In 2004, the EU total assistance aid allocated to Syria reached €55 million. It was mainly for technical assistance, institution-building and democracy promotion. In the same year, after eight years of negotiations, the EU and Syria finalised an Association Agreement.

The sanctions imposed by the US against Damascus in May 2004, however, influenced some member states' willingness to sign the agreement.

The UK, Germany and the Netherlands' insistence on inserting an additional clause dealing specifically with chemical weapons blocked the overall process. The deal was called off and economic relations continue to be ruled by a 1977 Co-operation Agreement.

So despite Syria being a partner in the Barcelona process, it does not benefit from the European Neighbourhood instruments.

Intensity of relations decreased

While the EU remains Syria's first trading partner, the relationship's intensity has significantly decreased in the aftermath of the US embargo. Far from being passive, Syria has diversified its economic and political relations with third countries. Ankara, already Damascus' second trade partner, has been particularly privileged, as symbolized by the opening of a Free Trade Area at the beginning of 2007.

In the coming years, Turkey could become Damascus' largest trading partner: its exports to Syria have already nearly tripled in the past 10 years, rising from roughly USD 270m in 1997 to over USD 600m in 2006. In addition to that, Turkey has become a political and military ally, the two having signed a military agreement in 2004 aimed at countering the danger of potential spill-overs from Iraq's Kurdish areas.

A catalyst to the Syrian-Turkish rapprochement has undeniably been the US-led war in Iraq. In the run-up to the Iraq war, Ankara even denied US forces access to its military bases.

On the diplomatic front, EU-Syria relations have deteriorated since the assassination of Lebanese prime minister Rafik Hariri in February 2005 and the subsequent accusation that Damascus masterminded the attack.

In the aftermath of the political killing and the 14 March group's protests against Syrian involvement in Lebanese political life, in April 2005 Syrian forces withdrew from Lebanon. However, since then little light has been shed in relation to the killing of the anti-Syrian politician.

After the opposition shown by pro-Syrian forces in the government - Hezbollah and Amal - against the UN Resolution 1595 aimed at establishing a tribunal to examine the circumstances surrounding the assassination, the first political move judged positively by the EU was Syrian acceptance of a reinforced Unifil II patrolling its borders with Lebanon after the summer 2006 war between Israel and Hezbollah.

In an effort to re-ignite political dialogue with Israel concerning the status of the Golan Heights and of the Sheba farms, as well as trying to win over Syrian resistance to the establishment of this tribunal, European foreign ministers have been travelling to the country and holding meetings with senior politicians. To no avail.

An important trade gateway

By acting in an un-coordinated manner, the EU has diminished its overall capacity for influence. Acknowledging this risk, in the spring of 2007, national capitals informally agreed to be represented by the EU High Representative, Javier Solana, towards Damascus. In reality, this has never materialized and foreign ministers have kept visiting Assad without offering either an EU- coordinated long-term strategic vision or real carrots.

The consequences of the US ban have been far-reaching: on the one hand Syria has reinforced political and economic ties with third countries, thereby limiting the potential leverage of the EU. On the other, the sanctions have caused an internal split within the Union with some member states afraid to alienate the US Middle Eastern project. This has had its downside, namely the indefinite postponing of the establishment of an EU comprehensive vision of the region.

To conclude, the costs of envisaging a common approach to Syria's potentially beneficial role in the region would cause irritation in Washington, as well as in Israel, with whom the EU is struggling to improve the tone of the relationship.

A shift from a wait-and-see approach to a pro-active one, on the other hand, would entail significant benefits, both politically and economically.

Economically, Syria is an important gateway for European trade in the Arab world. Politically, reaching an association agreement with Syria remains the main channel through which the EU can hope to influence democratic forces and modernization impulses within the country, by setting clear benchmarks associated to further economic involvement.

Secondly, the same card should be used to forge a common strategic vision over the means the Union is ready to deploy in order to increase Damascus' stakes in developing an autonomous foreign policy in the area, resisting Teheran's influence.

Brussels should not wait to have fully-fledged economic relations before adopting an overall strategic policy towards Syria, but should strive to develop both simultaneously.

The writer is visiting research fellow at the Centre for European Policy Studies