Syria hopes that Iraq election results – due today – will usher in a government open to increasing trade. Previous attempts to boost economic ties were marred by Iraq's assertion that Syria was behind devastating 2009 bombings.
With a struggling economy in the painful throes of economic liberalization, diminishing oil reserves, and a rapidly growing population pushing up the unemployment rates, Syria is in need of economic props – and trade and investment in Iraq could be a major one of them.
Iraq is already an important trade partner – the primary destination for Syrian exports, according to 2008 figures from the European Union – but historically tense relations between Damascus and Baghdad have capped the exchange below its potential.
Syrian-Iraqi trade reached $800 million in 2009, but that is still lower than trade prior to the 2003 invasion of Iraq, according to Syrian officials.
“There have been real missed opportunities,” says Peter Harling, the Damascus-based analyst for the International Crisis Group. “It is absurd that economic relations between Syria and Iraq aren’t better, because the potential is huge for both countries. It would also increase Syrian buy-in to stability in Iraq.”
If Baghdad’s new regime is willing to turn the page, Syria is interested in acting as a gateway between Iraq and Europe as reconstruction efforts gather pace. A train line between Iraq and Turkey via Syria, which opened in February this year, was seen as a boost to the trade potential.