Memorandum from the Foreign and Commonwealth
Office
UK-TURKEY RELATIONS
1. The Foreign and Commonwealth Office responds
to a request from the House of Commons Foreign Affairs Select
Committee for a memorandum in connection with the Committee's
inquiry into the United Kingdom's relations with Turkey, including
reference to European defence structures and Turkey's prospects
for accession to the European Union.
2. The memorandum is in ten sections, opening
with the Government's objectives in developing UK/Turkey relations
and then summarising certain key issues. Four annexes detail the
UK diplomatic presence in Turkey; visa operations; chronology
of Turkey's EU candidature and UK/Turkey trade figures.
INTRODUCTION
3. Turkey is a Parliamentary republic. President
Sezer took office in May 2000. The present three-party coalition
government, led by Prime Minister Bulent Ecevit of the Democratic
Left Party (DSP), has been in office since 1999. Elections are
due in 2004.
4. Turkey is a country of great importance
to the UK as a NATO ally and candidate for EU membership, with
whom we have close commercial and other relations. The significance
of Turkey's geographical position (bordering the Balkans, the
Southern Caucasus and the Near East) has been underlined by the
events since 11 September. Turkey has played a full part in the
international coalition against terrorism, offering a range of
support and assistance. The Government welcomes Turkey's offer
to succeed the UK as lead nation for the International Security
Assistance Force in Kabul later this year. The Foreign Secretary
visited Ankara in October 2001 and has held talks with the Turkish
Foreign Minister in the margins of several international meetings
since then.
UK/TURKEY RELATIONS
5. In developing the UK/Turkey relationship,
the Government seeks to:
— work closely with Turkey as a NATO
ally to achieve shared foreign and security policy objectives;
— ensure Turkey (and other non-EU European
allies) have the fullest possible opportunity to be involved in
EU-led crisis management operations as part of European Security
and Defence Policy (ESDP);
— encourage Turkey's progress towards
meeting the Copenhagen political and economic criteria (including
on human rights) as a necessary condition before EU accession
negotiations can be opened;
— work with Turkey to strengthen the
search by the parties in Cyprus for a comprehensive and durable
settlement;
— support, through the IMF, economic
recovery in Turkey, and the development of a stable market economy;
and encourage improvements in the legislative and regulatory framework
which promotes and protects investment in Turkey;
— co-operate with Turkish law enforcement
agencies to combat international crime, particularly the flow
of drugs/illegal immigrants through Turkey to the UK;
— co-operate with Turkey over Operation
Northern Watch in northern Iraq;
— build a healthy UK/Turkey trading
relationship, providing opportunities for British business and
investment.
The official resources deployed to promote UK
interests and achieve these objectives are outlined in Annex A.
6. The UK provided £1.6 million in
bilateral project support to Turkey in 2001-02. This covered a
range of projects under the UK/Turkey Action Plan designed to
help Turkey prepare for EU membership and projects dealing with
the environment; tackling the drugs menace; encouraging the development
of civil society (including respect for human rights). This figure
also includes funds supporting a thriving Chevening scholarship
programme. The EU disburses approximately 177 million Euro annually
in Turkey, to which Britain contributes its normal, substantial
share.
ISSUES
European Defence
7. The Government welcomes the participation
of Turkey and the other five non-EU European allies in EU-led
crisis management. The six benefit from the Nice European Council
arrangements, which enable them to be consulted about and involved
in the European Security and Defence Policy (see Annex VI of the
Presidency Report to the Nice European Council in December 2000).
8. Following Nice, Turkey raised a number
of questions about how these arrangements would be implemented,
and concerns that ESDP might be used in Turkey's geographical
area, or in circumstances where Turkey judged her national interests
were at stake, without Turkey having the right to participate
in EU decisions. Until these were satisfied, Turkey was unwilling
to agree to arrangements offered by NATO in the Washington NATO
summit conclusions of April 1999 (known as "Berlin Plus"),
which would, inter alia, allow the EU assured access to NATO operational
planning, and presumed access to NATO assets and capabilities.
9. Over the course of 2001, the UK and Turkey,
assisted by the US, negotiated a technical text clarifying the
implementation of the Nice arrangements. On 2 December the Turkish
Government agreed the text. EU Member States are now considering
the text. Most have already indicated that they can support it.
We hope to see its adoption in the next few months, followed by
the adoption in NATO of Berlin Plus. This would strengthen the
links between the EU and NATO on military crisis management.
10. Improving the military capabilities
available for EU-led crisis management operations remains a high
priority. Turkey has made welcome and generous contributions to
the EU's military target—the Helsinki Headline Goal—and
attended the Military Capabilities Improvement Conference as well
as the Police Capabilities Conference in November 2001.
