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The Impact of Syrian Trade
Policies on Agricultural Trade
Performance
Basheer Hamwi
Preface
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
Syria is a key country in the Middle East
region for its strategic geographical location.
Relative commercial advantage
Total area: 18.5 million ha (5.9 million
hectares are cultivable - irrigated area 1.4
million ha, 24%)
Introduction
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Gradual economic reforms (open up its domestic
markets)
Reforms covered all Syrian economic sectors
–
–
–
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foreign trade liberalization
adoption of market mechanism
integration with world economy
Trade liberalization
–
–
–
promote exports
stimulate economic growth
increase social welfare and reduce poverty
Policy Framework Reconsideration
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Substantive reforms in the last few years (macroeconomy and
agriculture)
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enhancing the competitiveness of Syrian economy by improving
the legislation environment
Macroeconomic policies
–
fiscal and monetary policies (exchange rate/currency regulations)
investment policies
trade policies (custom duties and procedures, trade agreements
and negotiations)
insurance policies
banking and credit system
–
private sector liberalization
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–
–
–
Fiscal and Monetary Policy Reforms
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Harmonization and stabilization of the exchange rate
Establishment of private and Islamic banking
systems
Setting up of private insurance companies
Modernization of the taxation system
Introduction of several financial services (electronic
signature, electronic money exchange, etc.)
Investment Policy Reforms
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Investment law n. 8/2007 (more incentives
and additional guarantees and exemptions
from taxes)
Opening up sectors for investments
(stimulate
economy
and
encourage
investments)
“one window” system to facilitate procedures
to implement new projects.
Customs Policy Reforms
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Customs law n. 38/2006
Abrogating barriers on customs clearance,
simplifying customs procedures
Rationalizing tariff system, reducing charges
on imports and activating free zones
Exempt primary goods and inputs from
custom fees
Trade Policy Reforms
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Rapid trade reforms in the last decade
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–
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remarkable evolution
significant simplification of rules and measures
Abolishing work in certification for imports or exports
Hastening the execution of electronic trade
Simplifying import requirements, phasing out import
restrictions, relaxing import ban list to allow import of
new commodities
Eliminating all restrictions on exports and exempting
agricultural exports from taxes
Reforms Concerning Agriculture
Sector

Gradually relaxed control on:
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–
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–
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cropping pattern,
output pricing,
access to imported inputs
marketing arrangements
All exports of agricultural products exempted from
income and production taxes
Non-tariff import constraints removed
Agricultural imports’ ban list is reduced
Trade Agreements for Economic
Reform
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Bilateral, regional and multilateral agreements with commercial
partners
The Great Arab Free Trade Area (GAFTA) highly facilitates
Syrian market access and trade with member countries (17
countries)
–
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significant increase in trade with the Arab region
Syria implemented free trade agreement with Turkey and
signed many trade agreements with other countries
The initiating of Association Agreement with EU and
preparation for joining WTO evolved the reforms for better
The Impact of Policy Reforms on
Economy
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Improvements in macroeconomic policies advanced
and supported growth
Economic growth in this decade soundly higher than
past
Growth consistently averaged at about 5%
Indicators of good performance:
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–
–
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–
low budget deficits
relatively low inflation rates
stable exchange rates
adjustment of foreign debt
liquidity surplus in national banks
Impact of Policy Reforms on
Investments
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Reforms aim at making Syria attractive to investors
1991–2006
–
–
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3824 investments projects (employed 220 thousand person)
in 2006 alone, 351 projects (161 in agriculture)
2001-2005 investment growth rate was 7% (21% of
GDP)
Foreign investment in 2005 was at 1.4% of GDP
Impact of Policy Reforms on Trade
Performance
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Trade liberalization, simplification of custom procedures,
modification of custom tariffs and implementation of trade
agreements
–
–
