Syria is attempting to restore its trade relationship with Iraq but faces political reluctance from Baghdad. Despite meeting key customs requirements, Iraq demands political stability in Syria before resuming formal trade. Limited exchanges occur, but overall trade has significantly diminished since the civil war, heavily influenced by sanctions and banking obstacles.
Syria is trying to revive its trade relationship with Iraq, which has stagnated due to political indecision in Baghdad. Key border security and customs regulations have been implemented by Syria, yet Iraq has not reopened the border. Ibrahim Shalash of the Syria-Iraq Business Council mentioned that the Al-Bukamal border is ready to receive Iraqi vehicles but remains closed by the Iraqi authorities.
Iraq’s political conditions hinder the resumption of formal trade agreements. Baghdad demands that Syria stabilizes politically before fully engaging in trade, with issues like the absence of banking channels and security concerns stalling significant economic cooperation. Nevertheless, there are limited trade exchanges where Iraq exports food products and industrial goods to Syria, while Syria exports sweets, vegetables, and pharmaceuticals, albeit at significantly reduced volumes.
Trade barriers persist due to US sanctions, like the Caesar Act, impacting Syrian exporters. Shalash stated that the lack of banking cooperation complicates transactions, forcing traders to rely on the black market. Iraq accounted for about 22.7% of Syria’s exports before the civil war, but now those trade levels are nearly depleted.
Historically, economic ties between the two nations have fluctuated due to political upheaval. A notable free trade agreement in 2001 aimed to enhance regional trade but collapsed over the years due to the US invasion of Iraq and subsequent instability in both countries. The two nations’ relations have seen a slight improvement since ISIS emerged in 2014 despite ongoing diplomatic strains.
Shalash argues that Syrian industries are well-positioned with quality products that could benefit Iraqi markets. He emphasized the regional importance of the Syrian industry, stating it has supported the Turkish economy by employing thousands of Syrians in industries predominantly exporting to Iraq.
However, Iraqi officials maintain a cautious approach, with spokesperson Mohammed Hanoun confirming that trade cooperation is contingent on Syria’s political situation stabilizing. The absence of an official banking framework continues to be a significant barrier, forcing reliance on informal transactions with unfavorable rate discrepancies.
Pharmaceutical exports have been particularly impacted, as Iraq recently blocked new registrations for Syrian pharmaceutical companies, citing various concerns. Shalash notes that existing firms registered in Iraq are limited, creating challenges for new operations seeking market entry.
Syria’s strategy hinges on bolstering its economic ties with Iraq to promote recovery. Plans are in motion to restore pre-war trade levels, including improved logistical operations. Hassan Al-Sheikh from the Iraq-Syria Business Council indicated that preparations are in place to resume trade, pending the finalization of border regulations.
Despite governmental hurdles, trade persists to some extent, with Iraq continuing to export various goods to Syria. The primary issue remains whether Iraq will ease trade restrictions or maintain the status quo, impeding Syria’s recovery efforts.
In summary, while Syria seeks to revitalize its trade links with Iraq, several political and economic barriers obstruct progress. Iraq’s concerns over Syrian political stability, coupled with a lack of formal banking cooperation, present substantial challenges. Limited trade continues, but full-scale cooperation is contingent upon resolving these political and logistical issues.
Original Source: shafaq.com