EU Accession
11. The Helsinki European Council in December
1999 confirmed Turkey as a candidate to join the EU on the same
basis as all other candidates and set out a pre-accession strategy
which aims to help Turkey meet criteria for membership set out
at the Copenhagen European Council in 1993. The pre-Accession
strategy includes an Accession Partnership; enhanced political
dialogue, and preparations for screening.
(i) The Accession Partnership
12. The EU's Accession Partnership (AP)
with Turkey sets out in a single framework the priority areas
for further work needed for Turkey to meet the criteria for accession,
the financial means available to help implement these priorities,
and the conditions applying to that assistance. Turkey has in
turn reflected these priorities in their National Programme for
the Adoption of the Acquis (NPAA) of March 2001.
13. In December 2001, the EU formally adopted
the last two elements of the pre-accession strategy agreed at
Helsinki: Turkish participation in Community programmes and agencies
on the same basis as other candidates; and a single financial
framework for assistance to Turkey, with funds focused on Accession
Partnership priorities.
(ii) Enhanced political dialogue
14. Discussions are held at Ministerial
level in the EC-Turkey Association Council; at senior official
level in the Association Committee; and in regular meetings of
Turkish and EU Political Directors.
(iii) Preparations for screening
15. The Commission's 2001 Regular Report
proposed a detailed and in-depth comparison of Turkey's legislation
with the EU acquis. The combination of the Accession Partnership
and enhanced political dialogue and are helping to bring closer
the prospect of full screening of Turkey's legislation compared
with the acquis.
16. The Commission's 2001 report, published
in November, concluded that Turkey had not yet met the Copenhagen
political or economic criteria (all candidate countries must meet
at least the political criteria before accession negotiations
can begin.) The constitutional reforms adopted in October 2001
are a positive step towards meeting the political criteria. Progress
towards meeting the economic criteria had been hindered by economic
crises in late 2000 and February 2001.
17. The UK has consistently supported Turkey's
candidacy for EU membership and the pre-accession strategy agreed
for Turkey at the Helsinki European Council, both in discussions
with EU partners, and through practical advice and assistance.
We welcome the constitutional reforms Turkey adopted in October
2001 and look forward to the implementation of these reforms,
and to additional reforms to meet the Accession Partnership short-term
priorities on the political criteria in full. Through our own
"EU-Turkey Action Plan", and through support for the
EU's pre-accession strategy, we will continue to assist Turkey's
efforts in this regard.
18. We welcome the Commission's proposal
in its latest progress report for a detailed programme of legislative
scrutiny. We believe this will take forward Turkey's candidacy
in a concrete, practical way.
19. We welcome the conclusions of the Laeken
European Council, which acknowledged Turkey's progress towards
meeting the political criteria and noted that "this has brought
forward the prospect of the opening of accession negotiations
with Turkey."
Cyprus
20. The current UN process, aimed at securing
a comprehensive settlement to the Cyprus problem, began in December
1999. Following five meetings in proximity format in 2000, in
November the Turkish Cypriot leader Mr Rauf Denktash withdrew
from the talks and said that he saw no point in negotiating until
the reality of two States was accepted, although he made it clear
that he still supported the UN Secretary General's Good Offices
Mission. The UN, with strong support from the UK and US, said
that any talks must be based on Security Council Resolution 1250
(no preconditions; all issues on the table; commitment in good
faith to continue to negotiate until a settlement is reached;
full consideration of relevant UN resolutions and treaties).
21. In November 2001 Mr Denktash invited
President Clerides to meet face to face on the island. President
Clerides accepted, while insisting on a UN presence. The two leaders
met on 4 December and agreed to start face-to-face talks, again
on the island, with no preconditions, under UN auspices in mid-January
2002 to run until at least June. Alvaro De Soto, (UN Secretary
General's Special Adviser on Cyprus) described the leaders' first
such meeting on 16 January as an encouraging start. President
Clerides and Mr Denktash have agreed to meet three times a week.
22. Cyprus is a leading candidate for accession
to the EU. Turkey has questioned the legality of Cyprus' application,
but we are satisfied that there are no legal obstacles to that
application. The UK strongly believes that it is in the best interests
of all concerned that a reunited Cyprus should join the EU, but
supports the conclusions of the Helsinki European Council, which
stated that a settlement is not a precondition for Cypriot accession.
We welcome recent assurances by the Commission and the General
Affairs Council, endorsed by the Laeken European Council, that
the provisions of a UN settlement can be accommodated within the
terms of Cyprus' EU accession.
23. Lord Hannay is the UK Special Representative
for Cyprus. Since his appointment in 1996 he has worked to support
UN efforts to achieve a settlement. Lord Hannay is in close contact
with all the parties and others involved such as the United States,
the European Commission and the Special Representatives of other
states.
