problematic in the publishing, optical media, apparel and cosmetics businesses.
Also, complicated legal and administrative procedures, accompanied by
frequent, sometimes unclear changes in the legal and regulatory environment
inhibit business growth.
I am pleased that the Turkish government passed legislation last year
expanding protection for pharmaceutical test data. However, it appears
that the legislation does not provide adequate protection as is required
under the WTO TRIPs Agreement.
By resolving problems in these areas, building a vibrant IPR regime,
and removing market access barriers that impede competition, Turkey will
improve its investment climate and serve notice that it is a secure location
to invest. This is critical to the promotion of a creative, technologically
advanced economy that allows the best products and services to be available
to its people.
Countries compete hard to attract foreign investment. Those countries
that successfully meet this challenge are those that create a hospitable
environment. Successful markets are open, transparent, protect the interests
and property of foreign companies, and do not change the rules of the
game after investments have been made and facilities built. They create
a degree of certainty that investors find comforting.
Let me offer a further thought about trade and commerce. We should always
remember that prosperity is a means as well as an end. Our nations all
seek a better material life, and we also know that a stronger economy
and vital commercial trade flows will give us the means to tackle the
other problems we face. In essence, trade is about creating opportunities,
building better societies, and eliminating poverty.
I close with the words of Ataturk, "National sovereignty should
be supported by financial independence. The only power that will propel
us to this goal is the economy. No matter how mighty they are, political
and military victories cannot endure unless they are crowned by economic
triumphs."
I know that through collaboration and cooperation and a shared vision
for a more vibrant economic relationship between our countries, we can
dedicate ourselves to the economic steps necessary for achieving long
term shared economic triumphs.
The United States and Turkey have a great relationship and good economic
news to celebrate. We have some commercial issues to address but the stars
are aligned for good progress. I look forward to working with Minister
Tuzmen to build upon our success.
Thank you.