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US ambassador says Turkey ignores pharma debt at its peril

US ambassador says Turkey ignores pharma debt at its peril

Acting US Assistant Secretary of State for Near Eastern Affairs, David Satterfield, prepares ahead of his address to the 11th Annual International Institute for National Security Studies (INSS) Conference in Tel Aviv, Israel, on Jan 31, 2018. (Photo: REUTERS/Amir Cohen)

ISTANBUL: The US ambassador to Turkey said on Wednesday (Sep 23) companies will consider abandoning its market if it fails to fully meet debt payments to American pharmaceutical firms, and he criticised a new Turkish law clamping down on big social media sites.

Addressing a trade conference streamed online, David Satterfield said debts owed by government hospitals to pharmaceutical companies in the United States and elsewhere had risen to around US$2.3 billion from some US$230 million a year ago.

Satterfield said US Commerce Secretary Wilbur Ross had raised the issue with Turkish President Tayyip Erdogan and Finance Minister Berat Albayrak a year ago and was assured that arrangements would be made for prompt payment.

A year later those companies were being asked to accept significant reductions in the amounts owed, Satterfield said, adding there will be consequences for non-payment of debt or reductions in payment.

"Companies will consider departing the Turkish market or will reduce exposure to Turkish market. This is not a direction which serves the interests of Turkey," he said.

Bilateral trade amounted to some US$21 billion last year and the NATO allies have said they aim to lift that to US$100 billion.

Yet there are hurdles including US tariffs on Turkish steel, and Ankara's purchase of Russian missile defences last year that prompted Washington to oust Turkey from a consortium producing F-35 jets.

At Tuesday's conference hosted by the US-Turkey Business Council, Turkish Trade Minister Ruhsar Pekcan said the steel tariffs and the removal of Turkey from a US trade preference programme have damaged efforts to reach the trade goal.

"Such policies by the US severely limit Turkish firms' ability to enter the US market," she said.

Satterfield also voiced concern over a law adopted in July that Erdogan's party says will make mostly US social media sites more accountable to Turkish authorities' concerns over content. Critics say it will silence dissent.

"A policy that mandates large social media firms to store consumer data only in Turkey can create an inherently uneven playing field," he said, adding it could ultimately compel US firms to leave the market.

Source: Reuters

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