Human Rights
24. The Government believes that the formal
recognition of Turkey as an EU candidate at Helsinki in 1999 has
led to some improvement in human rights in the country; for example,
priorities under the NPAA (see paragraph 12 above) include improving
prison conditions to meet international norms, and measures to
eradicate torture. However, there are still areas of concern,
and the Embassy in Ankara and the Consulate General in Istanbul
monitor human rights issues closely. We support a large number
of human rights projects. Examples from 2001 include:
— Translation into Turkish of the FCO
Handbook on Prevention of Torture.
— A training programme for Senior Prison
Administrators in Turkey.
— Independent monitoring of prisons
in Turkey.
— Development of Prisoner Education
and Recreation Programmes.
— Training for the Jandarma (military
police) in Custody, Detention and Public Order Policing.
— Forensic Science Training for the
Jandarma.
25. This year will see the launch of a Human
Rights Dialogue at senior official level between the UK and Turkey.
Progress in reform continues to be monitored closely by the UK
and EU.
Economy
26. Sustainable economic growth and development
are prerequisites for further Turkish integration in the global
economy. The UK continues firmly to support IMF-backed efforts
to implement economic and structural reforms in Turkey.
27. Throughout the 1990s, Turkey experienced
high inflation, budget deficits and a depreciating currency. In
December 1999, the Turkish Government signed an agreement with
the IMF, tied to a Stand-By Arrangement loan of $3.7 billion,
to implement a macroeconomic stabilisation programme, and begin
the process of structural reforms. Under the agreement, the Turkish
lira was pegged to the US dollar. Economic growth through most
of 2000 was high, whilst inflation fell sharply.
28. However, in November 2000, a sudden
decline in interbank lending and resultant liquidity squeeze prompted
central bank action. But the crisis only abated after the IMF
intervened with a $7.5 billion loan under its Supplementary Reserve
Facility, and the Government reaffirmed its commitment to economic
reforms.
29. A further crisis in February 2001 led
the government formally to abandon the lira/US dollar peg (a core
element of the IMF programme). The lira immediately fell by 30
per cent and continued to slide to the point where it has lost
half its year-on-year value.
30. The Government appointed a new economic
team led by Mr Kemal Dervis as Finance Minister, and announced
its intention to negotiate a new economic plan with the IMF. Agreement
was reached in May. The IMF agreed to provide an additional $8
billion under a Stand-By Arrangement. The authorities committed
themselves to a wide range of structural reforms, including liberalisation
measures, banking sector consolidation and privatisation of large
state entities, a tight monetary policy, and further fiscal stringency.
31. A number of reforms have been implemented,
including a law to make the central bank independent and the forced
closure of insolvent banks. However, more needs to be done. Meanwhile,
inflation has risen following the depreciation of the lira, output
has fallen, and interest rates have risen to punitive levels,
putting heavy pressure on Government finances and the country's
public debt burden.
32. In the aftermath of the 11 September
attacks on the United States, Turkey's financial position deteriorated
further, and the IMF has now agreed in principle to provide an
additional $10 billion in support in 2002. It is hoped that growth
will return in 2002; that inflation will fall; and that debt sustainability
will be assured. Recent economic data suggests that the economy
may have bottomed out.
Drugs/Illegal Immigration
33. Opium poppy is produced legally in Turkey
under the supervision and guidance of the International Narcotics
Control Board, and there is no evidence of leakage from the licit
to the illicit market. Turkey has the lowest per capita opiate
abuse rate in Europe. However, Turkey is a key heroin transit
and processing country on the supply route from Afghanistan to
Western Europe: the vast majority of heroin used in the UK transits
Turkey. Individual Turks and Kurds, and gangs of them, are heavily
involved in the heroin trade in the UK and other western European
countries. We are working with the Turkish Government to increase
awareness and to improve co-operation in combating this damaging
trade.
34. Our missions in Turkey continue to develop
links with all the local law enforcement agencies (LEAs). Record
seizures of heroin (5.2 tonnes) in 2000—much higher than
any seizure rates in western European countries—reflect
these agencies' efforts. UK-Turkish counter-drugs co-operation
has made a contribution to these seizures.
35. Between 1994 and 1999, the UK funded
£600,000 of bilateral counter-drugs assistance. We expect
to provide a further £300,000 of training and equipment during
2000-01. We are also considering a contribution of £500,000,
through the United Nations Drug Control Programme, to programmes
at the Turkish Academy Against Drugs and Organised Crime.
36. Two other aspects of international crime
in Turkey are important to the UK: people smuggling and money
laundering. Many of those illegal immigrants not intercepted in
Turkey make their way to western Europe and some to the UK, aided
by local people-smuggling groups with links to south east Europe.
