The European Union (EU) auto manufacturing industry has a good chance to grab more market share in Syria following a newly signed wide-ranging association agreement, slashing steep duties imposed on EU-made auto exports.
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Syria already imports a significant number of EU-made cars: according to the ACEA (European Automobile Manufacturers Association) in 2008, 7,241 (EUR106m worth) cars and SUVs were exported from the EU to Syria and this year, 3,427 (worth EUR52m) were sold from January to June. Also, in 2007, 10,354 (worth Euro137m) were sold; and in 2006, 9,769 units netting Euro 129 million were sold by EU exporters.
ACEA communications director Sigrid de Vries told just-auto: “Syria is a small market, but there is a lot of parallel import of new and used cars, light commercial vehicles (LCVs) and trucks.” She noted Syria was not part of the Agadir Agreement (Morocco, Tunisia, Egypt and Jordan) trade bloc, but is has good trade relations with its neighbour Turkey and “gets a lot of cars from Eastern Europe”.
This political and free trade deal was initialled by the EU and Syria in 2004, but its formal approval has been held up by diplomatic complications. However, the EU has now formally approved its terms, although ratification is still required. This will require European Parliament approval – MEPs rarely hold up such deals – and Syrian ratification: Damascus has been pushing for the deal, so this can be anticipated, unless diplomatic complications emerge again.
Once in force, the agreement would see the Syrian government phasing out some steep tariffs on EU-made automobiles and major parts or components. Syria currently levies 40% duty on EU-manufactured cars, vans and SUVs. Also 40% duties are levied on EU exports of car bodies and chassis without engines (with cylinders not exceeding 1.6L) and 60% for those with larger cylinders. And 20% duties are levied on EU exports of chassis with engines for cars, bumpers, brakes, drive axles, wheels, radiators, mufflers, clutches, steering wheels, and safety airbags. Smaller duties will go too. For instance, 5% Syrian tariffs on EU-made car transmission shafts, cranks, bearing housings, gear boxes, clutches and shaft couplings, lead-acid batteries, car indicator lights, lamps, windscreen wipers, defrosters and demisters; and 1% on EU-made lorry and bus transmission shafts, cranks, bearing housings, gear boxes, clutches and shaft couplings.
The smaller Syrian duties (up to and including 3%) will disappear on ratification. The larger ones will be phased out over three years for duties of 5% and 7%; six for 10% and 15%; and 12 years for 30%, 40% and 50%.
As for the EU’s protective duties, it already allows most automobile imports to enter its 27 member states duty free, potentially benefiting Syria-based plants of Iranian car manufacturer Saipa. Syria exports a tiny number of cars to Europe: 35 cars and SUVs to the EU in 2008; and just eight from January to June this year, said ACEA. The EU’s liberal policy covers parts as well, although the EU does impose a 3.7% duty on special purpose motor vehicles, such as breakdown lorries, crane lorries, fire fighting vehicles, concrete-mixer lorries, road sweeper lorries and spraying lorries; and 4.5% on bodies (including cabs) for motor vehicles.
An EU Council of Ministers communiqué said the agreement would “establish conditions for the progressive liberalisation of trade in goods, services and capital” between the EU and Syria.
