Israel Matzav

Syria stalling on EU free trade agreement

Syria is stalling on entering into a free trade agreement with the European Union out of fears that it will not be able to compete with European products.

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.

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.

Sounds like Israel 20 years ago. Now we have 'purchase tax' instead of duties to keep prices high. Shh.... Don't tell anyone.

Do I sound cynical about my country's economic policies? Let me put it in perspective: One of the things I brought back from the States was microfiber tights for the two teenage daughters. They were about $6 per pair in the US. In Israel, they are NIS 120 per pair according to the girls - more than $30 at today's exchange rate. Cynical? Me?

But as to the Syrians? Heh.

posted by Carl in Jerusalem @ 4:01 PM