The UK is considering assistance in the form of training and detection
equipment. Money laundering is an adjunct to the drugs trade and
drug-related money flows to and from Turkey are considerable.
We believe that existing anti-money laundering legislation could
be tightened, particularly in respect of the disclosure of suspicious
transactions to the authorities.
Terrorism
37. The Turkish Government has asked the
EU to add nine organisations operating in Turkey to its Common
Position list of terrorist organisations (for asset freezing and
other Law Enforcement co-operation measures). The EU has not included
these groups in its initial list of terrorist organisations, as
it has thus far only considered proposals from EU member states.
However, the list will be reviewed regularly, and the Turkish
proposals will be considered. The UK has proscribed two of these
groups, the PKK (Kurdish separatist) and DHKP-C (militant Marxist-Leninist)
under the Terrorism Act 2000 and both have been included on our
domestic asset freezing lists. Both groups have applied to be
removed from the UK's proscription list. The Home Secretary recently
rejected the PKK's application. The PKK have applied for judicial
review of the original decision to proscribe them. The UK supports
the inclusion of both groups on the EU list.
Iraq
38. Turkey shares our concern to maintain
the territorial integrity of Iraq and supports UK/US operations
in the northern No Fly Zone (NFZ) established in 1991 in support
of UN Security Council Resolution 688 which called on Iraq to
end repression of Kurds and other minority groups in the north.
Under Operation Northern Watch, RAF and USAF aircraft are based
at Turkey's Incirlik airfield and patrol the northern NFZ, north
of the 36th parallel. Turkish Parliamentary approval is required
every six months to extend Operation Northern Watch —the
most recent extension was granted in December 2001.
UK /TURKEY TRADE
AND INVESTMENT
Trade
39. A major campaign "Turkey: Positioned
for business" (1998-2000) raised UK awareness of opportunities
in Turkey. UK exports grew by 48 per cent to £1.86 billion
in 2000. In common with most EU partners, the UK's exports have
however dropped by some 30 per cent in 2001 following the economic
crisis, and the devaluation of the Turkish lira. But Turkey will
remain an important market, and we are continuing to promote specific
sectoral opportunities, eg in the energy, environment and water
sectors, so that British firms are well placed to take advantage
of opportunities as the economy picks up.
Investment
40. Total Foreign Direct Investment approved
in 2000 was $3.06 billion ($1.7 billion in 1999). The leading
foreign investors are France (20 per cent), Germany (13 per cent),
USA (11 per cent), The Netherlands (11 per cent), and Switzerland
(7.5 per cent). Following HSBC's purchase of Demirbank in October
2001, the UK became the sixth largest foreign investor in Turkey
(7.4 per cent). British firms cover a wide range of sectors, with
over 330 British companies investing.
41. The UK is now the largest recipient
of Turkish direct investment (cumulative total Turkish investment
in the UK until the end of 1999, US $523 million).
Turkish/British Business Council
42. The Turkish/British Business Council
is a joint council administered by Trade Partners UK on the British
side and by DEiK, the Turkish foreign economic relations board,
for the Turkish side. The last Annual General Meeting was held
in London in December 2001; the next meeting is expected to be
in Turkey in late 2002. The UK co-chairman is currently Bill Alexander,
Chief Executive Officer of Thames Water.
ECGD
43. Total ECGD exposure to Turkey is £834
million. Most of this relates to business with the public/government
(sector (£780 million). However there is a modest exposure
(£54 million) to the corporate sector (mainly the banks).
98 per cent of UK exports to Turkey do not rely on ECGD support.
Since the financial crises of November 2000 and February 2001,
ECGD business with Turkey is considered on a case-by-case basis.
Ilisu and Yusufeli
44. These two hydroelectric projects are
part of Turkey's attempt to address its need for more generating
capacity. Other power sources are also being developed. Both projects
could benefit Turkey as a whole and provide development opportunities
for the local populations, but give rise to difficult environmental
and social issues. Major areas of concern are resettlement (both);
downstream flow & relations with downstream states (both);
water quality (Ilisu); archaeological/cultural impact (Ilisu).
45. Ilisu is a 1200mw hydroelectric project
on the river Tigris around 60km north of the border with Syria
and Iraq. The UK contractor Balfour Beatty has withdrawn from
the project, so there is no current application for ECGD support.
Yusufeli is a 680mw hydroelectric project on the river Coruh near
the border with Georgia. The UK contractor is AMEC. UK export
value: $100 million. Other countries considering export credits
are France (lead contractor), Belgium, and Spain. The export credit
agencies have identified a number of environmental and social
concerns where further information is required. Before agreeing
export credit support ECGD will wish to be assured that these
concerns have been properly addressed and that the project meets
ECGD's risk standards.
Foreign & Commonwealth Office
January 2002
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