Remarks at the American Turkish Council's Annual Meeting

(1:30 p.m. EDT)

DEPUTY SECRETARY ZOELLICK: Well, thank you very much, Brent, for such a generous introduction and I want to start by saying I appreciate that such a high-level delegation of Turkish leaders from both the government and the private sector has come to Washington.

Secretary Rice and I have tried to start President Bush's second term by consulting with partners around the world, to listen and to learn, to hear their ideas and to share some of our perspective. And so the Secretary was very pleased that she had the opportunity to visit Turkey during her very first weeks in office. And obviously, shortly — actually in a few minutes — I think she's going to have a chance to meet Foreign Minister Gul, and of course the President will have a chance to Prime Minister Erdogan tomorrow.

So I thank all of you for the invitation to be with you, and particularly my good friend Brent Scowcroft, who suggested that I come join you today. And I know that Ambassador Edelman, a very accomplished colleague who has served both our countries here, as well as Ambassador Logoglu, also a fine representative of Turkey to the United States.

I know you have a very full schedule and time is a little tight, so I thought I'd just share some introductory thoughts and, if we have a chance to take a few questions, I'd be pleased to do so.

I think all of us start by recognizing that the past three years have involved a serious disappointment in the U.S.-Turkish relationship, as well as frustrations and even some confusion, perhaps on both sides. But I hope we can look ahead. Even though I've only been at the State Department for a few months on this tour, I can certainly see that Turkey and the United States should have a sense of shared interests on a number of cutting-edge topics.

So this afternoon, what I thought I would do is just to touch on three.

First, this is a time of extraordinary change in terms of the broader Middle East. When I began at the State Department in February and surveyed the scene from Morocco to Afghanistan, I sensed movements that were in some ways similar to those I encountered when I entered the State Department with Secretary Baker, late in 1988. Mark Twain once said that history doesn't repeat itself, but sometimes it rhymes.

Last October, for the first time in the 5,000-year history of the Afghan people, Afghanistan held a free presidential election with universal suffrage and in September they will elect their new parliament.

In January, the Palestinians had their presidential election. Also in January, over 8 million courageous Iraqis braved killing squads to elect a new government. Last month, the Kuwaiti national assembly granted full political rights to women. And as we have this meeting, Lebanon is in the process of elections to select a new legislature and, in doing so, regain its independence and set a new course and direction.

During my service, as Brent mentioned, the past four years as the U.S. Trade Representative, I saw a huge change in the region's approach to the global economy. When I attended the World Economic Forum meeting in Jordan two years ago, I met with members of an Arab business council and I saw that the outlook had totally changed from the time that I had been in government in President Bush 41's administration.

In the past, many of the business people from the region would have been focused, frankly, on trying to protect their own national markets and trying to resist change. But the group that I now had a chance to meet with two years ago, and I actually saw a few weeks ago again at the World Economic Forum in Jordan, had a whole different attitude. They saw the opportunities but also the competition and the realities and necessities of operating in a global marketplace.

As Brent mentioned, I had this experience with our free trade agenda. We inherited a free trade agreement with Jordan, which we passed through the Congress. We then negotiated one with Morocco, which we passed; Bahrain, which is awaiting action. And this has started a process of rapid change, frankly, beyond what even I had expected, and I tend to be an optimist on these things. Oman and the United Arab Emirates lined up and we started them at the beginning part of this year and, frankly, we're almost done with the Omanis and pretty well along with the UAE.

But perhaps the most striking change was one with Egypt, which obviously plays a very important role in the region. And the best way I can convey this is to relay one of my last experiences as U.S. Trade Representative in December of 2004. I came to Cairo, of a meeting of Egyptians, Israelis and the United States to launch something called the QIZ, the Qualified Industrial Zone project, which with a small amount of Israeli investment allows the goods produced in these zones to come into the United States duty free.

And what most struck after that meeting was the press report that I saw as I was leaving Cairo, where there were two demonstrations in Egypt: one was a small one, a couple hundred intellectuals that were protesting Egypt's relationship with Israel; and one much, much larger, which involved a large number of workers, that were complaining that there weren't enough QIZs for them to be able to participate in.

