Turkey says Chinese missile deal not final

Reuters

* Turkey sees no need to consult allies on domestic defence

* Initial selection based on price, ability to co-produce

* Turkey could still back away from deal

* U.S. says it expressed serious concerns to Turkey

By Jonathon Burch

ANKARA, Sept 30 (Reuters) - Turkey said on Monday it couldstill reconsider its decision to co-produce a long-range air andmissile defence system with a Chinese firm currently under U.S.sanctions, but said it felt no obligation to heed othercountries' blacklists.

Turkey's Defence Ministry announced last week it had chosenthe FD-2000 missile defence system from China PrecisionMachinery Import and Export Corp, or CPMIEC, over rival systemsfrom Russian, U.S. and European firms. Turkey is a member of theNATO transatlantic military alliance.

"We do not consider anything other than Turkey's interests,"Turkish Deputy Prime Minister Bulent Arinc told reporters.

"It is not possible for another country to say, 'I have aproblem with them, I had put them on a black list, a red list,how could you give them a tender?'" said Arinc, who also servesas the government's spokesman.

CPMIEC is under U.S. sanctions for violations of the Iran,North Korea and Syria Nonproliferation Act, and the UnitedStates has expressed "serious concerns" over Turkey's decision.NATO sources said collaboration with China on the system couldraise questions of compatibility of weaponry and ofsecurity.

Arinc did not single out the United States in his criticism,saying comments from U.S. officials about the decision had been"respectful", but reiterated that Turkey did not need to consulton matters of domestic defence.

"We are a member of NATO and we have had good relations fromthe beginning with NATO countries, especially the United States.However, when it comes to the subject of defending Turkey ... wehave the power to take a decision without looking to anyoneelse," he said.

Arinc said that while the deal had not yet been completed,the initial selection had been based on the Chinese offer beingthe most economical and because some of the production would becarried out in conjunction with Turkey.

In Washington, State Department spokeswoman Jen Psaki saidthe United States has made clear its concerns to Turkey at ahigh level.

"We have conveyed our serious concerns about the Turkishgovernment's contract discussions with the U.S.-sanctionedcompany for a missile defence system that will not beinter-operable with NATO systems or collective defencecapabilities," Psaki told a daily briefing for reporters. "Ourdiscussions will continue."

Psaki said the United States had taken note of comments byTurkey that the deal was not yet final. If a deal was finalised"then we will talk about that at that point," Psaki added.

DEAL NOT FINALISED

President Abdullah Gul was quoted by the English-languageHurriyet Daily News as saying: "The purchase is not definite.... There is a short list and China is at the top of it. Weshould look at the conditions, but there is no doubt that Turkeyis primarily in NATO."

Some Western defence analysts have said they were surprisedby Turkey's decision, having expected the contract to go toRaytheon Co, a U.S. company that builds the Patriotmissile, or the Franco/Italian Eurosam SAMP/T.

The United States, Germany and the Netherlands each sent twoPatriot batteries and up to 400 soldiers to operate them tosoutheastern Turkey early this year after Ankara asked NATO forhelp with air defences against possible missile attacks fromSyria.

Turkey has long been the closest U.S. ally in the MiddleEastern region, bordering during the Cold War on the SovietUnion. The U.S. military exercised great influence over aTurkish military that strongly influenced domestic politics.

Under Prime Minister Tayyip Erdogan, elected in 2002, therole of the Turkish military in politics has been curbed.Political and military relations between Ankara and Washington,while still close, play a less central role, and this could bereflected in procurement policy.

A source familiar with the competition said Turkey couldstill back away from its decision, describing Thursday'sannouncement as a "selection", not an actual contract award.

The next step was for Turkey to actually negotiate the termsof the deal with the Chinese provider, which could presentopportunities to back away from the deal, said the source,adding that U.S. government and industry officials had notreceived any advance notice about Turkey's intentions.

Raytheon and other losing bidders hope to receive a briefingon the decision, but those meetings have not yet been scheduled.Industry executives hope to schedule those meetings this week.

Industry experts also said the decision appeared to havebeen based on cost, but they did not expect Raytheon to offersignificant price concessions to secure the deal, given its bigbacklog of orders from other countries for the Patriot systemand other missile defence equipment.

Asked about Turkey's decision, a NATO official said it wasup to each nation to decide what military capabilities theyacquire but that it was also the alliance's understanding theTurkish decision was not final.

"However, it is important for NATO that the capabilitiesallies acquire are able to operate together," the official said.

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