DAMASCUS Syria and the European Union (EU) on Monday opened a new round of talks on an association agreement aimed at creating a joint free trade zone and political dialogue, Reuters quoted officials as saying.

The session, which will for the first time focus on the free movement of goods and economic and social cooperation, was cochaired by Tawfiq Ismael, Deputy Syrian Planning Minister and Peter Zangl, head of the Mediterranean Public Relations Department at the EU Commission.

Planning Minister Issam al-Zaim, who is supervising the Syrian-EU negotiations, told Reuters he expected considerable progress during this session.

But he would not say whether a final agreement would be signed before the end of the year as the EU's Commissioner Romano Prodi had expected during a recent visit to Damascus.

Syrian economic sources expressed doubts that all issues concerning the agreement would be settled before the end of 2001.

Syria started negotiations with the EU to sign the association agreement in 1998. A free trade zone would be created between Damascus and the 15-member bloc as soon as the agreement is signed.

The deal will replace the bilateral agreements between Syria and each of the EU members.

Zaim said the National Committee which has been assigned to follow up the negotiations has already adopted a strategy for the association and prepared a working paper that would be presented to the meeting.

"We are entering this round of talks with a positive spirit and great hopes to achieve considerable progress on our efforts to reach a balanced deal," he said.

"We will start discussion of major and important issues at this session and we hope to get a positive European response," Zaim said.

He said Syria would demand the inclusion of agricultural products in the goods that would be freed as a result of the association deal and not to limit the removal of the customs tariffs to industrial goods as Europe was seeking.

Mohammed Tawfiq Simaq, head of the Industry Committee and a member of the team negotiating the association agreement with the EU told Reuters the Syrian side would brief the EU with its plan to reform the industrial sector.

He expressed hope the EU would help finance the plan which calls for the investment of $5.66 billion to qualify the Syrian manufacturing industries to compete with those of the European Union (EU) when both sides sign the association deal.

Simaq also said Syria would call for a larger share the EU's financial aid to the region to give Damascus "a portion that goes in line with its important role in the area."

He said that Syria's share of the EU's aid to the region during the period 1990-1998 which totalled $24.4 billion stood at 1.2 percent only.

Simaq said that Syria would also call during the meeting for greater European funds to be invested in the country either as joint projects or as fully European enterprises.