[Congressional Record Volume 149, Number 71 (Tuesday, May 13, 2003)]
[House]
[Pages H3996-H3997]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




              TURKEY'S DECADE-OLD BLOCKAGE AGAINST ARMENIA

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from New Jersey (Mr. Pallone) is recognized for 5 minutes.
  Mr. PALLONE. Mr. Speaker, I come to the floor this evening to discuss 
the decade-old blockade against Armenia by Turkey. This is one of the 
most egregious violations of international law by Turkey, and it is one 
that hardly gets any attention in the international community. I have 
been encouraged, however, by two recent reports on the Turkish 
blockade. The first was done by the State Department at the request of 
me and the gentleman from Michigan (Mr. Knollenberg) and the second was 
written by members of the European Parliament.
  Last year, members of the Congressional Caucus of Armenian Issues, of 
which the gentleman from Michigan and I are cochairs, identified a bill 
that would grant some Turkish goods duty free status. We protested very 
early about this, Mr. Speaker; and when it came time to include the 
bill, we obtained assurances from the administration that they would 
try to offset this provision for Turkey by pressing for Armenia's 
accession to the World Trade Organization. The letter from Deputy 
Secretary Armitage in this regard specifically stated, and I quote, 
``The administration is pressing Turkey to restore economic, political 
and cultural links with Armenia, and is encouraging Turkey to open its 
border with Armenia. We believe that such action would promote the 
economic development of both Turkey and Armenia.'' We were also 
promised, Mr. Speaker, a report by the State Department and the U.S. 
trade representative on the Turkish blockade by March 31 of this year.
  Mr. Speaker, the report we received was entitled: ``The Economic 
Impact of Turkish/Armenian Border Closure and Diplomatic Contacts with 
Both Parties on This Issue.'' I have included a copy of this report for 
the Record, Mr. Speaker. This report was only three pages long, Mr. 
Speaker; but it made clear some of the administration's views on the 
Turkish blockade. It stated: ``The United States has long pressed for 
the opening of the border and the free flow of trade in the region.'' 
The report also listed various attempts that the United States has 
pressed Turkey on this issue and it stated: ``Most recently the issue 
was raised with Turkish officials during Secretary Powell's April 2 
visit to Ankara, Turkey.''
  Mr. Speaker, although members of the Congressional Caucus on Armenian 
Issues are encouraged by Secretary Powell's helpful comments during a 
very tense time in the Middle East, we also encourage a greater 
commitment by the administration to pressing Turkey to discontinue its 
incredibly damaging blockade.
  The second report that I mentioned, Mr. Speaker, was coordinated with 
a conference sponsored by the European Parliament and the Turkish-
Armenian Business Development Council, and it included members of the 
European Parliament and business community of both Turkey and Armenia. 
The title of the conference was: ``Still an Iron Curtain: Armenia-
Turkey relations, 10 years after the border was closed.''
  This conference, Mr. Speaker, highlighted not only the economic 
numbers that justify the lifting of the blockade but also the real 
Armenian and Turkish citizens that want the decade-old interruption of 
their normal life and commerce to end. The TABDC estimates that 30 to 
40 percent of Armenia's GNP is lost each year solely to the border 
closure. Every year the Armenian Caucus pushes for a robust level of 
U.S. aid for Armenia, but these efforts to help revive the economy and 
civil society are hamstrung by Turkey's insistence in joining ranks 
with its belligerent brother, Azerbaijan. The State Department report 
also included a 2001 World Bank report entitled: ``Trade, Transport and 
Telecommunications in the South Caucasus: Current Obstacles to Regional 
Cooperation.'' This report repeats what is already common knowledge, 
that closed borders retard trade and development.
  Mr. Speaker, it has been far too long for Armenia to suffer under the 
yoke of Turkey. This is the only situation in the world where one 
member of the WTO is blockaded by another. We have known for years 
about Turkey's illegal blockades; but since Armenia's accession to the 
WTO, Turkey's actions are egregious even more. There can be no excuse 
for Turkey to continue the blockade of Armenia and still hold itself up 
as a democracy, purportedly respecting the rights of all its citizens 
and neighbors.
  Mr. Speaker, finally, I call on the Bush administration to continue 
to press Turkey hard to drop the 10 years of blockade against its 
sovereign neighbor. It is crucial for the United States to be seen in 
the international community as a peaceful arbitrator between enemies. 
The release of this burden on the peoples of Armenia and eastern Turkey 
would help the region recover from the market disruption after the fall 
of the Soviet Union. For peace to prosper, for democracy to truly take 
hold and for the economies of all the countries of the South Caucasus 
to move forward into the 21st century, relations must be normalized 
throughout the region. This region was mired in war and genocide before 
the rise of the Soviet Union. It should be an imperative of the Bush 
administration not to let this region slip back further economically.

