VZCZCXYZ0007
PP RUEHWEB

DE RUEHDM #0598 0441118
ZNR UUUUU ZZH
P 131118Z FEB 06
FM AMEMBASSY DAMASCUS
TO SECSTATE WASHDC PRIORITY 7091

UNCLAS DAMASCUS 000598 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
NEA/ELA 
NSC - EABRAMS/MSINGH 
TREASURY FOR GLASER/LEBENSON 
EB/ESC/TFS FOR SALOOM 
 
E.O. 12958: N/A 
TAGS: ECON ETRD ECIN SY
SUBJECT:  SYRIA JOINS THE UNOFFICIAL DEVELOPING NATIONS GROUP AT 
THE WTO 
 
NOT FOR INTERNET OR WEBGRAM DISTRIBUTION 
 
¶1. (SBU) Summary: On February 6, the SARG announced that it had 
joined the unofficial developing nations group at the WTO, the 
latest in an ongoing campaign to portray the SARG as 
strengthening international economic relationships.  Syria is 
receiving $1.6 million USD in pre-WTO accession assistance from 
the UNDP, as well as technical assistance from the European 
Commission under the MEDA Program (financial instrument of the 
Euro-Mediterranean Partnership) and Institutional and Sector 
Modernization Facility Program (ISMF) to achieve Association 
Agreement requirements and implement institutional reforms. 
However, Syria's latest WTO-related announcement appears more 
politically motivated than reflecting any real commitment to 
liberalize its economy by complying with accession requirements. 
End summary. 
 
¶2. (U) Local press reports on February 6 stated that Syria has 
joined the unofficial developing nations group at the WTO, and 
reiterated Syria's desire to join the WTO and highlighted the 
SARG's commitment to economic reform and trade liberalization. 
Furthermore, the articles in state-controlled media implied that 
Syria's accession to the WTO is a natural step on the country's 
path of economic success, and pointed to Syria's participation in 
GAFTA, the unsigned EU-Syrian Association Agreement, and pending 
free trade agreements with Iran and Turkey. 
 
¶3. (SBU) On December 10, immediately preceding the first of Prime 
Minister for Economic Affairs Abdullah Dardari's repeated public 
comments concerning Syria's pending WTO accession request, the 
SARG and the UNDP signed an agreement to institute a $1.6 million 
project that will assist Syria in achieving its pre-WTO accession 
requirements.  According to one UNDP economist, the 
organization's support to the SARG thus far has been limited, 
citing a seminar for SARG ministers to discuss the challenges of 
WTO pre-accession, a two-day workshop on corruption, and the 
distribution of training kits to the Ministry of Economy and 
Trade that focus on economic liberalization.  These initial 
activities will feed into a larger one-year project that will 
focus on restructuring Syria's legal framework, namely revising 
Syria's competition laws and amending Investment Law Number 10 to 
improve investment incentives and establish standardized criteria 
by which investment projects are approved.  UNDP contacts 
cautioned the SARG that UNDP assistance would not guarantee 
accession to the WTO, and told the SARG that it would need to be 
serious about deepening economic reform and policy implementation 
in order to achieve WTO membership. 
 
¶4. (SBU) Though the European Commission does not have a specific 
project or technical assistance program to assist the SARG with 
its WTO accession goals, the Europeans are supportive of the SARG 
at a technical level under the auspices of helping it comply with 
reform requirements for the EU Association Agreement.  Contacts 
at the EU mission in Damascus have called the Association 
Agreement an "excellent framework" that provides the SARG with 
economic and trade guidelines that are in-line with WTO accession 
requirements.  EU programs have focused primarily on the Ministry 
of Finance and the Customs Department, with technical experts 
providing advice on tax and fiscal reform, public expenditures, 
and customs administration.  The European Commission is currently 
finalizing its latest Country Strategy Paper (under the MEDA 
Program) that will provide assistance to help Syria achieve the 
objectives of the Association Agreement.  Additionally, the EU's 
ISMF is evaluating the SARG's five-year economic plan to identify 
where improvements in Syria's trade legislation can be made.  Our 
EU interlocutors believe that despite Syria's tenuous political 
situation, the EU should continue technical assistance to 
encourage the SARG to reform its economy. 
 
¶5. (SBU) Comment:  The SARG's recent decision to join the 
unofficial developing nations group at the WTO builds on 
Dardari's previous statements asserting that "trade diplomacy" 
with other countries will help Syria gain support in its attempt 
to become a member of the WTO.  The SARG's actual commitment, 
however, to comply with WTO accession criteria is questionable at 
best.  For example, though the SARG has trumpeted its special 
committee to monitor the country's progress in achieving WTO 
accession requirements, contacts at UNDP said that the task force 
has never met and suffers from high turnover.  The announcement 
of Syria's membership in the unofficial developing nations group 
at the WTO is most clearly seen as another example of the SARG 
attempting to convince Syrians that the regime is neither 
economically nor politically isolated.