Issue No.588
Region
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30 May - 5 June 2002 Issue No.588 Region |
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| Published in Cairo by AL-AHRAM established in 1875 | Recommend this page | ||
Critical engagement
One country in the Levant stands out for its strategic and economic importance. Iason Athanasiadis on why Syria is ratcheting up the tension between the EU and the US
Syria is increasingly becoming a point of friction between the European Union and the United States, possibly rivaling Iran's position as the Middle East's main bone of contention between the two trade competitors after Israel. Even as the EU expands its bilateral relations with Syria, the US continues to view the country as a threat to its own and Israel's interests in the region. The growing anti-American boycott that is gripping the Middle East is prompting commentators to predict that the climbing tension will continue to impede economic reforms in the Levant.
The world's superpower, the United States, and the world's most powerful bloc, the European Union, have seemed set on an increasingly divergent course over the past year. Tensions have risen both as a result of the ongoing US-championed war against terrorism and due to the fledgling trade war between the two blocs and their diverging perspectives on how to mediate in the Palestinian-Israeli conflict. EU officials have harshly criticised the Bush Administration's handling of US foreign policy just as US officials have accused EU diplomats of being pro-Palestinian in their initiatives.
Recently, as the escalating US rhetoric against the country has been matched by deepening EU involvement and solidifying trade ties, Syria has appeared an increasingly likely candidate to emerge as a battleground between the First World giants.
The US has declared Syria a state sponsor of terrorism and kept it on an annually renewed list despite a constantly diminishing stock of evidence that Syria has sponsored terrorist activities in recent years. Last week, the US upped the ante when Undersecretary of State John Bolton added Syria to an expanded list of "axis of evil" countries which also includes Libya and Cuba.
Syria's relations with Europe have been infinitely better. Although the relationship with the EU goes back to the signing of the co-operation agreement in 1978, ties have become closer since the end of the Cold War. Syria's debts -- estimated at $22 billion -- and the loss of its former Soviet sponsor left Damascus little room to manoeuvre, even as widespread unemployment and an annual growth rate of 2.5 per cent increased the pressure to stimulate economic growth.
In 1995, the Barcelona process started with the aim of fostering prosperity and stability in the Mediterranean region, Europe's strategically paramount backyard. EU involvement in Syria peaked when negotiations began in 1998 over the signing of a bilateral association agreement of the kind that the EU already has with several MENA countries and which will ultimately lead to a regional free trade zone. Last week, the EU disbursed $117 million as part of a joint development programme with Syria to help the beleaguered country's economy and boost the development and reform of its health sector. President Bashar Al-Assad has backed several proposals for reform, including the easing of exchange controls, while encouraging foreign investment. The health care loans are intended to build on these changes by fostering confidence and assisting the president to expand his economic steps to the political sphere and back human rights reforms. The recently unveiled Country Strategy Paper for Syria, covering the 2002-2006 period and defining a strategic framework for EU assistance, plans for the gradual disbursal of about $100 million.
The EU has also funded several development programmes and is now moving towards supporting the development of the economic structures that are needed to ease Syria into the world economy: reform of the banking sector, business development, improved management of public services, training and education and industrial modernisation. Seven financing agreements for specific projects have been concluded since 2000.
All this aid has appeared to produce some results. Apart from Algeria, Syria is the only Mediterranean partner to have recorded a trade surplus with the EU. The EU accounted for 34 per cent of Syrian imports and 66 per cent of Syrian exports in 2000.
Although the partnership proposed at the Barcelona conference was to have two tracks -- a political and security partnership aimed at establishing a common area of peace and stability through promoting human rights, democracy and the rule of law, and an economic and financial partnership that would build a zone of shared prosperity through the trade and aid relationship detailed above -- it is the second track which has received the great bulk of funding and attention. The lack of progress on the political and security partnership and, in particular, the EU's inability or unwillingness to push for internal reforms in the countries in which it is active, in Syria in particular, has prompted EU Ambassador to Syria Marc Pierini to openly admit that "our record is a mixed one." As Michael Curtis, a spokesman for the European Commission, says, "We regret that the promising start of Bashar Al-Assad's presidency in the human rights field came to a halt in 2001 when a number of opposition personalities were arrested." He adds, "The European Commission will continue to monitor the human rights situation together with member states and to encourage reforms in this area as well as to communicate to the Syrian government its concern, both in relation to individual cases and to the general situation."
Though undoubtedly the Bush Administration is not viewing the Levant market as a top priority amidst the current anti-terrorism maelstrom, once the international chaos subsides and stability returns to the region, it will become clear that the EU has locked down the market there and divided the cake between European firms and their Arab partners. Europe's current laying of the foundation for broad economic cooperation with Syria is premised on its awareness of rich future dividends.
Robin Niblett, a senior fellow at the Centre for Strategic and International Studies' (CSIS) Europe Programme attributes the current tension between the EU and the US to diverging attitudes towards conflict resolution. "The EU sees economic integration within the region and between the EU and countries around the Mediterranean as the surest way of gradually injecting greater stability into this important area as well as relieving some of the pressures leading to economic migration into the EU," he says. "This correlates with the EU's preference for "constructive engagement" not only with countries on its periphery but also in its overall diplomatic relations (Iran, China), in contrast to the US preference to strike more clear-cut diplomatic positions."
The Bush Administration has also been discomfited by Syria's rehabilitation amongst its neighbours. Improving ties between Syria and its four neighbours -- Israel excluded -- have also boosted its regional position. The return to friendly relations with long-term enemies Iraq and Turkey has developed alongside the warming up of ties with Jordan and the consolidation of Syria's occupation in Lebanon. The friendship with Iraq has already borne dividends as Syria counts the revenues from Iraqi oil and cross-border trade, something that, up until two years ago, remained a Jordanian monopoly.
In light of this, and while European firms are establishing contacts and allies in Syria and the European Commission doles out loans, Washington is considering additional sanctions against Damascus. It has imposed controls for US exports and restrictions on trade financing and is considering a bill, labelled the Syrian Accountability Act, that calls for a stiffer sanctions regime that would limit where Syrian officials can travel in the United States and prohibit US businesses from operating or investing in the country. Europe already made clear its opposition to the principle that underlies the legislation when British European commissioner for external affairs, Chris Patten, issued a statement saying that the European Union had long opposed unilateral sanctions laws with extraterritorial effects. Such laws -- designed to impose US requirements on economic operators of foreign countries -- threaten the open international trading system, Patten said. The EU and the US have already clashed over such legislation in Iran and Cuba, both US enemies and EU trading partners.
But Michael Curtis has his doubts that the US will be willing to open another front with its European allies in Syria. "As far as we know, the US has no plans to impose sanctions on third parties investing in Syria -- such as EU companies -- as in the Iran-Libya Sanctions Act or the Helms- Burton Act."
For the time being it is unlikely that the EU and the US will clash over the Levant. According to Niblett, "I do not see the evolution of a confrontational US-EU approach to Syria that would mirror the current transatlantic tensions over Iran. The reason is fairly simple: the EU (and US) have far smaller economic interests in Syria than they do in Iran," he says. "The latter's oil and gas reserves and its geographic location as a transit point for oil and gas exports from the Caspian mean that the economic and hence political stakes are far higher." US attitudes to Syria are more ambivalent and administration officials are cognizant of the fact that despite having hosted groups which Washington has named "terrorist" and given free rein to Hizbullah in the past, Syria is also a necessary partner in any Middle East peace settlement and led by a president who is open to negotiation. According to Niblett, "The US and the EU have too much on their plate right now to fight over Syria."
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