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Exporting from the north, gain for Syria or Turkey?

Bab al-Salama border crossing with Turkey - November 15, 2017 (Enab Baladi)

Bab al-Salama border crossing with Turkey - November 15, 2017 (Enab Baladi)

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Enab Baladi – Abdullah al-Khatib

Turkey is increasingly importing Syrian food and goods that the cities and regions of the northern countryside of Aleppo are famous for, the most recent of which is shoe shipments, in a precedent that is considered the first of its kind.

The local council in the city of al-Rai, north of Aleppo, announced the export of the first shipment of shoes to Turkey, via al-Rai border crossing, coming from the northern countryside of Aleppo, on January 20.

The head of the Chamber of Commerce and Industry, Hussein Issa, said in an interview with Enab Baladi that partial shipping, i.e. sending small shipments at lower freight rates, will make it easier for the merchants who want to export their products later.

Issa explained that the quantities to be shipped later differ according to the item and whether the goods are intended for women, men, or children, noting that a single carload is estimated at 15,000 pairs of shoes.

He added that the shipping permission is currently limited to exporting transit only, for goods manufactured in the opposition-controlled areas in the northern countryside of Aleppo, stressing the need for the industry partner to be a member of the chambers of industry and commerce affiliated with the aforementioned areas.

According to Issa, the manufactured materials designated for export are required to have a certificate of origin, issued by the local councils of the opposition-controlled areas in the region.

He stated that the goods allowed to be exported are: all wrapped agricultural products, clothes and shoes carrying no international brands, household items (pots, plates, etc…), food products (sweets, Tahiti, etc…), as well as detergents and their derivatives.

Issa considered that this policy will have a positive effect on the north’s economy, leading to the region’s economic independence.

He asserted that the evaluation of the prices is carried out according to the quality of the product, its categorization, and the selling prices in the target market, adding that the shipping fees and the freight charges will be very encouraging, to push industry professionals to produce and provide the best products in the region.

Products exported before the shoe shipments

The export of shoes to Turkey was preceded by the participation of merchants from the cities al-Rai and Azaz, northern Syria, in the shoes and slippers exhibition, which was held in Gaziantep, southern Turkey, on December 15, 2019, reported Anadolu Agency.

Before that, an agreement between the Ministry of Economy in the Syrian Interim Government and Turkey had been signed on January 9, stipulating the export of 20,000 tons of barley grains from the city of Tell Abyad in the northern countryside of Raqqa to Turkey, according to BirGün.

The director of the Turkish Field Crops Departments, Ahmed Goldal, denied while talking to the Turkish newspaper Dunya on  January 10, the import of this quantity, while stressing that his country will not import 20,000 tons of barley but instead 5000 or 10,000 at most. Thus, Turkey has already imported only 60 tons, according to statements translated by Enab Baladi.

The Minister of Economy of the Interim Government, Abdel-Hakim al-Masry told Enab Baladi at the time that the agreement provided for Turkey to import, from Tell Abyad, an unlimited amount of surplus production of barley, excluding wheat from the deal.

According to al-Masry, Turkey will pay 1,100 Turkish Lira per ton for first-class barley, confirming that the price will decrease depending on the quality of the grains.

Turkey will not pay customs fees for entering the barley from the Syrian-Turkish border, nor will it pay for most of the products it imports from the region, according to al-Masry.

Goldal confirmed what al-Masry said, i.e. importing the surplus from the products only after covering the needs of all these regions, stressing that no one can buy this surplus without taxes, except the Turkish Field Crops Departments; and if the merchants attempt to import these goods and products, they will be involved in an import transaction and will be obliged to pay taxes.

In 2018, the Turkish government imported batches of potato shipments from the city of Akhtarin from Azaz. The first batch contained 4000 tons, according to the Turkish Ministry of Finance, which amounts cover 1 percent of the market needs, noting that the imported quantity affected the market, as the price per kilo decreased from eight pounds to two pounds.

The export of the products was initiated after the opening of the border crossings in Jarabulus, Bab al-Salama and al-Rai with Turkey. Thus, al-Rai crossing, which was officially opened in December 2017, is the first commercial civilian crossing in northern Aleppo with Turkey.

Advantages and disadvantages

Dunya newspaper reported, in the same article translated by Enab Baladi, that importing olive oil from Afrin and barley from Tell Abyad will harm the Turkish market, and will also negatively affect the morale of the Turkish producer.