The President has asked that as part of this overall effort in the broader Middle East that I supervise across the government an effort to try to integrate our political and economic policies in the Broader Middle East and North Africa Initiative, what we call the BMENA initiative. And in doing so, I work very closely with Principal Deputy Assistant Secretary Liz Cheney, who is in charge of the day-to-day coordination and has a dotted line relationship to me.

Now, of course, as we do this, we recognize that each country has unique traditions and cultures and courses of reform. But at the same time, we associate with universal aspirations for liberty, bettering one's family, knowledge, self-government and a true security based on respect for the human rights of others.

Now, of course, if you look at this picture, it's rather striking that Ataturk was the first great modernizer a little bit less than a century ago. And Turkey is a country in the region that has shown a path of democracy in the Muslim world. It has pressed forward with economic and other reforms, especially as Turkey has focused on the process of accession to the European Union.

Yet — and I'll come back to this point — I would suggest that it's important for Turkey's reform orientation to look beyond the European Union to a global context. Now, one dimension of this overall challenge is to integrate modernity and democracy with Islam. I was struck by some comments that then Singapore Prime Minister, now Senior Minister Goh Chok Tong made in an event in New York, where he said, "There's a contest for the soul of Islam." And he made clear that the determination of this contest would, of course, be for the Muslim world.

But others — Singapore, the United States — can help. Well, as I think about this contest, I certainly recognize that Turkey will have a great influence on the course of this debate and it will have partners. For example, about four weeks ago, I was touring Southeast Asia and I had a chance to meet Prime Minister Abdullah Badawi and we talked a little about Islam Hadhari, his effort to try to create a debate about Islam and civilization.

When I was at the World Economic Forum recently in Jordan, I had a chance a talk with King Abdullah of Jordan about his efforts of this. President Yudhoyono of Indonesia, again, we had a good conversation when I visited Jakarta and again recently in the United States. And I shared all this on a couple of trips that I've made to Iraq with the newly elected leaders of Iraq as well.

So I'm very pleased that as part of this larger process, that Turkey will co-chair a democracy assistance dialogue in concert with the G-8 countries. I'm particularly pleased that as part of its overall effort, Turkey will host a conference in Istanbul later this month on the role of women in society and politics.

So if you take this interest and step back and consider our mutual interests, both want to support others in moving towards political and economic reforms. I think we and others believe we can learn from Turkey's experience in its ongoing challenges. And the United States certainly wants to offer encouragement and help so that Turkey succeeds.

Second, a word on Iraq. As I have alluded to, I visited Iraq twice in this new post. And as I left — you know, sometimes when you pull back from your daily discussions and you just reflect on a general impression, as a helicopter was flying out I was left with a sense that this is a country of actual extraordinary wealth. The people that I met, many of whom represent a diaspora that is coming home, extremely educated, extremely thoughtful, there's a tremendous amount of talent in that country. As you fly over and you look at the buildings and the structures, you realize Iraq's potential in terms of its development, particularly compared to other developing countries, and even as you sort of look at the overall territory and have a sense of the agricultural potential of Iraq.

But you can also see the effects of a society in a country that has been pulverized by a cruel dictatorship over two decades. My sense is that the new Iraqi leadership — and I've had a chance to meet a number of officials and people, parliamentary ones in the governments, all the different groups — it's a very impressive group.

Now, building a democracy during the course of an insurgency is no easy task. And of course, as you read in regular daily reports, there are some very tough debates and some very shrewd maneuvering. But my sense, and I think this is a pretty important one, at least for me, is that the participants are not talking past each other. They're working very hard on some very important issues. Because I have been in other developing countries where I do feel as a democracy people are talking past one another and, and as you leave, you have a slightly unsettled sense. That's not the feeling I get in the course of Iraq.

Now, the key to building a new Iraq and to defeating the insurgency is to successfully integrate progress on three dimensions: one, political; second, economic and reconstruction; and the third, military. And it's interesting, I referred to my trip in Southeast Asia; when I was with Abdullah Badawi of Malaysia, I talked with him about the Malayan Emergency process, a very long insurgency. And again, (inaudible) shared this view that military means will not succeed alone in defeating an insurgency; the challenge is integrating the political, the economic and the military in a concerted effort.

