Exchange of consultations between decision makers of the two countries have so far failed to convince the Defense Industry Undersecretariat (SSM), the civilian arms procurement agency, to soften its contract terms including a mandatory clause for companies to compete in projects only if they come up with government guarantees that there would be no restrictions on technology transfers.Turkey’s request that companies can only bid in arms acquisition projects if they ensure from their governments an export license runs against US laws. Such a request also stems from Turkey’s past experience with the US; when a US company won a project, Ankara had to wait an eternity for the US Congress to approve export licenses to their companies.
Turkey’s stance, what the Americans see as uncompromising defense procurement policy, was again at the top of the agenda at the latest American-Turkish Council (ATC) meeting held in Washington in late March. Participants to the ATC meetings described the ongoing Turkish-US problems on technology transfer issues as a “Dialogue of the deaf.”
While, in his speech, Turkish Deputy Chief of Staff Gen. Ergin Saygun briefly touched on the issue of technology transfer problems between the two countries when he said that “Turkey is a partner not a market,” SSM Undersecretary Murat Bayar has reportedly been extremely critical of US technology transfer policies, reportedly irking many participants with his allegedly strong-worded statement that some participants claimed was not that polite. Bayar was not available to answer Today’s Zaman’s questions on the issue.
Bayar reportedly outlined to the audience at the closing breakfast session of the ATC meeting three below-mentioned Turkish objections over US procurement policies:
1- Foreign Military Sales (FMS) credits should be overhauled. (According to unofficial figures Turkey owes more than $5 billion to the US from arms sales through FMS sales. FMS do not provide for technology transfers to the country buying arms. Military sources recently told Today’s Zaman that, for example, interest rates to be charged to Turkey for its commitment to buy around 100 Joint Strike Fighters is estimated to be around 28 percent, which they said is too high. FMS conditions that do not contain by nature local workshare to the user country, is one reason why negotiations between the SSM and Lockheed Martin as well as the US government currently stalled on Turkey’s plans to buy additional 30 F-16 fighter planes.)
2- Export license approval should be eased and should be more efficient. The US needs to embrace industrial cooperation. (If any country using US arms needs to make modifications on equipment, for example in line with its changing threat perceptions, it has to apply to the US for changes. The US Congress has a major say in issuing export transfer licenses to US companies.)
3- US limitations on US arms users should not impose bans on where they are used. (The US has been imposing, for example, a ban on both Turkey and Greece for the use of US supplied arms, including F-16 fighters, in and around Cyprus. Both countries are reportedly violating that ban however. Since the SSM has taken the responsibility from the military-packed Ministry of National Defense for the negotiations concerning the additional F-16s purchase, it has been resisting the US ban on their usage over Cyprus.)
US does not signal changes in laws
During the ATC meeting, US participants, including Gen. Kohler of the Defense Support Cooperation Agency of Pentagon, responded to Bayar saying that the US Congress dictates issues such as industrial participation as well as restrictions on the use of US supplied arms, such as in Cyprus, and laws related to those matters could not be changed.
Meanwhile, Bayar’s strongly worded critical remarks made at the ATC gathering closely followed the latest US criticism over Turkey’s defense procurement policy. On March 16, Dan Fata, Deputy Assistant Secretary of Defense for Europe and NATO, told a congressional hearing on US-Turkish relations that the SSM’s current acquisition policies hampered Ankara’s military modernization and US-Turkish defense industry cooperation.
“The state of defense industry cooperation (with Turkey) is an issue of concern. While there are a number of promising projects either underway or under consideration, the defense industry relationship has been stagnant for the past several years. We remain concerned that the current approach of Turkey’s defense procurement (agency) towards contracting prevents US companies from bidding,” Fata said.
Due to Turkey’s -- what the Americans see as tough -- terms and conditions, US companies cannot bid in Ankara’s major arms procurement projects, including the acquisition of $2.7 billion worth attack helicopters (On March 30 Turkey decided to start contract negotiations with Italy’s Agusta Westland for its Mangusta A 129 model), $1.2 billion dollar worth long range missile acquisition as well as around $1 billion in spy satellites.
However, on the acquisition of 52 multipurpose helicopters, a project worth around $750 million, the SSM has reportedly been negotiating with US company Sikorsky too, though the company has failed to comply with the SSM’s contract terms and conditions. Sikorsky’s attractive industrial participation offer is said to have played a role in the SSM’s bargain with the US company.
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