The proposal of common market among Syria, Lebanon, Iraq and Iran: investigating opportunities for agricultural trade

The proposal of common market among Syria, Lebanon, Iraq and Iran: investigating opportunities for agricultural trade

2011 and 2012 witnessed a series of trade, financial and economic sanctions against Syria in the course of the crisis that has been hitting the country. The main characteristic of these sanctions is that they were imposed by Syria’s traditional trading partners (i.e. Arab countries and the EU).

These developments stimulated economic analysts and decision makers to revisit Syria’s trading directions, and look for strengthening trade relations with other partners who maintained their economic relations with Syria during the crisis.

This paper looks into the possibility of establishing a common market, that comprises of Iran, Iraq, Syria and Lebanon. These four countries form an extended geographically region that has important and multiple economic qualifications.Its potential bilateral trade is still largely unexploited. 

Recommendations:

  • establish a free trade area that comprises each of Lebanon, Iraq and Iran besides Syria, as a first step towards establishing a common market when its prerequisites are met. Iraq would be the most important trade partner for Syria in such market; therefore, it should be focused on for now
  • such a market would afford the so-called economies of scale, which reduce the production costs and increase the competitive advantages of the region’s products

  • in the context of Syria's current circumstances, which may be unfavourable of speaking seriously about the common market, it is preferred to advance bilateral trade with each of the three countries. This would make common trade cooperation in favour of the proposed common market once circumstances allow approaching it seriously

  • it is advised on the short term to increase the exportation of cheese and pastry to Lebanese markets; and apples, tomatoes, cheese and pastry to Iraqi markets; as well as cotton lint to Iranian markets

  • it is also useful in the long run to plan for exporting cereals (if it makes sense) to Iraq, and citruses, particularly oranges, to Iran. Nevertheless, how to improve the competitive conditions for these two sectors in the two markets should be researched; the complementarities between the structures of Syrian production and the demand in the two markets are still not sufficient

  • in the framework of scientific research, reasons behind the regressive trend of terms of trade with Iran during the last decade should be addressed, and relevant resolutions and suggestions to hinder and stop this tendency should be investigated. In this sense, it is likely that this situation is driven by a lowering of the quality of some Syrian agricultural exported commodities, particularly in light of the results brought by the PCI

  • this paper has focused on the benefits that Syrian agricultural sector would gain from a presumable common market; nonetheless, it hasn’t covered the benefits that the other three countries would gain from such a common market. Therefore, there is a need to conduct future studies, preferably regional studies, on the gains that the other three countries would achieve, and consequently to generate a comprehensive image about the potential benefits for the region entirely from such a market

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