Free trade talks with Syria mark progress in slow Euro-Med Partnership initiative

Date: 07/05/1998

By Mark Turner

SYRIA is to launch talks on a wide-ranging economic and political Association Agreement with the EU in Brussels next week.

It is the last of Europe's 12 'Barcelona process' Mediterranean partners to move towards eventual membership of the Union's expanding free trade zone.

Although officials expect the road to Damascus to be fraught with difficulties, given Syria's traditional reluctance to convert to liberal economics, a spokesman for Mediterranean Affairs Commissioner Manuel Marín said talks should be completed by the end of next year.

The official launch of negotiations follows a year of preparatory talks and is seen by EU officials as a sign of Syria's willingness to lower industrial tariffs and harmonise commercial standards with the Union.

However, EU negotiators say the country wants a "very progressive market opening", and that Damascus "is afraid of a big bang". The Association Agreement is likely to allow transition periods of at least 12 years before the launch of free trade.

The vast bulk (75-80%) of Syria's exports to the EU are currently in petroleum products, giving the country a trade surplus, but analysts suggest that reserves are running low.

The European Commission will encourage the country to diversify into other areas such as textiles, and to drop barriers to foreign investment. But Damascus is likely to call for substantial EU financial support to compensate for lost customs revenues.

The agreement will also contain commitments to basic democratic standards, a possible area of controversy given Syria's reputation as a sponsor of terrorism and its poor human rights record.

The opening of talks is a welcome step forward for the embattled Euro-Mediterranean Partnership, which has suffered badly from the faltering Middle East peace process. Last year's Malta summit was nearly sunk by Israeli-Arab tensions, and a meeting of industry ministers had to be cancelled altogether.

The Commission stresses, however, that there has been some progress. The Union has an Association Agreement up and running with Tunisia, and has signed deals with Morocco, Israel, the Palestinian Authority and Jordan. Malta is set to launch talks on an industrial free trade zone shortly.

But talks with Egypt are stalled over agriculture; and although a deal with Lebanon is complete on paper, Beirut has shied away from signing on the dotted line. Negotiations with Algeria are progressing very slowly because of the country's severe political and social turmoil.

While Turkey has a customs union with the EU and Cyprus is in line for full Union membership, tensions between Ankara and Athens continue to sour relations.

Fears are already mounting that last year's Malta mayhem could be repeated at the mid-term Euro-Mediterranean ministerial gathering in Palermo this June. Officials will meet later this month to consider how to avoid another disaster.