Assessing EUSyrian Association Agreement AA in agriculture

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Assessing EU-Syrian Association Agreement (AA) in
agriculture

• Damascus
• 12 January 2002
• GCP/SYR/006/ITA - FAO-Italy Government
  Cooperative Program
• Assistance In Institutional Strengthening And
  Agricultural Policy
• José Mª García-Alvarez-Coque
• Professor of Agricultural Economics

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Some facts of Syrian-EU agricultural trade

• A North-South pattern of trade
• Only 15 percent of Syrian exports to EU are
  processed products. Over 87 percent of Syrian
  imports from the EU are processed products.
• Little specialisation on the EU
• Agricultural exports account for only 5 percent
  of Syrian exports to the EU.
• 15 percent of Syrian agricultural exports go to
  the EU, 50 percent to Arab countries.

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Some facts of Syrian-EU agricultural trade

• Little product diversification
• 5 products account for 90 percent of Syrian
  exports to the EU. Out of them only potatoes show
  a positive development.
• Little presence of high-value products
• Of Syrian agricultural exports to EU 73 cotton,
  5,8 fruit and vegetables, 0,4 olive oil.
• Other Mediterranean countries 55 fruit and
  vegetables, 8 olive oil.
• Syrian export composition is consistent to a
  distorted EU tariff structure.

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Agriculture and the Association potential gains

• Syria shows comparative advantages in a number of
  products compared to other Mediterranean
  Countries.
• But Syria is under-represented in EU markets.
• Any departure from the traditional flows could
  entail significant gains for Syrian agricultural
  trade.
• There is a large margin of increase of European
  Investment in the Syrian Agri-food sector .

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Some issues of the Association

• The special treatment of agriculture in the
  Barcelona process.
• The potential costs of the reciprocity.
• The political constraints
• 22 Southern European regions specialized on
  Mediterranean products with relatively low levels
  of EU support.
• Eastern Enlargement and financial constrains.
• The Association should be envisaged as a
  long-term process of constant negotiations.

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Imperfect liberalisation or what other AAs show

• Tariff reduction without restrictions.
• Tariff reduction within tariff quota or fixed
  reference quantities.
• Possibility to increase tariff-quota and
  reference quantities in the five years after
  signature.
• Possibility to implement reference quantities if
  imports threaten to cause difficulties.
• Exceptions to the entry price system
  applicable for fruit and vegetables.
• Flexible seasons.

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Large market access and low costs are not a
guarantee for export success

• Competitiveness depend on
• Quality standards and grading
• Human skills
• Marketing organisation
• Macroeconomic impacts on trade and investment
• General regulatory framework
• 10 retailers account for 40 per cent of food
  distribution in the EU. Marketing costs account
  for 2/3 of the final price

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Policy implications

• Options for negotiation
• Trade reform does not imply full trade
  liberalisation.
• Transition can be long but clearly scheduled.
• Joining international cooperation networks
• Clear commitment for MEDA program. Agricultural
  support program. Agricultural policy unit
  supported by the Institutional and Sector
  Modernisation Facility (ISMF)
• Strengthening technical capacities. Trade reform
  and rules of origin. Preparation of international
  negotiations. Environmental and quality
  Standards. Management of the foreign marketing.

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Beyond the fears

• Association as a process that goes beyond trade
  liberalisation.
• Future plays in favour of globalisation
• CAP reform and new role of rural regions.
• Finding opportunities according to levels of
  development.