DAMASCUS, Syria, Aug. 7 (UPI) -- Syrian businessmen are confident the United States won't keep them away from the Iraqi market and break more than five years of close trade ties that flourished under deposed Iraqi President Saddam Hussein.
Despite Washington's anger at Damascus' support for groups such as Hamas and Hezbollah, the businessmen believe Syria is an important gate to secure trade with Iraq. Although not the only route, it remains one of the cheapest and shortest.
"Syria is an essential and very important gateway to all goods from Western Europe and even the United States," Rateb Shallah, president of the Damascus Chamber of Commerce, told United Press International.
Shallah argued that moving goods to Iraq from Syrian ports on the Mediterranean "decreases time and transportation cost." Using the Suez Canal to reach Jordanian ports "means longer routes and more taxes."
"It's worst through the (Jordanian) port of Aqaba because the merchandise will have to first cross the Suez Canal and then be transported by ship, cars and trains to reach Iraq," he said.
Syria, he explained, was the shortest route where merchandise could be transported by train or trucks.
A prominent Syrian businessman, who refused to be identified, said U.S. threats to isolate the Arab country and deprive it of trade ties with neighboring Iraq was "mere barking that does not scare Syria."
"They (the United States) know well that our country is not (like) Egypt, Jordan or Kuwait and are aware they need us because of our long (500-kilometer eastern) border with Iraq," said the businessman, who is known for his expanded trade ties with Iraq.
He said the United States needs "our services and cannot but deal with us because of our geographical location -- if they want to move goods in the shortest time and at 10 percent less."
Badr Tohme, a member of the Damascus Chamber of Industry, said the U.S. threats were part of "pressures" exerted on Syria since the fall of Baghdad to keep Syria away from Iraq.
"Let them try and they will see if they can disengage trade between Syria and Iraq. They will be the first losers," Tohme said.
Syria has become Iraq's primary trade partner in the past five years since both countries reopened their border in mid-1997. Syria gradually replaced Jordan, which serviced the Iraqi economy during the 12 years of the U.N. embargo and the Iran-Iraq war.
The reopening of the Syrian-Iraqi border after 20 years of closures due to political disputes between the rival Baath parties helped reactivate the stagnant Syrian market.
As a result, Syria's revenues reached $5 billion a year, including $1 billion secured by transporting Iraqi oil via the Syrian pipeline that links Kirkuk to Banias.
Iraq pumped its oil via Syria without U.N. approval and the outside the oil-for-food program -- a move that continued until the United States captured Baghdad.
"The Americans will be forced to reoperate this pipeline," said the Syrian businessman.
But a Western diplomatic source denied such a move, saying, "There is no need because there is one oil pipeline that goes through Turkey and another via the Umm al-Qasr port, in the south."
Both pipelines were used to transport Iraqi oil during years of tension with Syria in the 1980s.
Tohme said all border points -- which Syria closed, under pressure from Washington, to prevent it from helping the collapsed Iraqi regime and sheltering its leaders -- were now reopened.
He said Syrian merchants can cross into Iraq through the al-Tanaf, Bou Kamal and Yaarouba border posts and "only need a passport that is checked by the Syrian and Iraqi border employees on both sides of the frontier."
Shortly after the fall of Baghdad last April, U.S. forces allowed the flow of goods from Syria without customs fees for six months.
Restrictions on Iraq's imports were also removed after Saddam's ouster.
At present, Syria imports from Iraq "dates and chemical materials that are used in the production of detergents and paint," Shallah said.
He said Iraqis were buying from Syria "equipment banned under Saddam's regime, such as air conditioning units, satellite dishes and receivers, mobile phones and some electrical units."
He could not give an exact figure for the present volume of trade between the two countries but emphasized the deals were restricted to the Syrian private sector.
Tohme, who was among the main exporters to Iraq, referred to previous contracts that were concluded with the Baghdad authorities to export medicine and ambulances from Sweden and Germany through Syria.
"These contracts were suspended as a result of the war," he said.
He added he recently visited Iraq where he met with "the official in charge" and whom he described as an Iraqi who was brought back home by U.S. forces after having lived abroad for 20 years.
"There is a need for medicine (in Iraq) more than before," Tohme said. "We discussed such a need and the previous contracts. We are now in negotiations about how to send these medical products and how to be paid."
Payment appears to be a problem as there were no Iraqi banks to help cover such contracts.
That's why, Tohme said, Syrian and Iraqi businessmen discussed the establishment of "a joint bank in a free zone" to be set up soon between the two countries.
Trust and "word of honor" were more important.
"We know and dealt with the Iraqi businessmen for five years. Such links still exit after the fall of (Saddam's) regime," Shallah said. "We export our products because we trust them despite (the fact) that banks in Iraq are not operating in a regular way and have no mechanism to finance such business."
Syrian businessmen hope they would be able to take part in the reconstruction of Iraq and remain in constant negotiations with their Iraqi partners.
Shallah said he was aware that Iraq's reconstruction will be handled by multinational companies and most contracts will be concluded in favor of U.S. firms.
"But such contracts need sub-contractors to implement the reconstruction projects. Iraqis will then have the priority, and we are considering the establishment of joint Syrian-Iraqi and Lebanese-Iraqi companies to participate in the reconstruction," he said.
A trade source, who refused to be named, said the almost complete control by Saddam's regime of the Iraqi market in the past "reduced the number of top Iraqi businessmen and turned them into small merchants."
"They would surely need the help of the Syrian companies which they trust more than others and which know how to run such a business," the source said.
Syrian businessmen do not hide their fear of investing in Iraq under the prevailing circumstances of chaos and lawlessness despite their big desire in doing business in such a big market.
Still, lack of security has not seemed to obstruct negotiations between Syrian and Iraqi businessmen intent on forming joint companies, mainly in the health and pesticide sectors. Additionally, Syria plans on developing its rail networks, making it easier to transport good from the coast to Iraq.
Last week, it inaugurated the Rabia railway station on the far eastern border between Syria and Iraq to transport goods twice a week. Passenger service is planned at a later stage.
Syria, Iraq and Turkey have also signed an accord to reoperate an 48-mile railway linking Nusaibin on the northern Syrian front with Turkey and Yaarouba on the Syrian-Iraqi border.
"Syria will then become an essential point for the passage of goods from Europe via Turkey to Iraq in the coming phase. It will be a golden opportunity for export," concluded Iyad Ghazal, an official of the Syrian Railway Department.