JORDANIAN PM'S VISIT TO SYRIA: "SOME POSITIVENESS"

C O N F I D E N T I A L SECTION 01 OF 02 AMMAN 007200

SIPDIS

E.O. 12958: DECL: 08/26/2014
TAGS: ETRD ECON JO SY
SUBJECT: JORDANIAN PM'S VISIT TO SYRIA: "SOME POSITIVENESS"
ON THE ECONOMIC FRONT

REF: DAMASCUS 05064

Classified By: CDA David Hale, Reasons 1.5 (b) and (d)


1. (C) SUMMARY: Jordan's Deputy Prime Minister and
Minister of Industry and Trade said the recent Jordanian
visit to Syria found "some positiveness" on most economic
issues, especially on trade. Jordan's main interest on the
economic side was getting Syria to implement agreements
already in place. Regarding the Jordanian trucks seized by
Syria for allegedly carrying Israeli goods, the Deputy Prime
Minister said the problem was now a customs matter.
Assessing his counterparts, Halaiqa said the Syrians had some
good ministers, particularly those of Economy and of Finance,
and that he felt that a number of top officials on the
economic side were frustrated with the current state of
affairs in the Syrian government. END SUMMARY.


2. (U) Prior to departing for Syria, Prime Minister Faisal
Fayez billed the trip as primarily focused on economic and
trade issues (see septel for a readout on security and border
issues.) He told the Jordanian press that the delegation he
would lead to Syria would call for implementation of the
Jordan-Syria Free Trade Agreement, designed to lift gradually
all tariffs on agricultural, animal and industrial exports
and imports between the two countries. In addition, there
would be discussions on the gas pipeline, which currently
supplies Jordan with Egyptian gas and which is scheduled to
be extended to Syria by early 2006.


3. (C) On August 24, Charge called on Deputy Prime Minister
and Minister of Industry and Trade Mohammad Halaiqa who
described the visit. Halaiqa had been the senior economic
minister on the Jordanian delegation led by Prime Minister
Fayez. The delegation included Minister of Water and
Irrigation and Minister of Agriculture Hazem Nasser, Finance
Minister Mohammad Abu Hammour, Justice Minister and Minister
of State for Cabinet Affairs Salah Bashir, and Interior
Minister Samir Habashneh. Halaiqa said the Jordanian mission
had found "some positiveness" in Syria on most issues,
especially on trade. Jordan's main goal on the economic side
had been to seek Syrian implementation of agreements already
in place.


4. (C) Halaiqa said that Jordan succeeded in reducing the
number of Jordanian goods Syria had kept restricted under the
Syria-Jordan trade protocol from 10 or 11 to just two or
three. He said Syria was still being held back by its desire
to protect its state-owned enterprises.


5. (C) Referring to the confiscation of Jordanian trucks
for allegedly carrying Israeli products, Halaiqa said the
problem was now "a customs matter." He explained that the
goods seized were Italian and had been imported through Haifa
for a U.S. military contractor in Iraq. Unable to cross the
border for unknown reasons, the drivers headed to Syria in
order to attempt to enter Iraq from there or Turkey. The
notable Hebrew markings on the trucks led to their detention
in Syria. Halaiqa added that smuggling and cross-border
trade in general were on the agenda of the talks.


6. (C) With respect to his counterparts in Syria, Halaiqa
said that there were good ministers in Syria on the economic
side, particularly the Ministers of Finance and Economy. He
did sense frustration on the part of some of his counterparts
about the lack of real progress on many issues by their own
government.


7. (C) Halaiqa explained that the Jordanian delegation had
been broadly based at the request of the Syrians, who were
seeking to learn from the Jordanian model of economic reform
and trade liberalization. Both sides had agreed on a
follow-up visit at a lower level. Referring to his recent
visit to Ireland on an AID-supported visit to assess
Ireland's investment promotion successes, Halaiqa said he
told the Syrians they needed to go to Ireland too to learn
from the Irish model.

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COMMENT
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8. (C) Syrian-Jordan trade remains modest. The goods being
traded are mainly foodstuffs, mechanical equipment, and
apparel. Over the last ten years, Jordan has imported
annually any where from $44 million to $153 million in goods
from Syria, with totals fluctuating substantially from year
to year. Jordan's exports to Syria have been even more
modest, ranging from $3 million to $14 million over the past
ten years. The figures look more balanced over the first
five months of this year, with $85 million in Jordanian
imports from Syria versus $76 million in exports to Syria.
Nevertheless, expanding this continued low level of trade was
one of the goals of the Jordanian mission.

9. (SBU) Regarding smuggling and cross-border trade,
familial bonds across this border have long been strong.
Jordan hosts a group of Syrian families who left Syria during
the first half of the last century. Although all are now
considered full Jordanian citizens, many still have family
ties in Syria. Most lost everything when Syrian governments
nationalized their businesses, but talent and trade networks
allowed most to rebuild their fortunes. They include
prominent families like the Bdeir, the Taba'a, the Humsei,
the Al-Jabri and the Malas.


10. (U) Baghdad minimize considered.
HALE