IMPACT OF BILATERAL TRADE AGREEMENTS ON RUSSIA'S POSITION AS AN EXPORT PARTNER OF SYRIA

Ali Faysal Ebraheem and Sameer Radi Sharaf. Department of Economics and Planning International Relations, Tishreen University, Lattakia, Syria. ...................................................................................................................... Manuscript Info Abstract ......................... ........................................................................ Manuscript History Received: 04 December 2018 Final Accepted: 06 January 2019 Published: February 2019


Syrian-Russian Bilateral Trade Agreements:-Agreement by Syrian-Russian bilateral committee in 2004:-
The Russian-Arab Businessmen's Council and the Federation of Syrian Chambers of Commerce signed an agreement in 2004, called the Russian-Syrian bilateral committee, before the two countries signed a joint declaration on the further deepening of friendly relations and cooperation between the two countries.

Agreement on mutual cooperation and assistance in customs matters between Syria and Russia and other trade agreements in 2005:-
The customs cooperation agreement came after the Syrian president's visit to Russia in 2005, where a customs agreement was signed with the Government of the Russian Federation for mutual administrative cooperation and assistance in the customs matters contained in Legislative Decree 3 of 2015, including technical and administrative cooperation, information exchange, controlled delivery, investigations and information secrecy. The Customs Agreement, at the beginning of its text, presented the main objectives of the Customs Agreement (Syrian Customs: Conventions): 1. Violations of customs legislation are unfair to the economic, social and cultural interests of both countries. 2. Importance of providing an assessment of customs duties and taxes and other expenses in respect of the import and export of goods, in addition to the appropriate implementation of the provisions of banning, restricting the import and export of goods. 3. The necessity of international cooperation in matters related to the application of customs legislation. 4. Efforts to prevent customs violations, could have a more effective impact through cooperation between customs departments of both countries. 5. Reduce illegal trafficking in narcotic drugs and substances, affecting the mind, which pose a danger to public health and society.
Syrian-Russian trade agreement for the exchange of heavy oil with refined oil in 2012 -: On 9-1-2012, four agreements were signed on cooperation in the field of gas and oil and the development of economic, commercial and scientific relations as well as Russia's pledge to support Syria militarily and to stand by its side politically (Maleky, 2015). In Moscow in 2012, Syria signed a bilateral trade agreement with Russia to export heavy oil to Russia for refined oil. The agreement includes Syria's delivery of crude oil to Russia, which is estimated to produce 200,000 barrels of oil per day, in exchange for gasoline and fuel. The agreement is a swap agreement. (Oil & Gas Technology, 2012).

Syrian-Russian memorandum of understanding on the economic customs framework in 2016:-
On May 25, 2016, the Syrian-Russian Joint Committee, which held two posts: Deputy Prime Minister of the Russian Federation for Economic Affairs and Chairman of the Syrian-Russian High Joint Committee Dimitri Rogozin and former Syrian Prime Minister Wael Al-Halaki, reached -during their meeting in the Council of Ministers-to issue a memorandum of understanding on the areas of cooperation in the economic customs framework (Al-furat, 2017), especially in the fields of energy and customs. Signed by the Syrian side: Minister Assistant of Economy and Foreign Trade: Hayyan Salman, and by the Russian side: Russian ambassador in Damascus: The meeting dealt with issues related to the mechanisms of signing a customs agreement. During the meeting, several subcommittees were formed to study all the issues, namely the Foreign Affairs Committee and the Committee on Financial, Banking and Economic Affairs. These committees held several bilateral meetings and presented their proposals, mechanisms and draft agreements to the Higher Committee for approval, in order to enhance the prospects of bilateral cooperation between the two countries (Syrian Ministry of Finance website).

