I wrote a soc.history.what-if post on thie subject bavk in 1999:
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In 1963, there were talks on a Syria-Iraq union, the Ba'ath party being
in control of both countries. Whatever chance there was for unity was
lost on November 18, 1963 when the Iraqi Ba'athists were overthrown by
General Arif. When in 1968 the Ba'athists regained power in Iraq, there
not only was no unity, but relations between the two countries sharply
deteriorated. One reason is that the Iraqi Ba'athists' leadership (Ahmed
Hassan al-Bakr and his relative Saddam Hussein) had been selected by the
old "National Command" of the Ba'ath (led by Michel Aflaq, who had
founded the party), and the National Command had lost power in Damascus in 1966.
So the question is, had the National Command stayed in power in
Syria, would there have been a union after 1968? I doubt it, at least
whether there would have been a lasting union. By 1968 it was apparent
that Bakr and Saddam Hussein, even if originally designated by Aflaq et
al, were more Iraqi nationalist than Arab nationalist. The Syrians for
their part remembered the way Egypt had dominated the UAR and had in
effect treated Syria as a mere province. This made them reluctant to get
into any more unions with more powerful nations.
In any event, after 1963 the Syrian military was largely dominated by
religious minorities (especially Alawites like Assad) who had reason to
be suspicious that any Syria-Iraq union would be dominated by Sunnis.
After years of bitter recriminations between the two Ba'athist regimes,
there was again talk of unity in 1978-79. This was the result of Camp
David, which had put the Syrian regime in a dangerous position--it could
no longer count on Egyptian help against Israel. A "Charter of Joint
National Action" was arrived at, and a joint defense pact was supposed to
"provide the groundwork for complete military union." But nothing ever
came of this--Syria wanted military support from Iraq, including the
financing of arms purchases, but not any merger of the two armies. Syria
also balked at unifying the two Ba'ath parties. Furthermore, the Iraqis
wanted a unitary state; the Syrians nothing more than a loose federation.
Finally, the Iranian revolution gave the Syrians an alternative to an
alliance with Iraq. Soon Iraqi-Syrian relations returned to a state of
open conflict.
One final point on the "unity" moves of 1978-9: both superpowers opposed
them (as did most Arab regimes). The US viewed a union of two "radical"
Arab states as a threat to Israel and to Western interests in the Middle
East. More interesting is that the USSR while not opposed to better
relations among its Arab allies, opposed any close union. Evgenii
Primakov, then director of the Institute for Middle East Studies at the
Soviet Academy of Sciences warned at the congress of the (pro-Assad)
Syrian Communist Party in early 1979 that any such union would entail
increasing openings to the West. What he did not say, but doubtless had
in mind, was that a union of the two countries would have enhanced their
bargaining power vis-a-vis the USSR.
For a detailed discussion of the Iraq-Syrian conflict, see a book on
which I have heavily relied here: Eberhard Kienle, *Ba'th v. Ba'th: The
conflict between Syria and Iraq 1968-1989 (1990).
https://groups.google.com/d/msg/soc.history.what-if/WStKhCu8UPo/8CwKWLMvqb4J
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Anyway, the important thing to remember IMO is that Iraq, as by far the stronger of the two countries, would dominate any "union" with Syria--as Egypt had dominated the UAR. Which is why Syria never wanted anything more than a loose confederation.