                            United States Department of State,

                                    Washington, DC, April 7, 2003.
     Hon. Frank Pallone, Jr.,
     House of Representatives.
       Dear Mr. Pallone: As promised in Deputy Secretary 
     Armitage's letter dated September 20, 2002, regarding the 
     Turkey/Armenia border issue, enclosed is the State Department 
     Report, Economic Impact of Turkish/Armenian Border Closure 
     and on Diplomatic Contacts with Both Parties on This Issue. 
     Also enclosed for your information is the 2002 World Bank 
     Report entitled Trade, Transport and Telecommunications in 
     the South Caucasus: Current Obstacles to Regional 
     Cooperation.
       I am pleased to note that the Administration's efforts on 
     Armenia's accession to the WTO were successful and that 
     Armenia became a member in December 2002.
       We hope this information is useful to you. Please do not 
     hesitate to contact us if we can be of assistance on this or 
     any other matter.
           Sincerely,
                                                    Paul V. Kelly,
                          Assistant Secretary Legislative Affairs.
       Enclosures: As stated.

   Economic Impact of Turkish/Armenian Border Closure and Diplomatic 
                Contacts with Both Parties on This Issue

       Citing Armenian aggression against Azerbaijan during the 
     hostilities over Nagorno-Karabakh, the Government of Turkey 
     closed its border with Armenia in March 1993. Turkey took 
     this action following the Armenian seizure of Kelbajar, an 
     Azerbaijani province outside Nagorno-Karabakh. Prior to that 
     time, the border was open for one train a week between Kars 
     in Turkey and Gyumri in Armenia. The United States has long 
     pressed for the opening of the border and the free-flow of 
     trade in the region.
       Azerbaijan, too, severed all economic relations with 
     Armenia and has refused to allow any direct trade. The trains 
     between the two countries had already ceased operating owing 
     to harassment of crews and torn-up tracks on both sides. As a 
     result, trade between land-locked Armenia and neighboring 
     markets has been distorted and Azerbaijan and Turkey have 
     cost the most direct transportation corridor between their 
     countries and the Mediterranean and Caspian Seas. Although 
     there has been a cease-fire and an ongoing Nagorno-Karabakh 
     peace process since 1944, the governments of Azerbaijan and 
     Turkey say they will only open their borders with Armenia 
     only when there is a settlement to the conflict.
       The full extent of these trade distortions will ultimately 
     be eliminated only with the opening of both borders. However, 
     assuming only the Turkish/Armenian border were reopened, one 
     would expect: a reduction in transportation costs to and from 
     Armenia, an increase in Turkish-Armenian trade, and an 
     improved overall economic environment in Armenia and eastern 
     Turkey. Armenian Foreign Minister Oskanian has stated that 
     the border closures were among the major hindrances to 
     increasing export volumes and attraction of foreign 
     investments to Armenia. And it is true today that 
     transportation costs and customs duties can increase the 
     prices of Armenian imports and exports by as much as 100 
     percent and in some cases even more due to the need to ship 
     goods via Georgia or Iran. If the Turkish-Armenian border 
     were to open, some economic observers estimate that overall 
     transportation costs to and from Armenia might fall by 50 
     percent or more.
       Assuming that these savings lead to lower prices, one would 
     expect overall trade between Turkey and Armenia, as well as 
     transit traffic between Armenia and Western Europe via 
     Turkey, to increase in real terms as

