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 U.S. and NATO officials have said Turkish collaboration with China
on the system could raise questions of compatibility of weaponry and
of security.
Franco-Italian Eurosam, which is owned by Franco-Italian missile
maker MBDA and France's Thales <TCFP.PA>, came second in a tender
last September, losing out to China Precision Machinery Import and
Export Corp's (CPMIEC) $3.4 billion offer.
"Some disagreements have emerged with China on the issues of joint
production and know-how during negotiations over the missile defense
system," Erdogan told reporters as he returned from the NATO summit
in Wales, private television channel NTV said on Sunday.
"Talks are continuing despite that but France, which is second on
the list, has come up with new offers. Right now our talks with
France are continuing. For us, joint production is very, very
important," he said.
 The comments were confirmed by Erdogan's office on Monday.
The choice of CPMIEC for the project irked Western allies as the
company is under U.S. sanctions for violations of the Iran, North
Korea and Syria Non-proliferation Act.
U.S. Defense Secretary Chuck Hagel, who told a defense industry
forum last week that Russia and China were working hard to close a
weapons technology gap with the United States, was in Ankara on
Monday.
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Last month, Turkey invited firms in the tender, including Eurosam
and U.S.-listed Raytheon Co <RTN.N>, the maker of Patriot missiles
which came in third, to extend the validity of their bids,
indicating Ankara was still considering alternative offers but
stopped short of discussing problems with the Chinese deal.
In May, Turkish officials told Reuters on condition of anonymity
that China had not met the tender's conditions.
(Reporting by Tulay Karadeniz in Ankara and Humeyra Pamuk in
Istanbul; Writing by Dasha Afanasieva; Editing by Daren Butler and
Ralph Boulton)
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