While the United States is trying to hem Syria in, Europe is opening new doors to the Arab country.
“By alienating Syria, the US will soon realise that it is losing an important regional player in the pursuit of stability in the region, whether in Palestine, in Iraq or in Lebanon,” said Nabil Sukkar, a former senior economist at the World Bank.
Sukkar now heads the Syrian Consulting Bureau for Development and International Investment in Damascus.
“The sanctions are meant to hurt Syria but the US, acting alone and failing in its policies in Iraq, wanted a scapegoat and wanted to blackmail Syria,” he said.
However, by doing so Washington has “ended up shooting itself in the foot”.
In early October, the US House of Representatives overwhelmingly endorsed the Syria Accountability and Lebanese Sovereignty Restoration Act to sanction Syria.
The measure was in criticism of Syrian support of groups such as Hizb Allah, Hamas and Islamic Jihad, and its alleged quest to develop weapons of mass destruction.
The 398-4 vote made clear that Syria also had to withdraw its estimated 20,000 troops from Lebanon and cease its illegal trade in oil and weapons with Iraq – a demand that has become redundant since Saddam Hussein’s fall from power.
The legislation must still go before the Senate where it seems likely to pass with little difficulty and then be signed into law by US President George Bush.
The bill gives the White House a range of options for sanctioning Syria, including restricting US business investment and exports (except food and medicine).
“By alienating Syria, the US will soon realise that it is losing an important regional player in the pursuit of stability in the region, whether in Palestine, in Iraq or in Lebanon”
It also downgrades Washington’s diplomatic representation and imposes travel restrictions on Syrian diplomats in the United States.
The proposed legislation also bans the export of “dual-use” technology, and allows the US government to freeze Syria’s assets in the United States and restrict over flight rights for Syrian aircraft inside American airspace.
Trade between the two countries is relatively low at $300 million annually. Moreover, Syria, long on the US State Department list of state sponsors of terrorism, is subject to a number of existing US sanctions imposed in the mid-1980s.
Jihad Yazigi, editor of the Paris-based Syria Report, said that while the effect of the sanctions on the Syrian economy as a whole would be minimal, the information technology sector would feel the pinch.
“Existing US export restrictions on high-tech products have prevented the shipment of equipment from Sun Microsystems and this has created delays in the development of the internet infrastructure,” he said.
Some Syrian officials have claimed that Americans will be the big losers, pointing out that US firms have invested in Syria’s oil sector.
Sukkar concurred, saying, “US companies would lose out to EU and Asian companies in bidding for contracts in Syria, especially in the oil and gas sector.”
Only Israel publicly welcomed
One Arab economist working with the World Bank said on condition of anonymity that he doubted US oil firms would leave Syria any time soon “because the Bush administration is an oil administration, stacked with people with connections to the oil industry.
“I can’t see the administration upsetting the oil industry. Perhaps the White House will find a loophole in the Syria Accountability Act or put it in the drawer until after the 2004 presidential elections,” he continued.
“The Act is just a form of leverage, and not very strong at that, because the Syrians aren’t that concerned about it,” the source added.
For the past six years, Syria has been negotiating a partnership accord with Brussels and is inching closer to sealing the deal, one of several similar pacts between the 15-nation bloc and its Mediterranean neighbours for the creation of a free-trade zone by 2010.
Syria is the only participant in the Barcelona meeting that has yet to sign an Association Agreement.
“When Syria signs the accord it will officially become a ‘partner’ of the European Union,” Yazigi explained.
“That gives it a very strong card and certainly a minimum protection against the US. It is no surprise that the Syrian president has instructed his negotiators to speed up the talks and reach a deal as soon as possible.”
After he took office in 2000 following the death of his father, Bashar al-Assad announced a wide-ranging programme of reforms, but economists have said the pace of implementing reform has been slow.
Moreover, both Sukkar and Yazigi said the increased pressure from Washington would adversely affect al-Assad’s bid to liberalise the economy.
“Traditionally, the more external pressure was exerted on Syria, the more difficult it has been to conduct reform both politically and economically,” Yazigi said.
“This is somehow curious as you would expect a country with few allies abroad to try to gather broader internal support. Syria should seize its different domestic and external challenges to make a real leap forward in its reform drive.”
Sukkar says sanctions will strengthen the hand of the hard-liners in Syria and will not serve the cause of promoting reform in the country.
With the US stepping up its rhetoric, the EU pushing for reforms and internal Syrian opposition to instituting changes, these are tense times for Damascus.