Business and FinanCe

riding the wave of sanctıons on syria
John Dagge reporTs From Damascus

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atcheting up the US economic embargo against Syria has become a cornerstone of George Bush’s Middle East policy. Yet despite an ever expanding raft of sanctions intended to put an economic sleeper hold on Damascus, trade between Syria and the US grew by more than 7% last year to hit $471.9m. American exports, targeted by a heavy sanctions regime, surged by a massive 61% to top $361.4 million last year, the US Census Bureau figures show. Indeed, US exports to Syria have more than doubled since Bush came to power, rising from $226m in 2000 to $361.4m in 2007. Over the same period, US imports from Syria – not banned under any sanctions regime – have fallen from $158.7m in 2000 to $110.5m in 2007. Syrian-US trade is certain to be higher than official figures show, given that Syrian traders can easily source US goods through neighbouring countries including Lebanon and Dubai. Taking a walk through Syria’s fashionable shopping districts, you would be hard pressed to know that the country is subject to a heavy US trade embargo, with American icons such as KFC, iPod, Ford and GAP increasingly available to a Syrian public hungry for foreign goods. The US trade embargo becomes all the more questionable when US-Syrian trade volume is compared with that of Damascus’ high profile ally Iran, a relationship that produces increasing angst among key regional and international players. For all the hype of the Syrian-Iranian economic relationship, trade volume between Damascus and Tehran stood at $200m last year, less than half the amount of US-Syrian trade. Even US-Iranian trade eclipsed Damascus-Tehran in volume, weighing in at $318.8m, with the US importing around $173.2m of goods from the Islamic
The Middle easT May 2008

Republic, only slightly less than Syria. All of which has many questioning the validity of the US economic embargo against Syria, especially given its failure to change Damascus’ policy on key regional issues like Palestine, Lebanon and Iraq. “US trade sanctions have not decreased US exports to

Syria, but have backfired in terms of public diplomacy and opened the door for Iran and other states to capitalise on Syria’s growing economic opportunities,” Andrew Tabler, a former fellow at the Washington-based Institute of Current World Affairs, said. “Recalibrating trade sanctions would be

US TRADE WITh SyRIA
Millions us dollars

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one of the first intelligent things the US has done on Syria in a long time. It would allow the US to use its private sector to engage Syrians and become involved and to learn a little bit from the process.” Syria has long operated under some form of American embargo. Syria became a founding member of the US State Department’s ‘State Sponsors of Terrorism’ list in 1979 and remains its longest serving member. Exports of dual use items such as electrical components and software were banned and American aid to the country, active after the 1973 October War, was cut. The prohibition on economic assistance also extends to international organisations like the World Bank. Although the State Department acknowledges Syria has not been directly implicated in a terrorist act since 1986, the country’s ongoing support for groups like Hizbullah, Hamas and Islamic Jihad has ensured its continued classification as a state sponsor of terror. Relations thawed in the early 1990s when Damascus used her influence to end the civil war in neighbouring Lebanon and,

Despite the growing trade volume between Syria and the US, US sanctions have not been without effect, with contstruction, natural gas and aviation hardest hit
more crucially, supported the US-led coalition to oust Saddam Hussein’s forces from Kuwait. Trade and investment followed, with US oil giant ConocoPhilips investing $500m in a joint oil and gas project. America’s second war against Saddam brought such limited cooperation to a halt when Damascus refused to support the venture. Syrian opposition to the war resulted in Bush signing the Syrian Accountability and Lebanese Sovereignty Restoration Act (SALSA), passed to “address the Syrian government’s support for terrorist groups, its continued military presence in Lebanon, its pursuit of weapons of mass destruction, and its actions to undermine US and international efforts with respect to the stabilisation and reconstruction of Iraq”. The act outlined six broad penalties against Syria and compelled the Bush administration to choose a minimum of two within six months. These included a ban on all US exports to Syria expect food and

syrian presiDenT bashar al assad: his country has long operated under some form of us embargo even though the state Department in washington acknowledges it has not been directly implicated in a terrorist act since 1986

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