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Syria Resisting Free Trade With EU
February 15, 2002
Summary
The European Union is moving aggressively to lock down southern Mediterranean markets by establishing bilateral free trade agreements with littoral states. Bringing Levantine giant Syria on board, though, will be a challenge. Syria's economy remains under government control, and a variety of political considerations will limit Damascus' willingness or ability to liberalize for the foreseeable future.
Analysis
European Union Trade Commissioner Pascal Lamy visited Damascus Feb. 6-8 to establish a negotiation framework for free trade agreements between the EU and Syria. Lamy met with Syrian President Bashar Assad and other senior government officials before traveling on to Jordan and Lebanon.
The EU has worked frantically during the past few years to lock down southern Mediterranean markets, and Syria desperately needs foreign investment. But at the same time, the country's economy remains tightly controlled by the government and is a key source of power for the Assad regime. Changes in the national economic system would threaten both the regime and the country's stability overall. As a result, Syria will move with extreme caution in its relations with the EU, and a free trade agreement will not emerge in the near future.
Europe needs an open Syria in order to realize its dream of free access to all Mediterranean markets. This is vital to the future growth of European economies, which will need markets abroad in order to ensure competitiveness at home. Syria, on the other hand, wants to open its economy to counter a bulging population and dwindling oil reserves, but political realities limit its ability to do so.
Brussels in 1995 spearheaded the establishment of a Euro-Mediterranean Partnership to expand bilateral ties. The plan has begun to get results. For instance, the EU recently inked initial association agreements with Algeria and Lebanon that establish a framework for expanded trade, including the reduction or elimination of tariffs on European goods. But the EU also hopes to gain Syrian participation and thus to secure Damascus' vested interest in the future of EU-Med trade ties. A trade agreement with Syria also would expand European access to the Levantine market and provide a transit route for goods to other Middle Eastern countries, including Iraq and Iran.
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Dan
Syria Resisting Free Trade With EU . . .