[[Page H3997]]

     well. Regional trade has been declining as a result of the 
     border closure in recent years and unofficial reports 
     indicate that a reopening of the Turkey-Armenia border 
     would lead to enhanced trade and enable Turkey to provide 
     a larger portion of the nearly $1 billion worth of goods 
     that Armenia imports each year. Also, existing 
     transportation routes preclude trade in certain products, 
     including building stone, produce, flowers, and meats. 
     Opening the border would open the possibility to a 
     profitable trade in such goods. Placing a voltage adjuster 
     near the border would allow the transfer of excess 
     electricity generated in Armenia to the energy-poor 
     regions of eastern Turkey.
       This increased economic activity and the improved access to 
     local markets would have a positive impact on the economic 
     environment throughout the region, especially in Armenia and 
     eastern Turkey. The full economic potential of the region is 
     unlikely to be achieved until there is a normalization of 
     relations between Armenia and Azerbaijan as well. The opening 
     of that border would enable the reopening of the railroads 
     from Armenia to Azerbaijan and the creation of an 
     uninterrupted railroad link between Istanbul and Baku and the 
     Mediterranean and Caspian Seas. This would lead to enhanced 
     trade between Turkey and the Caspian and Central Asian 
     regions.
       The internal conditions in Armenia and throughout the 
     region must be prepared to take full advantage of an open 
     border. As stated in the World Bank's Trade, Transport and 
     Telecommunications in the South Caucasus: Current Obstacles 
     to Regional Cooperation, (attached) ``In the long run a peace 
     settlement will only generate widespread and sustainable 
     benefits, if the institutional and physical milieu is 
     sufficiently supportive. The realization of these potential 
     benefits appears highly unlikely, at present, as the current 
     institutional and physical milieu is anything but supportive 
     and offers few incentives for new development.'' The World 
     Bank report makes a very rough estimate of regional trade 
     normalization, and therefore open borders with both Turkey 
     and Azerbaijan. The report found that open borders with 
     Turkey and Azerbaijan could result in significant increases 
     in Armenia's exports ($269-342 million) and GDP likely would 
     rise up to 30-38 percent on a one-time basis. The percentage 
     impact on Turkey's overall trade figures would be much less, 
     but likely beneficial as well. It also bases its estimate on 
     older trade figures (1999 or earlier).
       The U.S. Government has budgeted approximately $1.336 
     billion to fund assistance programs in Armenia, plus $218 
     million in surplus Department of Defense and privately 
     donated humanitarian commodities since Fiscal Year 1992. In 
     Fiscal Year 2002, all U.S. Government agencies budgeted $103 
     million for assistance programs in Armenia.
       The Governments of Armenia and Turkey have stated that they 
     are willing to pursue improved relations. The U.S. Government 
     continues to press the Government of Turkey at every 
     appropriate opportunity to open the border with Armenia. Most 
     recently the issue was raised with Turkish officials during 
     Secretary Powell's April 2 visit to Ankara. The U.S. 
     Government also urges the Government of Armenia to continue 
     to raise these issues with the Turkish government. U.S. 
     officials brought up the subject during Foreign Minister 
     Oskanian's visit to Washington in February. In its role as 
     Co-Chairman of the OSCE's Minsk Group, the U.S. is actively 
     engaged in the search for a peaceful, mutually-acceptable 
     resolution of the Nagorno-Karabakh conflict, including the 
     normalization of regional trade relations, which would 
     stabilize the situation in the region and provide the basis 
     for greater economic growth in Armenia, Azerbaijan and 
     eastern Turkey.
       On the diplomatic front, in 2002 the Armenian Government 
     increased diplomatic contact with the Government of Turkey. 
     It encouraged working-, mid-, and senior-level diplomatic 
     contacts with Turkey and accepted a Turkish proposal for 
     trilateral ministerial consultations. Armenian Foreign 
     Minister Oskanian held three rounds of discussions with 
     Turkish Foreign Minister Cem, including one that also 
     included Azerbaijani Foreign Minister Guliev. Following the 
     change in government in Turkey last summer, the Armenian 
     Foreign Minister also met once with the Foreign Minister of 
     the interim Turkish Government. The Government of Turkey 
     altered its stance on Armenia's WTO accession last year, 
     helping to pave the way for Armenia's accession in December 
     2002. Turkish President Sezer sent President Kocharian a 
     letter congratulating him on his March 5 re-election.
       Drafted: CG Istanbul, Jonathan Henick; EUR/CACEN: Margaret 
     Pawlick; Embassy Yerevan David Gehrenbeck.
       Approved: The Deputy Secretary.

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