Missile deal signals hot summer for Turkey’s transatlantic ties

Turkish President Recep Tayyip Erdogan and US President Donald Trump speak at a meeting during the UN General Assembly in New York. (AFP/File)
Updated 24 May 2019
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Missile deal signals hot summer for Turkey’s transatlantic ties

  • Turkey says buying Russian weapons system is aimed at meeting Turkey’s defense needs

ANKARA: Turkey has until next month to cancel a multibillion dollar S-400 missile system deal with Russia, or face harsh US penalties, CNBC reported on Tuesday. 

If Ankara does not cancel in favor of buying the US-made Patriot missile defense system instead, it may also be removed from Lockheed Martin’s F-35 fighter jet program, costing thousands of jobs. Turkey is currently producing about 800 parts for the world’s most advanced fighter.

The delivery of 100 F-35s to Ankara may also be halted, and other defense and industrial cooperation projects with the US may be put at risk.   

In his latest visit to Turkey in early May, NATO Secretary-General Jens Stoltenberg said its procurement of the S-400 was a national decision. 

However, the system, which cannot be integrated alongside other NATO systems and carries fears around data collection, has been a major source of disagreement between Ankara and Washington. 

The Countering America’s Adversaries Through Sanctions Act (CAATSA) used to impose sanctions on Iran, North Korea and Russia, could be used against Turkey should the deal with Moscow proceed, though it is thought not until Ankara takes physical delivery of the missiles, which is expected to take place in July.

Sanctions could include prohibitions on banking and foreign exchange transactions, and the denial of export licenses. 

Individuals involved may also be subject to visa denials and exclusion from the US, as well as partial freezing or confiscation of assets.

Aaron Stein, director of the Middle East program at the US-based Foreign Policy Research Institute, says CAATSA would hurt Turkish interests, but would also limit US President Donald Trump. 

“He could technically veto (CAATSA), but the language in the legislation is not as straightforward as other waivers included in sanctions legislation. It is not a question of if Turkey will be sanctioned, it is how, and using which of the 12 available sanctions,” he told Arab News. 

“Turkey would do itself a lot of favors if it stopped saying this was a done deal and delayed acquisition to allow for more talks. But that is Ankara’s choice to make.” 

Turkish military personnel have already traveled to Russia for training on the S-400 system, but Ankara does not believe the deal will affect its involvement in the F-35 program. 

Turkish officials are also evaluating an offer made by the US in late March to sell them the Patriot system, with a decision expected by early June.

In a statement on Tuesday, Turkish Defense Minister Hulusi Akar said the country was meeting its responsibilities under the F-35 project and added that buying the Russian system aimed at meeting Turkey’s defense needs. 

“Turkey prepares itself for the possible implementation of CAATSA sanctions. In our meetings with the US, we perceive a general rapprochement on issues including the east of the Euphrates, F-35s and Patriots,” he said. 

Besides pushing Turkey away from the Atlantic alliance, the potential CAATSA sanctions would also hit the Turkish economy, which is already in recession, with the Turkish lira losing more than 40 percent of its value over the past two years.

Timothy Ash, a London-based economist, said Ankara would be taking a huge gamble if they thought Trump would block sanctions, telling Arab News it would be “catastrophic for the Turkish economy.”

Trump already doubled US tariffs on Turkish steel and aluminum last year, over the detention of an American pastor on espionage charges in the country. 

“There will be very real and very negative consequences if Turkey goes through with its plans to buy the Russia system,” State Department spokeswoman Morgan Ortagus told reporters in Washington on Wednesday.

An expected state visit by Trump to Ankara in July has not been officially confirmed.


Treasury Secretary: US ‘could not be happier’ with Bahrain outcome

Updated 7 min 44 sec ago
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Treasury Secretary: US ‘could not be happier’ with Bahrain outcome

  • Mnuchin confident of raising the first $4 billion soon

MANAMA: Jared Kushner’s “workshop” aimed at securing economic prosperity for Palestine closed with optimistic forecasts from President Donald Trump’s special adviser that it could be the basis for a forthcoming political deal with Israel.

Kushner told journalists at a post-event briefing: “I think that people are all leaving very energized, very pleasantly surprised at how many like-minded people they see. It is a solvable problem economically, and the reason why we thought it was important to lay out the economic vision before we lay out the political vision is because we feel we need people to see what the future can look like.

“The Palestinian people have been promised a lot of things over the years that have not come true. We want to show them that this is the plan, this is what can happen if there is a peace deal.”

The next stage, before a political deal is attempted, will be to get feedback from the event and agree to commitments for the $50 billion package for Palestine and other regional economies.

“I think you need $50 billion to really do this the right way, to get a paradigm shift,” Kushner added.

US Treasury Secretary Steven Mnuchin said: “I could not be happier how this has gone,” adding that he was “highly confident we will soon have the first $4 billion. It’s going to be like a hot initial public offering.”

Most of the attendees at the event in Manama, Bahrain, gave Kushner’s economic proposals a serious hearing and agreed it was a useful exercise. Mohammed Al-Shaikh, Saudi minister of state, said: “Can it be done? Yes it can, because it was done before. In the mid-1990s to about the year 2000 there was a global coordinated effort by the US and other countries. I was at the World Bank at the time. I saw it. If we could do it then with significantly less money we can do it again.”

Others warned, however, that there was still a long way to go on the political aspects of the Israeli-Palestinian relationship. Tony Blair, the former British prime minister and Middle East peace envoy, said a political deal was essential.

“This is an economic plan that, if it is implemented, is going to do enormous good for the Palestinian people. But it isn’t a substitute for the politics. There will be no economic peace. There will be a peace that will be a political component and an economic component. The economy can help the politics and the politics is necessary for the economy to flourish.

“The politics has got to be right in this sense as well. The obvious sense people talk about is how do you negotiate the contours of the boundaries of a Palestinian state in a two state solution,” Blair said.

Christine Lagarde, managing director of the International Monetary Fund, highlighted the work the fund has done in conflict situations. “We had an exceptional result in Rwanda, and a good economic outcome in Mozambique,” she said. But she contrasted this with disappointing results in other African conflicts.

Lagarde said that the aim of the economic plan should be to create jobs. “The focus should be on job-intensive industries, like agriculture, tourism and infrastructure.”

Willem Buiter, special economic adviser to US banking giant Citi, said there were obstacles to the Kushner plan succeeding. “Necessary conditions for any progress are peace, safety and security. And there must be high-quality governance and the rule of law in Palestine,” he said.

HIGHLIGHTS

• Jared Kushner believes the conflict is a ‘solvable problem economically.’

• The senior adviser vows to lay out political plans at the right time.

• Expert urges external funding in the form of grants or equity, rather than loans.

He also suggested external funding should be in the form of grants or equity, rather than loans. “We should not burden a country trying to escape from its past with high debts,” he added.

Some attendees warned of the risks to investor funds in the current political situation in the Middle East. 

But Khalid Al-Rumaihi, chief executive of the Bahrain Economic Development Board, said: “Risk is not new to the region. We’ve tackled it for the past 30 to 40 years, but that has not stopped investment flowing in.

“Investors trade risk for return, and the Middle East has learned to cope with risk and conflict. There are pockets where the risk is high and Palestine is one of them. But I remain positive. The return in the region is higher to compensate for the risk,” he added.

At a session of regional finance ministers, Mohammed Al-Jadaan of Saudi Arabia said: “The region is in desperate need of prosperity and hope. There is a way forward, but you need political commitment.”

UAE Finance Minister Obaid Al-Tayer added: “We are decoupling politics from economics. If it’s the only initiative on the table we should all give it a chance.”