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boost in foreign trade (major expansion of export and import
performance)
international trade to meet local needs
1997-2006: average annual growth rate was 16%
2006: US$ 20.7 billion (12% increase with respect to 2005)
1997-2006: average annual increase of contribution to GDP
28%
2006: 61% of GDP
Total Trade /GDP
Total trade/Total GDP
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0
-79 ‫متوسط‬
99
2000
2001
2002
2003
2004
2005
2006
Impact of Policy Reforms on Total
Imports and exports
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Rapidly evolved since 2001 and almost doubled in
2006
1997-2006: total import raised annually by 15%
(from US$ 4 to 10.6 billion)
Last five years: total imports accelerated by 20%
annually
Syria recorded impressive gains in total exports and
sharply increased its presence in the Arab market
(implementation of GAFTA)
2001-2006: export value doubled, from US$ 5.3
billion to US$ 10.1
Total Trade, Import and Export
developments
T otal
Ex port
(E)
25,000
20,000
T otal
Im port
(I)
15,000
10,000
T rade
balance
(E-I)
5,000
0
-5,000
2004
2005
2006
T otal
T rade
Volum e
(E+I)
Impact of Policy Reforms on
Agricultural Trade
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Agriculture sector is one of the largest
contributors to GDP
Major role in the Syrian economy
Major beneficiary of trade liberalization policies
and agreements with trade partners
Trade of most agricultural products constantly
increased
Agricultural trade rose rapidly, climbing more
than US$ 883 million (94%) during 2000-2006
Million US$
The Evolution of Agricultural Trade,
2000-2006
2000
1800
1600
1400
1200
1000
800
600
400
200
0
2000
2001
2002
2003
2004
2005
2006
Impact of Policy Reforms on
Agricultural Imports
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Expansion of agricultural import encouraged
through many legislative regulations
1997-2006: agricultural imports almost
doubled from US$ 293 million to US$ 580
million
2000-2006: Agricultural imports increased by
more than 61%
1400
1200
1000
800
600
400
200
0
Av 97-99
Po
w
ge
de
ta
r
bl
e
oi
ls
O
il
se
ed
So s
yb
ea
n
Te
a
Ve
ilk
M
ai
ze
M
ga
r
Av 04-06
Su
Thousand Tons
Evolution of Some Agricultural Imports
Impact of Policy Reforms on
Agricultural Exports
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Steady growth in production (policies
promoting investment and competitive
environment in agriculture)
2000-2006: Agricultural exports raised by
14% annually to more than US$ 1.2 billion
(outstanding increase compared to most
products in the other sectors)
700
600
500
400
300
200
100
0
Av 97-99
te
d
Fr
ui
ts
oe
s
Se
le
c
to
m
at
um
in
C
t
he
a
W
oi
l
ol
iv
e
p
Av 04-06
sh
ee
Tousand Tons
Development of Some AgriculturalExports
Impact of GAFTA on Total and
Agricultural Trade
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GAFTA implementation gave more favorable access
to Arab markets
Trade boosted in both imports and exports
2000-2005: total trade with GAFTA from US$ 1.1 to
US$ 2.7 billion (about 20% annual increase)
2005: Agricultural trade with GAFTA as a share of
total agricultural Syrian trade amounted to 37%
Improvement of Total and Agricultural
Trade with GAFTA
3000
million US$
2500
2000
1500
1000
500
0
2000
2001
Total Trade with GAFTA
2002
2003
2004
2005
Total Agricultural trade with GAFTA
Impact of GAFTA on Total Imports and
Export
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2000-2005; imports from GAFTA from US$
0.4 billion to US$ 1.3 billion
last five years
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imports from GAFTA 26% growth (21% from the
rest of the world)
exports to GAFTA 15% growth (US$ 1.3 billion in
2005, 7% of total export)
million US$
Total Imports and Total Exports to
GAFTA
1800
1600
1400
1200
1000
800
600
400
200
0
2000
2001
2002
Total exports to GAFTA
2003
2004
2005
Total imports from GAFTA
Impact of GAFTA on Agricultural
Imports and Export
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Agricultural import was particularly stimulated
by the elimination of tariffs on agricultural
products in GAFTA member countries
2001-2005: Agricultural import from GAFTA
tripled from US$ 85 million to US$ 270
million
Last five years: Agricultural exports more
than 12% increase to US$ 228 million
Agricultural Export to GAFTA and to
the Rest of the World
Conclusion (1)
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In the last decade, Syria has changed its economic
strategy and committed to liberalize its economy and
open up sectors to further integrate with the world
market.
This resulted in great transform toward trade
liberalization and called for considerable adjustments
in the legislative structure
Syrian economy underwent big changes in the
regulations governing almost all economical sectors
As a result, the economy, the investments and the
trade have greatly improved
Conclusion(2)
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The implementation of the GAFTA regional
agreement has greatly affected the total and
agricultural trade positively
Signing the Association Agreement with EU and the
application to join WTO accelerated trade reforms
and thus Syrian trade were substantially improved
Agriculture sector was the most beneficial of trade
liberalization. This was reflected in its advanced
trade performance
Than you for your
kind attention