Now, my work in Iraq has focused most on the political and economic reconstruction dimensions. And on the political side, at least it's my sense that as Iraqis take charge of their own future, they will be sucking the insurgency by sucking the oxygen away from the insurgency, whether that insurgency is drawn from jihadists or Baathist killers. That's why the progress on the election, the progress in building a representative government that is also inclusive, and now the effort to try to turn towards creating a constitutional commission, working towards the constitution, then the referendum and the new elections, are vital in terms of the overall strategy of building the country and defeating the insurgency.

And therefore, it's not surprising at all to me to see that the insurgents are very hard in trying to target and derail this process by trying to develop splits within the Iraqi community, trying to pit one group against another. But my sense is that you have more stronger and more numerous Iraqi forces that are serving an Iraqi government, this will also strengthen the ties with the Iraqi people. And we've seen this in terms of the information flow.

Now, on the economic and reconstruction side, I've been trying to target some of our energies on topics that I think are most critical for public support and building the country. Areas like electricity, clean water, agriculture, developing jobs through the private sector. But it's also clear to me that Iraqis will look to their neighbors for support. On my last visit to Iraq, it was a very coincidental, I was with Prime Minister Jafari just as he was leaving to go on his first foreign visit to Turkey, which was a sign, I think, of both his respect and his interest in cooperation.

So here, too, there's an area where Turkey and the United States, I believe, have shared interests because we will both benefit from a secure, democratic Iraq with a growing economy which can contribute positively to regional security. This Iraq will be a unitary state, probably with a measure of federalism, and it can be a partner for a modernizing Turkey in a modern — building a modern Muslim community.

Turkey, of course, is in a position to help build a good neighbor for the future by working with Iraq on issues like oil exports or electricity, expanding trade, especially we hope by opening a second border crossing. And I think in doing so, Turkey can also be a constructive leader in the region. For example, others in the neighborhood, for example Syria, are going to need to recognize that fostering danger with Iraq today is going to rebound to hurt Syria for the long term because Iraq is on the path up and it will remember those that worked with it and that are partners and those that tried to stop it.

Now, I recognize, of course, that Turkey and the United States had some very serious differences over Iraq, but Turkey wasn't the only country in that category and others are coming together now behind a sovereign, democratic Iraq. The European Union and the United States, I think a total of some 80 countries, will be supporting a conference later this month in Brussels to help give both political and overall economic support to a new democratic Iraq. When I was in Malaysia and Indonesia I found a very strong interest in the leaders of those countries of reaching out to this new Iraq. So I hope this is an area where Turkey and the United States can look ahead together.

Third, Turkey and the United States have had a long interest in the developments across the broader Eurasian region and I think we still do. Brent mentioned our work together in 1989 where events started a new course to unify the European space. Of course, that process of integration, with its inevitable twists and turns, is still going to find its way. There have been some positive developments recently, for example in Ukraine and Georgia. There have been difficulties in Russia and there have been challenges that will be ahead of us in the Balkans. Turkey's influence is very important as it extends through Central Asia. It played a very important role with NATO in Afghanistan.

Now, one of the twists of the integration process within Eurasia is the recent votes that we've seen in the European Union's constitution process. I think it's going to take some time for the Europeans to sort through this themselves and reflect on where they go from here and the implications. But you should know that the United States has long stood with Turkey in encouraging its accession and we've certainly recognized the relation of that to the overall reform process, internal as well as external, and we'll continue to stand with Turkey on this topic.

But at the same time, I'd suggest that it's important that our bilateral ties not be too constrained by the effort at EU accession and at times over the past few years I've sensed that they might have been. Now, the European Union is clearly important to Turkey's future, but so are the countries of the broader Middle East. And considering the world in which I've operated over the past four years, that of the international economy, it's important for Turkey to recognize that it will be operating in a global environment.