Memorandum of Understanding for Establishing a permanent exhibition of Syrian Export-Products and Syrian House of Businessmen in Russia in 2016:-
A memorandum of understanding was signed to establish a permanent exhibition for Syrian products destined for export to Russia between Syrian Export and Product Support and Development Authority as a first team, represented by the director of the Authority: Mahdi Al-Dali and the Russian company Adyg Yurak. The importance of establishing this exhibition would be marketing of Syrian products. The provisions of the memorandum as followings (Syrian Export and Product Support and Development Authority, 2016).
The opening of the main headquarters of the Syrian House will be within a month from the date of confirmation of the memorandum, where the Russian company will allocate a suitable place with an area of not less than 2000 square meters for the establishment of the headquarters of the Syrian House in the city of Maykob in the Adygeya 333 Republic within the Russian Federation, and properly equipped with basic services and electricity, water and communications infrastructure, as well as the establishment of other branches of the Syrian House within four months, the first will be in other regions such as: Smara -Novorossiysk -Moscow -San Petersburg -Rostov and other cities, where necessary, as well as work on opening branches in the Republic Belarus.
The Russian company provides the necessary assistance to work in the Syrian House in the field of trade and economic information, study the Russian market and exchange of export offers that will develop trade cooperation and achieve economic, commercial and industrial integration between the two countries, and facilitate the procedures of entering Syrian goods and products through shipping, and providing the necessary facilities to obtain entry visas for traders, industrialists, businessmen and workers, and mediate with the relevant Russian authorities to facilitate the management and operation of the Syrian house.
The obligations of the Syrian Export and Product Support and Development Authority are: to supervise the work of the Syrian House, to coordinate with those necessary to provide the Syrian house management staff, to provide necessary assistance in the field of trade and economic information, to study the Syrian market and to exchange export offers, To facilitate and simplify trade procedures. According to the memorandum of understanding, the establishment of the Syrian house helps in: 1. Supporting the signing of deals between Syrian and Russian traders, since the Russian market with its geographical area and economic potential is able to absorb all Syrian products, but in light of the lack of information, there was no good marketing of Syrian products, for that, the Syrian House will be a channel for direct sales to the Russian consumers. 2. Developing the appropriate means and formulas to: stimulate trade exchange, improve the quality of products, increase their efficiency and competitiveness, encourage export-oriented investment and develop economic, commercial and industrial cooperation and integration between the two countries in all possible fields.

Russia as an Export Partner of Syria -Analytical Study-:-Basic statistical measures: -Arithmetic Mean, Standard Deviation and Coefficient of Variation:-
The means of the foreign trade time series variables was calculated to measure the central tendency of these series, while the standard deviation (Stdev) was computed to determine the degree of dispersion of the data from their means. The coefficient of difference (CV) describes the variables from both sides, e.g.: export volatility, this ratio is calculated by dividing the standard deviation on the arithmetic mean, relationships (1), (2) and (3): (2) = (3) Linear correlation coefficient Pearson:-Linear correlation coefficient Pearson (R) was used to measure the degree of correlation between the variables used and GDP at market prices. The coefficient of correlation between variables x and y is given in relation (4):

Coefficient of regression equation ( ):-
The Coefficient of regression equation or Slope ( ) has been used to measure the relationship between independent and dependent variables, for example: measuring the linear relationship between exports to Russia and GDP, in other words determining the response in degree and direction for Syria's exports to Russia as change is made in Syria's GDP. (5) (Al-Suwaidi, 2012): Annual Growth Rate ( ):-The annual growth ( ) rate has been used to compute the evolution of the time series variables, both in terms of values and ratios. The annual growth rate is equal to the subtract value of the variable in the year (i) from its value in the previous year (i -1 ) divided by the value of the variable in the year (i -1 ), and its average value equals to: sum up of annual growth rates of the series over the number of years divided by number of years minus one. Relationships (6) and (7):

