Since the two sides have eased trade barriers, including a
bilateral FTA signed in 2005, Syria has been hit by an onslaught of exports
from neighboring Turkey. Turkish exports to Syria have quadrupled in the five
years and in 2009, Syria ran a $756 million trade deficit with Turkey.
"Turkey has a competitive edge in light industries,
such as textiles and food processing that will make it especially hard for Syria
to compete," Marcus Marktanner, an assistant professor of economics at the
American University of Beirut said in e-mailed remarks to The Media Line.
"Opposition to the union from the business sector is strongest
there."
The FTA drive comes as Prime Minister Recep Tayyip Erdogan
and his Islamist Justice and Development Party lead a strategic rebalancing
away from Europe and the West toward closer ties with the Mideast.
Omer Tasp?nar, director of the Turkey project at the
Brookings Institution, told a conference last month that Islamic solidarity was
less a factor than economics in Turkey's new strategy, calling it a
"mercantilist driver." Once ignored by Turks in favor of Europe,
exports to the Middle East have grown to about 20 percent of Turkey's total. In
return, Turkey relies on energy from Iraq and Iran to power its factories.
For now, however, the FTA will encompass the smaller and
less critical economies of Syria, Jordan and Lebanon. Turkey's gross domestic
product was $615 billion last year, almost six times the combined economies of
its three partners. Dubbed by The Economist as the "China of Europe,"
its manufacturers turn out everything from automobiles to t-shirts for the
global market.
The World Economic Forum's Global Competitiveness Index for
2010-11 ranks Turkey at 61. That is relatively low, but above that of its FTA
partners. Jordan comes in at 65, Lebanon at 92 and Syria at 97, according to
the WEF. Jordan ran a $325 million trade deficit with Turkey last year and
Lebanon had a gap of $413 million, according to Turkish trade figures.
For Turkey the four-country FTA won't have much of an
economic significance unless it expands to include the region's big energy
exporters, Saudi Arabia and Iraq, said Harun Ozturkler, an expert on Middle
East economies at the Ankara-based Center for Middle Eastern Strategic Studies
(Orsam). He said Turkey's main goal was to show the European Union it had
alternatives to membership while giving Turkish voters a reason not to worry
about the long time it is taking to join the EU.
That, however, will offer little consolation for a country
like Syria, whose economy is not only small but also weighed down by heavy
state intervention.
Along the Syrian-Turkish border, relaxed controls have
created a flood of travel and trade, but the International Crisis Group in an
April report cited unnamed Syrian officials as worrying about how much commerce
worked in Turkey's favor and fretting whether northern Syria may slip into a
Turkish sphere of influence. Fouad Al-Jouni, Syria's industry minister, said
last month that Turkish imports by last year began to curtail what he called an
economic boom.
Turkey is aware of the threat economic integration poses to
the economies of the Arab world. But Ozturkler said the FTA would correct the
imbalances in the long run.
Years ago, many Turks opposed closer trade ties with Europe,
he noted, but in the end freer trade helped Turkey to develop and modernize.
The same opportunity to use integration as a springboard for growth and reforms
can be exploited by Turkey's Arab trade partners, Ozturkler said. Turkey aims
to lead the region into undertaking the economic liberalization it has long
resisted, he said.
"They are going to suffer from the Turkish exports, but
in other ways — politically — they'll benefit," Ozturkler told The Media
Line.
