Syria Stalls on Signing Trade Deal With EU
Wall Street Journal
Syria Stalls on Signing Trade Deal With EU
By Julien Barnes-Dacey
19 November 2009
DAMASCUS — After years of pursuing a free-trade pact with the European Union, Syria is balking at signing a deal, as local businesses express worry about competition from European goods.
The European bloc is already Syria’s biggest trade partner. Such an agreement would reduce tariffs and spur the inflow of sought-after European goods. It would also be another symbolic sign of Syria’s recent diplomatic rehabilitation.
The EU-Syria trade deal was first raised in 2004. A deal stalled in recent years after a political falling-out between Syria and European capitals. Amid accusations by Washington of Syrian complicity in allowing insurgents into Iraq, and allegations that Damascus may have had a hand in the 2005 assassination of former Lebanese Prime Minister Rafik Hariri, momentum stalled.
But prospects for a deal picked up again earlier this year, when the EU in October invited Syria to sign a so-called Association Agreement with the bloc. The agreement promises closer political and economic cooperation.
Instead of embracing the invitation, Syria balked, perplexing European diplomats who had thought Damascus was still eager for a deal. Syrian officials now say they need more time to study the ramifications for their economy, which is already undergoing significant reforms.
Recent trade liberation with other countries has been welcomed by consumers here. But it has hurt local industry. Some manufacturers have complained they can’t compete with better-quality goods now flowing in from other Arab countries, China and Turkey.
"We are taking our time to see the impact on our agriculture, our industry, and when we have finished the study we will inform the Europeans," Deputy Prime Minister Abdullah Dardari said in a recent interview.
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Syrian businessmen are lobbying hard against the partnership, saying new competition with European goods could have devastating effects on local industry. At the Badr Chocolates factory in the southern suburbs of Damascus, the challenges facing businesses here are clear.
Aging machines sputter, cranking out chocolates that would have a hard time competing with European alternatives. European products are already easy to come by. They are made expensive, however, by import duties that the EU deal would remove.
"It’s as if I have a 1945 model car, and you’re asking me to compete with a 2010 model," said Adnan Dakhakhni, Badr’s owner and a member of parliament.
Syrian industrialists are already reeling as a result of the country’s 2007 free-trade agreement with Turkey. Scores of firms have been forced to shut, fanning a public backlash against economic liberalization enacted by the authoritarian regime of President Bashar Assad.
Mr. Dardari, the deputy prime minister, says the government is still committed to its economic reform. "Competition is healthy, and it’s good ultimately for the economy," he says.