Compound annual growth rate (CGR):-
The compound annual growth rate has been used to create a constant annual growth rate that develops the value of the variable in the first year of the series, reaching its value in the last year. It is more reliable than the annual growth rate because it ignores abnormal values in the middle of the series, which may lead to misleading results , When calculating the average annual growth rate as in the relationship (7). The Composite Growth Rate (CGR) is calculated by relationship (8) Where: " ":value in the last year of the time series, " 0 ": value in the first year of the series. symbols used in this study are presented in Table 1: Coefficient of correlation R Rank Rank Syrian export trends and the position of Russia among export partners of Syria:-It is essential to measure the depth of trade relations with Russia, by conducting a comparative study of the volume of trade with it compared to other countries. For a long period of time, foreign trade data were collected with 17 countries, and statistical measures wear calculated, Table 2 showing that: The Position of Russia as an export partner in ranking of the most important export partners: Italy ranked first in terms of Syrian exports with a Mean value of (48207) million Syrian pounds for the series , followed by Iraq, France and Saudi Arabia. While Russia achieved a Low rank 13 th out 17 countries are the most important export partners of Syria. The countries that strengthened their partnership with Syria during the crisis years are: the regional countries: Lebanon, Iraq, Saudi Arabia, Turkey, while Russia ranked 13 th in 2016. According to the above, Russia was not an export partner during the regression of Syrian Economy. For Russia, the slope and the correlation coefficient (b1: 0.00017; R: 0.289) were weak, indicating a slight future improvement in Syrian exports to Russia. The previous analysis could be supported by the graph analysis, (Fig 1) shows the change in Syria's most important export partners, and the position of Russia between them during the period [1997][1998][1999][2000][2001][2002][2003][2004][2005][2006][2007][2008][2009][2010][2011][2012][2013][2014][2015][2016]. In 1997, the top three ranked countries were: Italy, France, Turkey. Russia ranked sixth was relatively advanced. In 2006, previous countries maintained their positions while Russia fell to 12 th place. In 2016, the ranking of the first countries changed to Lebanon, Iraq and Saudi Arabia, while Russia advanced to 10 th place, which is still lagging behind. On average, Syria's export partners are: Italy, Iraq, France, while Russia is in the 13th place. The ranking of the countries could be redrawn according to the net trade balance, to determine countries in which the trade balance goes in favor of Syria,. Table 3 shows this, where, X: Mean export value of the [1997][1998][1999][2000][2001][2002][2003][2004][2005][2006][2007][2008][2009][2010][2011][2012][2013][2014][2015][2016] series by country, M: Mean value of imports of the [1997][1998][1999][2000][2001][2002][2003][2004][2005][2006][2007][2008][2009][2010][2011][2012][2013][2014][2015][2016] series by country, X-M: net trade balance, positive value indicates that the balance is profitable to Syria. Rank: indicates the order of the trading partner. Syria has a profitable trade balance during the period [1997][1998][1999][2000][2001][2002][2003][2004][2005][2006][2007][2008][2009][2010][2011][2012][2013][2014][2015][2016] with six countries out of 17 trade partners, which are: Iraq, Italy, France, Jordan, Germany and Saudi. As for the remaining 11 countries, the balance of trade has negative signs, denoting that it is not in Syria's favor, that includes Russia, which takes the rank (X-M Rank = 16(.

A Comparative Analysis of Syrian exports structure (Overall and to Russia) according to sections and chapters of the International Standard Classification of Foreign Trade Amendment (3):-
The objective of this analysis is to determine the degree of convergence between the structure of Syrian Export in accordance with the international classification (3) and its structure with Russia according to the classification itself. The availability of statistics limits the analysis to 2010, the year where study was able to collect its data according to the double classification criterion (Criterion 1: International Standard Classification (3), Criterion 2: by countries), Table 5 Illustrate the results, and (Fig 3), explains the terms of trade between the two countries:  According to table 5, and (Fig 3), the following results were obtained:

Machinery and transport equipment:
The Ratio of Syrian exports to Russia of this commodity to total export to Russia in 2010 were ( = 4.07%) vs.  relative share of exports of this commodity, but the percentages remain weak, not of relative importance for Syria. The ratio of exports to Russia of this commodity to the total trade between the two countries ( + = 12.32%) was a sign of the superiority of imports on exports of these commodity. Finally, the exports of this commodity to Russia compared to the total exports of the same commodity ( = 0.56%). From the previews results, we can conclude that: The relative importance of Syrian exports to Russia from this high value commodity is Low.