The newspaper quoted a Turkish farmer saying that, despite the ongoing war in Syria for years, Syria is still able to produce its own needs of barley, wheat and olive oil, and also export it. On the other hand, Turkey, which possesses developed agricultural technologies, is not able to produce its needs and resorts to importation.

The Turkish channel İlave Tv surveyed the Turkish street about importing barley from Syria. Some of the respondents supported the Turkish decision as long as Turkey really needs these products, while others opposed it arguing that due to the ongoing war, Syria is unable to cover its needs.

Enab Baladi spoke to the economic analyst, Younis al-Karim, who considered that the reason behind Turkey’s eagerness to import Syrian products is the fact that the Syrian goods, which are not covered by the tax law, cost less than Turkish commodities. Nonetheless, importing through state-controlled crossings is more expensive than importing it through the border crossings in northern Syria, controlled by the Interim Government and Turkey.

Al-Karim stressed that these imported goods will not boost the Turkish economy, but will weaken it instead, as no taxes are required during the process, which makes the Syrian goods less expensive than the Turkish ones. In this sense, the importation of Syrian commodities following this process will curb the Turkish production rates and decrease the flow of foreign currency into the country.

Al-Masry had another opinion on the issue, for he considered that Turkey imports Syrian goods because it really needs it, and this, in turn, will boost the trade of the production surplus of barley and olive oil, as it is exempted from customs. On the other hand, the minister praised the quality of the goods, which encouraged Turkey to import it in the first place.

Al-Masry conveyed that another benefit of these trade operations is motivating farmers and improving the price by ensuring the continuity of production while denying the existence of damages because the goods needed by these regions are not exported, as only the surplus is being exported. He asserted that about 150,000 tons of potatoes were produced, and 25,000 tons of the quantity was exported, while the local consumption is estimated at 50,000 tons only.

He added that the farmer is the one who benefits the most from the process and not the Interim Government, as this contributes to reducing the unemployment rate and improving the standard of living in the countryside of Aleppo, noting that a percentage of customs duties can be collected by the Interim Government and distributed as salaries for government employees and workers.

Economic agreements and plans or individual actions and decisions

Al-Karim said that the northern countryside of Aleppo does not have any party that manages and coordinates the economic file, suggesting that traders behave by their profits, losses and psychological state; i.e. they operate as they wish without a prior planning by the opposition’s institutions, which are focussing more on the political and military files at the expense of the economic side.

Al-Masry explained that despite the absence of an official trade agreement between the Interim Government and the Turkish side, there are memoranda of understanding, coordination, and cooperation, which are designated to determine the goods that can be exported and imported.

He noted that the Interim Government is working to conclude future trade agreements with the Turkish government to improve the conditions and encourage trade exchange, stressing the need for continued cooperation between the two parties.

There are also joint committees that coordinate movement and customs duties, while the Interim Government and the General Directorate of Customs oversee all operations in coordination with the Turkish side, according to al-Masry, who considers that these operations constitute an epitome of the Interim Government’s vision and economic plan and not individual decisions or some resolutions made by the local councils.

For his part, Younis al-Karim disagreed with this opinion, as he considered that the local councils of the Interim Government are taking very dangerous economic decisions, due to the lack of desire to rely on experts, while describing such decisions as improvisatory and based on subjective wishes rather than the objective reality on the ground.

Materials allowed and banned from exportation?

Minister of Economy provided Enab Baladi with a list of the goods for exportation and others, which are not allowed to be transported across the Syrian borders to Turkey.

The food list allowed for transit and export included: anise, barley, sunflower oil, almonds, beans, wheat, nigella, bay leaf, cumin, cherry, coriander, mahlab, lentils, chickpeas, cotton, rice, garlic, sesame.

Other materials currently entering the Turkish territory are shoes, clothing, soap, and purine.

Whereas, the list of articles that were prohibited from transit from Syria to Turkey, fixed on September 20, 2019, includes: sunflower, sunflower button, metal scrap, lentils, olives, olive oil.

According to al-Masry, the list of exported goods can be expanded, explaining that the currency approved for these commercial transactions varies from the dollar to the Turkish lira, following who is importing the commodities from Syria. Thus, there is no specific currency to be imposed.

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