Syria to sign trade agreement with European Union

31 October 2003

Damascus and Brussels are set to sign in December a landmark trade agreement reducing tariffs and encouraging economic reform in the country.

Speaking on 23 October EU ambassador to Syria Frank Hesske said the EU and the government concluded in mid-October an 11th round of negotiations towards signing an EU association agreement. He said a 12th round of talks was scheduled for December, which he hoped would lead to the signing of an agreement after six years of negotiations.

‘The results [of the 11th round] were positive. As in any negotiations, the most intensive work takes place in the final stage, but the commitment of both sides is such that we might expect the successful conclusion of negotiations, hopefully before the end of 2003,’ he said.

The EU has signed association agreements with every country on the Mediterranean rim with the exception of Syria. The agreements allow non-EU members to participate in the organisation’s Wider Europe Initiative to extend the single European market to its Mediterranean neighbours.

Hesske said the agreement was the ‘prerequisite’ to better relations between Europe and Syria and would allow Damascus to draw on European assistance in its transition to a fully-fledged market economy. The EU currently provides Syria with some Eur 30 million ($35 million) a year to support economic reform and institution building. Hesske said that signing the agreement would see the EU increase support.

Under discussion is an increase in Syria’s quota of agricultural exports, such as olive oil, to Europe, under the EU’s Common Agricultural Policy (CAP) in return for a reduction in its import tariffs on European products, which range from 10 per cent to 100 per cent.

‘We want Syria’s tariffs dismantled over the next 10-12 years with front loading on the process to stimulate business. If the tariffs remain high for the first four-five years then nothing will happen,’ said Hesske.

The agreement will also contain provisions for a general dialogue on human rights, good governance and democracy although it will not set a timeframe for change. Also covered will be Damascus’ relations with Palestinian organisations and the joint management of migration flows.

However, Hesske expressed frustration at the slow pace of economic reform. ‘Syria wants to achieve something that is difficult to achieve - reform with zero chance of blunder. Therefore it is taking a timid approach. For example, the reform of the banking sector has only seen three foreign banks open in three years. The president [Bashar Asad] has to take into account the conservative forces. That is a roadblock.’

‘Our message is that Syria must be aware that time is not on its side. It risks falling behind its European and Arab friends, so it cannot continue to move cautiously. The economy is in need of reform so it needs to take some risks,’ he said.

Hesske was speaking at the EU-Mashreq Parternariat, an EU-sponsored trade exhibition held in Damascus from 23-25 October. The two-day event attracted 166 companies from 15 European countries.

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