Miscellaneous goods:
Syrian exports to Russia of these commodities in 2010 were ( = 13.48% ) vs. ( = = 7.12%), this shows a superiority to Russia, any way this ratio still Low. The ratio of Russian exports of these commodities to the total trade exchange between the two countries was ( + = 92.99% ), a sign of a superiority of export on import of this commodies. Finally, exports of these commodities to Russia compared to the total exports of the same commodities were weak ( = 0.56%). One inference could be reached from that is: The relative importance of this commodities for Syria is medium, but Russia is not the destination.

Chemicals and related products:
Syrian exports to Russia of these commodities in 2010 were ( = = 7.98%) vs. ( = 6.19%), these percentages are also weak. The proportion of exports to Russia from these goods to the total trade exchange between the two countries amounted to ( + = 7.80%), evidence of the superiority of imports on exports of these commodities. Finally, exports of these commodities to Russia compared to the total exports of the same commodities were low ( = 0.38%). One important reference from above discussion: Although, the importance of these commodity in term of commercial value, but Syria failed to rise up its proportion in export, as well as Russia is not the destination.

Mineral fuels, lubricants and similar materials:
In 2010, there were no exports of fuel to Russia, while the overall standard was ( = 49.89%), i.e., Syria did not benefit from any signed agreement to export mineral fuel to Russia in this, when it was an oil exporter in that period. For imports, the share of this commodity is the highest ( = 71.40%), well above the overall average rate ( = 19.65%). This is evidence of Russia's use of signed economic agreements, to become the first supplier For fuel to Syria, where the proportion of imports of mineral fuels from Russia to total fuel imports ( = 22.94%).

Beverages and tobacco:
Also in the study year, there were no exports of beverages and tobacco to Russia, while the overall index ( = 1.01%), i.e, the two ratios are weak, indicates that the industry is not seriously entering the export market. This is evidence that Syria did not benefit from the signed trade agreements to be a supplier of these commodity to Russia and rest of the world.

Food and Live Animals:
Food and live animals are considered to be relatively low prices. These commodities accounted for a relatively high share compared to the rest of Syria's exports to Russia: ( = 29.13%) vs. the overall index ( = 18.96%).
However, the ratio ( = = 0.45%) indicates that Russia is not the only direction for these commodities, and that it constitutes a narrow market for it. The reason may far distance and its impact as it rise the cost of shipping.

Oils, Fats and Animal and Plant Waxes:
They are also commodities with low relative prices. These commodities accounted for a relatively low share ( = 0.11%), as well as for the overall index ( = 0.82%). Indicating a weak production of these materials, that is, the impact of any bilateral agreements towards raising them will be limited impact. Also, the ratio ( = 0.45%) indicates that Russia is not the only direction for these commodities. 341

Non-Edible Raw Materials Excluding Fuels:
These commodities are included in the last trade list according to the relative price standard. As for Syria's exports to Russia, it was a low percentage ( = 0.70%). The overall index ( = 3.83%) indicates that external world did not attract enough Syrian exports of these commodities. Also, the ratio ( = 0.05%) indicates that Russia is not the only direction for these commodities. Table 5 could be graphically shown using the column chart to facilitate comparison, (Fig 4):

