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'Goldfinger' trial strains US-Turkey ties

Deger Akal
November 29, 2017

Iranian-Turkish gold trader Reza Zarrab is testifying at a US trial about how he helped skirt sanctions against Iran. Former US Deputy Assistant Secretary of State Amanda Sloat explains the impact on US-Turkey ties.

Reza Zarrab
Image: Getty Images/AFPO. Kose

DW: Reza Zarrab has pleaded guilty and agreed to become a government witness. Do you expect from him to reveal significant evidence about alleged corruption involving the Turkish government and banking sector, which, according to some media reports, also involves President Recep Tayyip Erdogan and his family?

Amanda Sloat: It is too early to speculate about exactly what he is going to say. But my sense is that there is concern in the Turkish government about what he might say and who might be implicated by his testimony.

What could be the economic and political consequences of this trial?

I think there already [have] appeared to be some economic implications. The Turkish lira has depreciated in recent months as US-Turkish relations have deteriorated and it seems the lira and the Turkish markets have also been reacting in recent weeks to developments in this case. So it seems likely that that will continue. If there are spoken allegations or a ruling about corruption within Turkish banks it could be very damaging to the international reputation of these banks.

Do you expect there to be the political fallout?

Amanda Sloat
Sloat is the former US Deputy Assistant Secretary of StateImage: Privat

There is potential for political implications in Turkey. There is a possibility that allegations will be made and information will be provided in American courts that political figures in Turkey are going to have to respond to. And there has been a risk in recent years of the judiciary getting politicized within Turkey and my sense is that even though the US judicial system has it flaws, [and] is not seen as perfect, it is still seen as legitimate and strong here. And so whatever comes out, the American judicial system will obviously been seen in Turkey, and is going to be addressed within a Turkish domestic context as well.

Erdogan has accused the prosecutors of plotting against him. The Turkish government claims that followers of Fetullah Gulen, the Muslim cleric living in self-imposed exile in the US who Erdogan contends was behind the coup attempt last year, are fabricating evidence. What is your assessment?

My sense is that this response by the Turkish government is similar to the response in 2013 in terms of delegitimizing the criminal accusations by making them appear politically motivated. Certainly there are a lot of dynamics in Turkey in terms of the ongoing battle between the government and the Gulenists following on from the 2013 domestic investigation, following on from the July 2016 coup attempt, that are coloring some of the responses of the Turkish government and I think is making this case be viewed through much more of a political lens. A lot of that response is not well understood in the US, which is focusing on this case as a legal matter and through a judicial lens. I think this continued rhetoric back and forth between the US and Turkey is ultimately going to be very damaging to the bilateral relationship.

In recent years we have witnessed growing tension between the Turkish government and its Western partners. The Zarrab trial is likely to escalate that tension. Are the US and Europe at risk of losing Turkey?

USA New York Trump meets Erdogan
US-Turkey relations have become strained in recent yearsImage: picture-alliance/AP/E. Vucci

There is concern in the US and Europe about the potential of losing Turkey. But certainly neither the US nor the EU wants that to happen. Turkey has understandable reasons to engage with Russia and İran … At the same time Turkey is a NATO ally, remains an aspiring country to join the EU, remains a partner of the US and Europe. We are certainly in a very difficult time in our relationship but I believe that the US and Europe need to be able to continue engaging with Turkey and that Turkey's future continues to lie with the West.

Erdogan is criticizing the US and other NATO partners for not showing strong solidarity with Ankara against perceived security threats, such as the Kurdish PKK or PYD in Syria and the Gulen movement. Do you see a way to de-escalate the tension? What are the steps to achieve this?

Well that's the million dollar question. Continued dialogue is essential. There are a number of things as you said that our countries currently disagree on. On the US side there continues to be concern about domestic politics in Turkey, concerns about backsliding of democracy, the large number of people that have been purged, the arrest of Americans and Europeans who have been jailed, the arrest of two employees of American consulates in Turkey. All of that is certainly causing tremendous concern within the US and Europe. But at the same time the reality is that we continue to need each other. Even though there are differences of opinion between the US and Europe on one side and Turkey on the other side, the reality is that there is also a very broad range of geopolitical challenges that we need to find a way to cooperate on despite the fact that there are these concerns about domestic policies in Turkey and that there are these actions that the US is taking that are frustrating the Turkish government. So it is challenging but it remains essential.

Amanda Sloat is the former US Deputy Assistant Secretary of State for Southern Europe and Eastern Mediterranean Affairs. She is currently a senior fellow at the Brookings Institution and a nonresidential fellow at the Harvard Kennedy School's Ash Center.

The interview was conducted by Deger Akal.