Turkey in tight spot between Russia and NATO

ISTANBUL Thu Aug 28, 2008 10:58am EDT

Russian soldiers guard suspected looters in Tskhinvali August 27, 2008. REUTERS/Pavel Pavlov

Russian soldiers guard suspected looters in Tskhinvali August 27, 2008.

Credit: Reuters/Pavel Pavlov

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ISTANBUL (Reuters) - NATO-member Turkey is treading a fine line between its loyalty to the alliance and its economic interests in its Black Sea neighbor Russia, with some fearing Ankara could find itself at the frontline of a new Cold War.

Evidence of Turkey's dilemma in the standoff between the West and Russia over its action against Georgia was on display last week, when two U.S. ships sailed through the Istanbul Strait on their way to the Black Sea.

Russia has accused the West of stirring tensions with a NATO naval build-up in the Black Sea following a brief war between Russia and Georgia. A close U.S. ally which aspires to join the European Union, Turkey is the passage way to the sea.

During the Cold War, Turkey was NATO's southern flank, an isolated bulwark on Soviet frontiers. But since the collapse of the Soviet Union, Russia has become Turkey's top trade partner, supplying the majority of Turkey's energy needs.

"(Current tensions) put Turkey in a very tight spot because it is under pressure from Russia and its Western allies," said Wolfango Piccoli, an analyst at the political risk consultancy Eurasia Group.

"Turkey is again a frontline state like in the Cold War, but the difference now is that its dependency on Russia is much bigger," he said.

Turkey fears it is already feeling signs of a possible fallout with Moscow affecting their $38 billion trade.

Ankara has protested to Russia over trade restrictions as 10,000 Turkish trucks are being held at various Russian border crossings. Russia says inspections on Turkish trucks are due to a new customs law, but Turkish officials see darker motives.

Turkish businesses are concerned Turkey could lose $3 billion in the short term if the delays continue, and Turkey's Foreign Trade Minister responded to the move in harsh terms.

"If you harass us, we will you," Turkish newspapers reported Foreign Trade Minister Kursad Tuzmen as telling Russian officials.

ENERGY CARD

Turkey, which neighbors Georgia, has kept a low profile since the outbreak of a brief war between Moscow and Tbilisi earlier this month.

Unlike its Western allies, it has refrained from condemning Russian actions. But NATO members may want a more strident supporter on its eastern frontline.

"(Turkey) must act like a NATO member ... if it wants its place in Trans-Atlantic relations. It became a member years ago, and that means Turkey has to support the steps that NATO takes," a high-level U.S. official was quoted by Sabah daily as saying.

Analysts have also said the United States may want Turkey to change the terms of the Montreux Convention, which regulates shipping traffic through the Bosphorus Strait in Istanbul.

Turkey's dependence on Russian gas and coal, however, may make it difficult for Ankara to take those steps.

Last year Russia provided more than 60 percent of Turkey's imported natural gas through two pipelines as well as 56.4 percent of Turkey's thermal coal, used in the country's power and booming construction sectors.

Turkey asked Russian state-owned gas company Gazprom to increase its supplies to Turkey after Iran turned off its gas to Turkey to meet its own domestic needs last year.

Potential problems with Russian gas or coal supplies would create large problems for Turkey in the winter.

"On the pipeline there may arise 'technical problems' which means we have real problems ... that means for industry, for consumers, your economy will be harmed," said energy analyst Necdet Pamir.

Turkey has worked hard since the fall of the Soviet Union to become an energy hub delivering Caspian gas and oil to European markets, and the country often boasts of its important geostrategic position.

But if tensions continue to build in the Caucasus, Turkey may not find its position so appealing.

"Turkey's geostrategic importance can sometimes be a liability and this case is an example," said Piccolli.

(Additional reporting by Zerin Elci and Ibon Villelabeitia in Ankara; Editing by Caroline Drees)

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