Posted by Joshua on Monday, July 2nd, 2007
The US government continued its campaign to sanction Syria by adding well established German firms to a blacklist because they do business in Syria, which is considered a sponsor of terror. Siemens, one of the firms blacklisted, is refitting high voltage transformers throughout the country to help upgrade the electrical grid. Syria has been plagued by electricity cuts over the last few weeks, because of heat waves and low water flow in the Euphrates.
Nevertheless, US trade with Syria tripled from 2005 to 2006.
The US imports over 10 times as much from Syria as does Iran. Total exports to the Unite States stood at SYP 10.45 billion (USD 209 million) and to Iran at only SYP 890 million (USD 17.8 million).
Syria’s total foreign trade volume rose to USD 20 billion in 2006, an annual increase of 12 percent, according to preliminary estimates from the Central Bureau of Statistics.
Exports rose to USD 10.1 billion (+19 percent) while imports reached USD 10.62 billion from USD 10.04 billion in 2005 (+5.7 percent).
Italy is Syria’s main export market and bought 20 percent of all the country’s exports (USD 1.979 billion). France is Syria’s second client, (USD 889 million; 8.81 percent of total exports), followed by Saudi Arabia, Iraq, the United Kingdom, Jordan, Egypt, Lebanon, Spain, Turkey.
Main export destinations (2006; USD, million) Italy Source: Central Bureau of Statistics (Thanks to Syria Report)
Source: Central Bureau of Statistics (Thanks to Syria Report)China is Syria’s main supplier. Total imports from China reached USD 691 million. Egypt in #2 at USD 553 million, South Korea USD 441 million, Italy at USD 356 million, Turkey at USD 338 million, Japan at USD 317 million and Germany at USD 308 million.
Syria is strengthening ties with China, which sold very little in Syria in 2000. Although China is Syria's main supplier of imports, it is not its largest trade partner, which is Italy.
In general Syria is moving trade from the West to the East.
You can see from the chart copied below that Syria's share of imports from the EU have fallen by 15% from almost 50% to 35% over the last 3 years.
Syria's share of exports to the EU has fallen over 17%.
German Siemens, Deutsche Bank, BASF Included in U.S. SEC Blacklist, 2 July 2007, German News Digest
U.S. Securities and Exchange Commission (SEC) has published a list of companies active in countries sponsoring terrorism, it was reported on July 2, 2007. Among other foreign companies, the list includes German electronics and engineering group Siemens, chemical and pharmaceutical group BASF AG, as well as banking group Deutsche Bank AG (DB). Among the sponsors of terrorism SEC has listed Cuba, Iran, North Korea, Sudan and Syria.
Data from the US Department of Commerce (USDC) shows that trade between the two countries increased three fold in the last six months, i.e. the last quarter of 2006 and the first of this year, compared to a year earlier. In the last quarter of 2006 total trade volume between the two countries reached USD 217 million from only USD 43.4 million in Q4 2005, while in the first quarter of 2007 it reached USD 144 million from USD 72 million in the same period of last year. As a total, in the last six months, trade between Syria and the United States stood at USD 361 million, from USD 116 million in last quarter of 2005 and the first of 2006. USDC does not provide a breakdown of trade items for these last two quarters.
Syria is looking to further strengthen its ties with Beijing to open up new markets and to encourage even higher levels of investment from China.
On June 26, the final session of the Third Sino-Syrian Joint Committee in Damascus saw the signing of a series of agreements, which included a document setting out terms of co-operation for economic and trade efforts at the international level and the activating clauses of previous investment and economic agreements in the fields of higher education, transport and communications.
The agreements, signed by Syria's Deputy Minister of Economy and Trade Ghassan Habash and Assistant Minister of Commerce Chen Jian on behalf of China, also foresee the extending of the terms of earlier agreements and a further opening up of trade opportunities between the two countries.
Syria announced that it had officially recognised China's market economy status, a move that strengthens Beijing's hand in the international trade arena. By granting market economy status, Damascus accepts that China has minimised state funding, prohibits monopolies and met other criteria established by the World Trade Organisation. In particular, market economy status helps protect a country against anti-dumping claims, something China has often been accused of.
"The recognition indicated that both Syria and China would develop bilateral economic and trade relations in accordance with the World Trade Organisation standards, which is bound to have a positive impact on future economic cooperation between the two countries," Chen said.
Although the two have had diplomatic ties since 1949, following the Chinese revolution, Syria's trade relations with China really took off after President Bashar al-Assad visited Beijing in 2004.
Since then, bilateral trade has skyrocketed to $1.5bn last year, with officials tipping this to double by 2011, a far cry from the $100m of 2000. China has also become Syria's biggest imports partner, with $691m worth of Chinese goods and services being exported to Syria in 2006.
One of the proposals put forward during Chen's visit was to establish a Syrian-Chinese bank, a step that would facilitate joint ventures and investments in Syria by Chinese firms.
Deputy Prime Minister for Economic Affairs Abdallah al-Dadari used the delegation's visit to call for more Chinese companies to invest in Syria. The areas of particular interest are the industrial, information technology, petrochemicals, agriculture, textiles and energy sectors.
It is a call that has already been heeded. Chinese firms have a strong presence in Syria, much of it in the energy sector. One of the most high profile investors is the China National Petroleum Corporation (CNPC), which, in late 2005, joined forces with its partner, the Oil and Natural Gas Corporation of India, to buy a stake in the Al-Furat oil and gas fields in a $573m deal. CNPC is also involved in developing the Kbeibe oil field in Syria's northeast.
China also has investments in Syria's cement, fabrics and agro-industries, giving it one of the more diverse spreads of foreign direct investment in the country. While Syria is a source of raw material, especially cotton that China needs for its increasingly dominant textiles industry, China has the technology that Syria has needed to upgrade and expand its industrial base.
Syria’s trade with the EU (million euros)
|Exports||3 072||2 553||2 987||3 459|
|% of total exports||60.3||44.5||43.6||42.8|
|Imports||2 205||2 345||2 774||2 899|
|% of total imports||49.0||36.5||34.3||34.2|
Sources: Central Bank of Syria and DG Trade/ European Commission (Thanks to Syria Report)
EU to grant Syria EUR 130 million in 2007-10, The Syrian Report, 02 July 2007
The European Commission will be offering EUR 130 million in grants to Syria in the coming four years according to Vassilis Bontosoglou, Ambassador and Head of the EC delegation in Syria. The money will be mainly used to support the country's reform agenda, assist Syria in its transformation into a social market economy, prepare it for the terms of the Association Agreement with the EU and for accession to the World Trade Organization..The EC's operations in Syria focus mainly on capacity building, the transfer of know-how and technical expertise. During the period 2007-2010 the EU will therefore grant Syria an average of EUR 32.5 million a year, which represents a 30 percent increase over the amounts allocated in 2006 and 2005 (around EUR 25 million each). The level of EU grants reached a peak in 2004 (EUR 55 million), the year the AA was initialled, and in 2000 (EUR 49.7 million), when President Bashar Al Assad took over power. Syria and the European Union initialled an Association Agreement between them in October 2004 (Read Syria, EU initial Association Agreement)..However, the agreement never entered into force because of the strained relationship between Syria and some EU countries, in particular France, which followed the extension of the mandate of Lebanon’s President, Emile Lahoud, in the fall of 2004 as well as UN resolution 1559, which asked Syria to withdraw its forces from Lebanon. "Our cooperation with and support to Syria is not restricted to the finalization of the AA," Mr Bontosoglou told The Syria Report.