Mafhoum Exclusive

 

Syria and Europe: A Big Step Forward

By Patrick Seale

 

After six years of hesitation and ten rounds of difficult negotiation, Syria is at last about to sign an Association Agreement with the European Union. The signature is expected to take place before the end of the year. This is a major development which will have very considerable economic and political consequences. Among the countries bordering the southern and eastern shores of the Mediterranean, Syria is the last one to sign with the EU under the so-called Barcelona process -- with the sole exception of Libya which, now that sanctions against it have been lifted, is expected to start negotiations shortly.

Signature of the Association Agreement will be a clear signal that Syria is ready to proceed with much-needed, and much-delayed, reforms. Indeed, President Bashar al-Asad’s strategy would seem to be to use the external pressure of the Agreement to overcome internal opposition to reform from a small group of ‘barons’ – a privileged elite which has greatly benefited from the present relatively closed system, which does not want change, and which fears that foreign investment and foreign influence will dilute its economic and political control.

The charge, sometimes heard in hard-line Ba‘th Party circles in Syria, that civil rights activists campaigning for greater political freedoms are ‘agents of a foreign power’ is itself a reflection of the fear that increased Western involvement in Syrian affairs could shake the present structure of economic and political power, putting at risk the main beneficiaries of the regime.

For a long time there was no political will in Syria to proceed with the Association Agreement. But this has now changed. President Asad has told Romano Prodi, the president of the European Commission, that a firm political decision to sign has been taken. This was confirmed during recent visits to Damascus by Javier Solana, the EU’s High Representative for Europe’s common foreign and security policy, and by Chris Patton, the EU Commissioner in charge of external relations.

In recent weeks, the pace of Syria’s negotiations with the EU has quickened. In the new Syrian government announced last week, the reappointment of Dr Ghassan Rifai as Minister of Trade is also a signal of Syria’s determination to proceed. Dr Rifai is a former World Bank official with international experience and a detailed technical knowledge of the issues involved in the negotiations with Europe.

President Asad is to pay a state visit to Belgium in December, when he is also expected to tour the institutions of the European Union in Brussels and address the European Parliament. He is also planning visits to Greece and Austria in 2004. All these moves will strengthen Syria’s ties with the Union, a grouping of great and growing importance in the world, whose fifteen members are to expand to twenty-five next May.

 

The shock will be painful

Syrian officials are well aware that there will be few, if any, short-term economic benefits from the Association Agreement. There could in fact be immediate losses. Imports from the EU could destroy some Syrian businesses. Some factories might have to close. To mention a single example, Syria’s local production of soft drinks might not be able to withstand competition from international brands such as Coco Cola. The Syrian pound could come under pressure as the current account deficit worsens. Meanwhile, Syria’s own (non-oil) export potential is small and its products are not always competitive. Moreover, its agricultural exports, such as olive oil and fruits, will continue to face protectionist barriers in Europe.

In the case of other Arab countries – such as Morocco, Tunisia, Egypt or Jordan -- internal reform came before signature of an Association Agreement with the EU. This allowed state companies to be privatised,  local industries to prepare for joint projects with foreign partners, and a regulatory and legal environment put in place to attract inward investment. Little of this sort has yet been done in Syria. The shock of dropping tariffs to imports from the EU could therefore be considerable.

At the same time, however, Syria has been pressing the EU to clarify what longer-term benefits it can expect. It will not be satisfied with advice about marketing and packaging and European consumer behaviour. It wants – and expects – major financial support from the EU to cushion the pain of joining a highly competitive trading group.

The scale of this support will probably have to be the subject of further negotiations once Syria has signed up.

The EU is fully aware of Syria’s considerable economic potential and will help it exploit its geographical position as the gateway for trade from Europe to the Gulf and Iran, and to points further east. But the immediate benefit to Syria is likely to be political rather than economic.

Indeed, the Association Agreement is not concerned only with trade and economic cooperation. It also provides for political dialogue on a wide range of issues of mutual concern, including the Arab-Israeli conflict, the continued threats against Syria from some members of the American administration, as well as human rights, which Syria in turn will have to address if it wants EU backing.

 

Association with Europe versus the Syrian Accountability Act

Something of a race is taking place between the EU’s Association Agreement, which will promote closer economic and political ties with Syria, and the Syria Accountability Act, now before a sub-committee of the US Congress which, on the contrary, calls for a wide-ranging boycott of Syria. Which of the two will win the race?

The equation is simple. If the Association Agreement is signed first, it will be more complicated for the American ‘neo-cons’, and their friends among pro-Israeli lobbyists and Maronite extremists, to press for the approval by Congress of the Syria Accountability Act. If, however, the US Congress votes the Act into law, the Europeans will face heavy pressure from the United States not to proceed with the Association Agreement with Syria. For the Syrians, therefore, speed in signing the EU Agreement is of the essence.

Although the Syria Accountability Act is still being examined by a Congressional sub-committee, it could at any moment be sent to Congress for a vote. Irritated by Syria’s opposition to the invasion of Iraq and by its continued support for radical Palestinian factions and for Hizballah in Lebanon, the Bush administration might decide not to veto it. Once in the pipeline, the Act could prove unstoppable.

Syria may not be fully aware of the risk it is running and of the potential impact of the Act on its trading and political relations with the EU. If, for example, a European firm were faced with the choice of trading with Syria or with the United States, there is little doubt which it would choose.

The war in Iraq appears to have given a decisive push to Syria’s negotiations with the European Union. Foreign Minister Farouk al-Shara’, who rarely used to meet with all the EU ambassadors together, now lunches with them every two or three weeks. President Asad finds time to receive European parliamentary delegations. Divisions within the EU over the war in Iraq may have provided Syria with an added opportunity to make its voice heard. Among Syria’s recent efforts in this direction is the creation of several committees of the People’s Assembly with the specific aim of making contacts with their opposite numbers in European parliaments.

Once Syria signs the Association Agreement it can also hope that the European Union will use its political weight to influence the United States and Israel in favour of a fair resolution of the Arab-Israeli conflict on the basis of  the return of territory captured in 1967. Although European opinion on the whole favours a land-for-peace settlement, together with the creation of a Palestinian state alongside Israel, Syria has much ground to catch up with countries like Germany and Holland which have developed close ties with Israel.

For the moment, Syria appears to have recovered from its fear that the American and British invasion of Iraq would be followed by an imminent American attack on Syria. Rather the Syrian argument today is that the United States is beginning to understand that it needs Syrian help in stabilising the situation in Iraq, in persuading extremist Palestinian factions to call Israel’s bluff by renouncing violence, and of course in the continuing international campaign against terror.

 

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