International trade in Syria is highly regulated through a combination of tariffs and non-tariff barriers. At 8 percent on average, effective tariffs are relatively low. However, non-tariff barriers to trade actually make Syria’s trade restrictiveness very high. Non-tariff barriers to trade take two forms: quantitative restrictions (QRs) and technical barriers to trade (TBTs). QRs are mostly negative import lists and licenses that restrict imports of certain products to selected entities. Comparing world and domestic prices of imports indeed suggests that non-tariff barriers increase the domestic prices of imported goods by an average of 19 percent, and tariffs add another 8 percentage points. The objective of this paper is to estimate the costs of QRs on the Syrian economy using a computable general equilibrium model (CGE). Our simulations indicate that welfare gains resulting from a complete removal of QRs range between 0.4 and 4.8 percent of GDP, depending on the extent of technological upgrading triggered by greater competition and access to foreign markets and technology. Furthermore, our results suggest that eliminating quantitative restrictions to trade could potentially have a large impact on households’ purchasing power and Syria’s output. The removal of non-tariff barriers would also favor particularly the private sector and initiate a shift of financial and human resources towards it. State-owned enterprises would not necessarily lose from the reform in absolute terms; this depends on the extent to which the removal of QRs could entail a modernization of the Syrian economy, notably through the acquisition of adapted foreign technologies. In the event, State-owned enterprises could indirectly benefit from a higher demand for their products and maintain their levels of activity and employment.