My own feeling is that as we look 5, 10, 15 years ahead and look towards the major sources of global growth, it will continue to be the United States and the developed world, Europe and Japan I think for demographics and other regions are of course going to remain important but they may not have the same role that they did 15 or 20 years ago. And increasingly, the challenge will be the role of China, of India, of Southeast Asia in this process.

So at least my suggestion is that as Turkey moves forward, obviously it wants to have good relations with Europe and the United States, but it needs to have a 360-degree perspective. Take, for example, our work together on the Bakku-Ceyhan pipeline to bring Caspian oil to international markets. This is something that many believed couldn't get done, but we made it happen. But one also needs to look beyond the natural resource industries. For example, you know, according to World Bank statistics in developing countries as well as developed, the service sector is now over 50 percent of a country's economy. In the United States it's about 66 percent of GDP, about 80 percent of our employment. When I look at Turkey's economy and look at the potential, I think Turkey could be a major service provider in the region in competition with others.

So my hope is that as Turkey looks to its own future that the connections that it has with Europe, which are very important, need to be complemented by a global perspective, and that's where I think the partnership with the United States becomes particularly valuable because I've seen in my various tours in the U.S. Government, certainly saw it over the past four years, that the United States is still a unique country in terms of its global reach around the world and the insights and the relationships one builds, I hope, can be relevant to our partners as well.

It's certainly going to be the case in the area of security, where I think Turkey and the United States also need to look beyond to the broader Middle East, Central Asia, perhaps even to problems like I was dealing with just last weekend, where we've had terrible tragedies in Sudan and Darfur and where we're trying to bring together different aspects of the international community. Well, maybe this is another area where we can cooperate.

So as I step back from these three examples, I hope I've at least given you my sense that Turkey and the United States should have a very full agenda on political, economic and security topics. In most of the cases, at least as I survey them, we have pretty much shared interests. Now, of course, we're going to bring different histories, different perspectives and concerns, and as two democracies we each have domestic political challenges that we have to manage as well. But in my view, these are regions that we should discuss together, not retreat from one another.

So I want to thank all of you for coming and for encouraging those discussions. Thank you.

(Applause.)

DEPUTY SECRETARY ZOELLICK: I have a 2:30 appointment back at the State Department but I've got five minutes if we want to have a couple questions. It's up to you.

QUESTION: Mr. Secretary, the issue of the —

DEPUTY SECRETARY ZOELLICK: Could you give your name and —

QUESTION: (Inaudible.) Is the issue of qualified industrial zones dead with Turkey or can that be resurrected? Thank you.

DEPUTY SECRETARY ZOELLICK: Sure. What my recollection — and you spoke very loudly, thank you, but the question was the role of the qualified industrial zones with Turkey and is it dead or whether it could be resurrected.

In President Bush's first term, we suggested this as an approach to try to help with Turkey's development and at least the sense that I got was there was not as strong of interest on the Turkish side. Now, what we said in doing that — and this, frankly, reflects, the sensitivities that we need to deal with on some of the trade issues — was that we would include all the products other than textiles and apparel. And if you look at the exporter profile, obviously Turkey does a lot in textile and apparel.

But I'll tell you why I was a little disappointed that Turkey didn't pick up on this. If you look at the end of the textile quotas around the world, it's going to be a very competitive market, and what I've tried to urge a number of developing countries to focus on is areas beyond textile and apparel where they can become part of a global sourcing network. And I think this will become increasingly important for Turkey.

So at least from my perspective, the item remains an open one, but I now have to defer on some of these elements since we do have a new Trade Representative. But in a sense, if we could just connect this to what I was trying to say, in looking at Turkey's economic development, look at what a QIZ would give you. It would basically give you a free trade zone for a whole series of products to connect into the United States and in terms of whether information technology or componentry of different parts of manufacturing, and my sense is that would be an advantage to have in one's development.

Another question? I don't see any, but if anybody speaks up.

Well, I want to thank all of you again. I know that as I took a look at the list of attendees, it's a very impressive group and I appreciate you taking the time to come to Washington and engage in this. So want to thank you and thanks, Brent, for inviting me.

(Applause.)
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