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SYRIA: Renewed U.S. sanctions highlight confused Washington-Damascus ties

May 5, 2010 | 10:47 am

Syria money When President Obama announced the renewal of sanctions against Syria earlier this week, he accused it of posing an "extraordinary threat" to American security and interests, leading many to question whether the White House is abandoning its policy of engagement with Damascus.

But at the same time, the U.S. quietly withdrew its long-standing opposition to Syria's bid to join the World Trade Organization, which finally granted Syria observer status on Tuesday as a first step toward membership.

"The U.S. is following a policy of carrot and stick," Nabil Sukkar, a former top economist with the World Bank and director of the Syrian Consulting Bureau for Development and Investment, told Babylon & Beyond from Damascus. "It is engaging in dialogue on one side and exerting pressure on the other."

The sanctions are neither crippling nor unexpected. Syria's economy has grown an estimated 4% to 5% since 2003 under those same sanctions, leading many to see them as a political tool rather than a serious attempt to inflict damage.

Syria's deputy foreign minister, Feysal Mekdad, said the sanctions are merely for show, telling the newspaper Al Watan "what is happening behind closed doors is the exact opposite."

In any case, the sanctions "have not had much of an impact on the Syrian economy since the U.S. and Syria do not have much in the way of economic relations – investment, trade or direct aid," Sukkar said. 

"On the other hand, sanctions have a psychological impact on other non-U.S. partners who find themselves reluctant to deal with Syria in order not to antagonize the U.S.," he said.

But the announcement of sanctions and Obama's harsh rhetoric represent a marked setback from just a few months ago, when rapprochement appeared rapid and inevitable. Back in July, the U.S. administration signaled it was willing to ease restrictions on certain goods, especially those related to civil aviation and information technology. In February, Obama nominated Robert S. Ford as the first ambassador to Damascus since 2005.

But relations have soured over Israeli allegations that Syria transferred long-range Scud missiles to the militant group Hezbollah in Lebanon. Syria has denied these claims, and the U.S. has neither confirmed nor rejected them.

Despite Obama's recent harsh words for Syria, which have provoked fears of a possible regional war with Israel, Sukkar says Washington's tough stance is part of a wider regional strategy.

"It's part of showing [Israel] that we are exerting pressure on one side against Iran and Syria, but at the same time we’d like you, Israel, to make concessions and accept a settlement freeze," he said. "I don’t see it as a diplomatic setback."

– Meris Lutz in Beirut

Photo: A bank teller counts Syrian money. U.S. sanctions have had little effect on the economy, which continues to grow. Credit: Louai Beshara / AFP/Getty Images