Results of the Study:-
Based on the results of the analysis, the following conclusions could be drawn: There are differences between the structure of the overall Syrian exports and with Russia in 2010 according to the International Classification (3), these differences takes two directions: 1. The share of exports of commodity (x i ) to Russia out of total exports to it, is greater than the overall index, which is consistent with the arbitrage: ( > ). Commodities that achieve this are: manufactured goods, food and live animals, means, Russia is an export partner of Syria in these commodities. 2. The share of exports of commodity (x i ) to Russia out of total exports to it, is smaller than the overall index, which is consistent with the arbitrage: ( < ). Commodities that achieve this are: Mineral fuels, which is a big paradox that the proportion of Syrian oil exports in 2010 about 50%, Russia is not a partner. Russia is not an export partner at all, despite all agreements between the two countries in the oil field for previous periods. The second commodity is raw materials other than fuel, which are goods that do not require competitive advantages and Russia's share should have been greater than that of raw materials. 3. There is a convergence between the structure of the overall Syrian exports and with Russia in 2010 according to the International Classification (3), for the following commodities: Miscellaneous products, machinery and transport equipment, chemicals and products, oils and animal fats, raw materials other than fuel, beverages and tobacco. That lead to an important conclusion that: Syria-Russia bilateral trade agreements do not leave much impact on these categories of goods. From the previous analysis Study Hypothesis states that:" Syrian-Russian bilateral trade agreements have contributed to the improvement of Syrian exports in quantity and quality, so that Russia has become an export partner of Syria". Should be Rejected. We can support that by presenting the trade balance between Syria and Russia for 2010, (Fig 5). It could be seen that the net balance of trade in favor of Russia for all commodities except for miscellaneous products is in favor of Syria at a very small value. The balance sheet for mineral fuels reached -39617.9 billion S.P, and for food and live animals was -4826.2 billion S.P, followed by categories in term of import bill: machinery and transport equipment, manufactured goods, Raw materials other than fuel, and chemicals, while the rest are small and insignificant. 4. Based on monitoring the development of Syrian exports and, the time series   result is: Russia is not an export partner of Syria according to the standard of the ranking of export partners: Not all bilateral economic agreements signed between the two countries, especially the trade ones led to improve the order of Russia as an export partner of Syria, both during the period of economic prosperity of Syria [1997][1998][1999][2000][2001][2002][2003][2004][2005][2006][2007][2008][2009][2010], which was signed 6 bilateral trade agreements with Russia, with Russia ranking 12 th out of 17 countries. Also, Russia is not an export partner of Syria in the period of the Syrian crisis [2011][2012][2013][2014][2015][2016], which was period of signing of trade agreements with Russia, where Russia still came in the ranking 12 th out of 17 countries. First: High price oil: where not all the economic agreements signed in the oil field until 2010, to improve Syria's oil exports to Russia. While the ratio of overall oil exports 50%, The percentage of oil exports to Russia was 0% for 2010. Second: Low Price Food and Animals contributed 29.13% of total export to Russia in 2010. Based on the above, it could be concluded that there is no significant effect of the bilateral trade agreements on creating preferential advantages for Syria. In the end, it should be pointed out that the agreements alone are not responsible for bringing about this change, but rather the production lines in Syria, which are characterized by inflexibility, to the requirements of the export markets. 6. The bilateral trade agreements signed with Russia led Syria to rely heavily on Russian imports to secure the needs of its economy and its citizens, but its preservation of its position during the period of crisis is also due to the suspension of many countries from exporting to Syria because of economic sanctions imposed on them. 7. The trade balance goes in favor of Russia, because the import bill is larger than its export returns. Russia ranked 16 th among 17 countries, according to net trade balance standard. The first ranks showing the net trade balance are positive for the following countries: Iraq, Italy, France, Jordan, Germany and Saudi Arabia. Goods categories that contributed to the net negative trade balance with Russia are: mineral fuels, food, live animals, and manufactured goods.
Recommendations:- 1. Increasing the interest in activating the bilateral trade agreements with Russia, so that its purpose should be to increase Syrian exports to it in a way that maximizes the benefit of Syria from the Russian partner. 2. Studying the needs of the Russian market, and supporting Syrian industries that meet these needs, so that the contributor to increase Syrian exports, not only bilateral trade agreements but the quality of Syrian exports. 3. Working to address the imbalance in Syrian-Russian trade balance, by linking the imports from Russia with exports to it, which contributes to make Russia a real trading partner of Syria.

Conclusion:-
This study reviewed the bilateral trade agreements between Syria and Russia, as well as their impact on the position of Russia as an export partner of Syria. However, these agreements did not contribute to the promotion of this position, due to various reasons, the most important of them was: The weak effectiveness of these agreements in