Outline:- 1. Jordan’s History * Country * Society 2. Economy * GDP * Budget * Development Planning 3. Government and Politics * The Constitution * The King * The Government 5. Foreign Trade Policy * Relations with major Countries. * Jordan and Arab Countries. * Jordan and its relations with WTO. * Jordan partnering with OIC ( Organization Of Islamic Conference). * Jordan’s Free Trade Agreements with various associations and countries. 7. Current Status and Future Plans 8. Conclusion History
Jordan is a small Arabic country located in the southwest Asia and has common borders with Syria from the north, the West Bank (Palestine) and Israel from the West, Iraq to the east and Saudi Arabia from the south and south-east.
It also overlooks the Gulf of Aqaba in the south-west. The capital of Jordan called Amman and the major cities are Irbid, Az Zarqa, Madaba, Karak, Mafrag and Aqaba. The Major language in Jordan is the Arabic language, English considered as the Second language. . The area of Jordan is almost (89. 287) km 2. The estimated population of Jordan is 6,342.
000. 1. million Of the population are from Palestine, who are immigrant. In addition half a million of the population are from Iraq. This is almost more than one third of the total population of Jordan are composed from Immigrants ,in addition, there are some other two small groups, these group are composed of Circassians and the Armenians, both groups account for less than 3 percent. This has a major influence in the social environments of Jordan. For example, the original residences of Jordan were surviving on agriculture, but the cost of living in Jordan has risen due to the huge number of the immigrants.
The Jordanian citizens start to migrate to the major cities looking for a job that can cover their living expenses. Also migrate to Jordan adding the problem of Unemployment. 92% of the Jordanian population Belong to Islam while a member of the 6% remaining to Christianity, and the other remaining 2 % belong to other communities (caste Shiite and Druze). Jordan’s name refers to Jordan River that separates the west bank (Palestine and Israel) and the east bank which belonged to Syria and Saudi Arabia before Jordan was a country in 1921.
The former name of Jordan was Transjordan until the King Abdullah the first officially changed the name to the Hashemite kingdom of Jordan in 1949. Jordan’s formal name is Hashemite Kingdom of Jordan. Following World War I and the dissolution of the Ottoman Empire, the UK received a mandate to govern much of the Middle East. Britain separated out a semi-autonomous region in the early 1920s , Jordan was under British supervision until the end of World War II. Jordan independence was in 1946 with the end of British, the country adopted its name Jordan in 1950.
In 1951, Prince Talal became the king of Jordan after his father’s death in 195i, he amended the Constitution of Jordan, it was issued in 1952, which stems from the Islamic values and democratic principles that implied by the civilized nations of the world. The country long time ruler was King Hussein (1953-99). He successfully navigated competing pressures from major powers like (US, UK, USSR), various Arab States, Israel and large internal Palestinian population. Jordan lost the West Bank to Israel in 1967 war and barely managed to defeat Palestinian rebels who threatened to overthrow monarchy in 1970.
In the eighties Jordan embraced the two important Arab summits in 1980, and began the joint Arab economic, which encouraged the need for reform in the economic sectors in the Arab countries. The second in 1987, and this worked to re-join Arabic forces. King Hussein in 1988 permanently relinquished Jordanian claims to the West Bank. In 1989 he reinstituted parliamentary elections and initiated gradual political liberalization Parliamentary life has not stopped ever since, successively holding the parliamentary elections with the participation of all political trends in an atmosphere of genuine democracy.
This allowed political pluralism and freedom of expression and political participation and address the authorities. The political parties were legalized in 1992. In 1994 he signed a peace treaty with Israel, which returned the rights of Jordan in the land and water, also drew clear final borders of the state of Jordan with Israel. King Abdullah II son of King Hussein took over the thrown after his father passed away in Feb 1999. Since then till date he has consolidated his power and undertaken an aggressive economic program.
Jordan acceded to the WTO in 2000 and began to participate in European Trade Association in 2001. In 2003, Jordan unwaveringly supported the Coalition ouster of Saddam in Iraq and following the outbreak of insurgent violence in Iraq absorbed thousands of displaced Iraqis. Municipal elections were held in July 2007 under which 20% were reserved for women. Parliamentary elections were held in 2007 and Jordan saw a independent pre-government candidates win the vast majority of seats.
In Nov 2007 The King Abdullah instructed his new Pri-Minister to focus on socio-economic reform, developing a healthcare and a housing network for civilians and military personnel, and improving educational system. Economy The Jordanian economy has witnessed significant developments during the past four decades, it‘sGDP growth was higher than the natural growth of any state of non-oil developing countries, the GDP rose from (200) million dinars in 1964 to (9012) million dinars in 2005, based on the Central Bank reports.
This growth refers to many considerations and a variety of reasons, some due to natural developments of the national economy and investment activity development, especially as the country experienced during this stage establishing and developing the infrastructure of the Jordanian State, roads, water ,sewage, power plants, communications and others. Others reasons directly related to the coercive migration after the Third Gulf War, which resulted in return of about a quarter of a million Jordanians working in Gulf countries, and transfer their savings to Jordan and spent it to invest in Jordan or to purchase property.
In addition, Jordan attracts Arabic and foreign investors by offering them granted facilities. Other reasons that have helped Jordan to attract the investor are the stability of Jordan, the availability of the local inexpensive skilled labor, and so on. Jordan also the advantage of the reception of Arab citizens and investors because of the exceptional circumstances and the wars in the region, whether in Iraq or Lebanon, all of these reasons combined accounted for attraction the investors, which contributed to the development of the economy and increase it during this historical period.
Taking into consideration the amount of aid received by Jordan, whether through Arabic support after the Arab summit in Baghdad or the Iraqi oil grant or foreign aid, as well the remittances of the Jordanians who live outside the country. Jordan considered as poor country if we look outside Amman the capital, 40 municipalities out of almost 100 country municipalities live under the poverty line, 20 of them registered the highest rate of poverty.
The poverty line is equated with a yearly income of US $533 per capita. Since 1987, Jordan struggled with a substantial debt burden and rising unemployment which consider one of the major challenges that faces the government, Jordan has one of the highest rates of human development at the Arab level in terms of high level of education and health, but faces a growing problem of unemployment that affecting young people in particular and threatening to leave dangerous consequence.
Official figures show that it ranges around an average of 15% and it shows a tendency to increase because there are one million 300 thousand citizens are currently between the ages of the tenth and nineteenth and they will enter the work market soon which panic the government because it is not easy to create jobs. In 1989 efforts to increase revenues by raising prices of certain commodities and utilities triggered riots in south. The mood of political discontent that swept the country in the wake of riots helped set the stage for Jordan’s moves towards democratization.
Jordan also suffered adverse economic consequences from the 1990-1991 Gulf War. Jordan relies on the foreign grants, and the main challenge that facing Jordan is reducing the dependence on the foreign aids. Jordan has weak economy unlike many countries border Jordan, this is due to the scarcity of the natural resources in Jordan, such as oil and water, Jordan has no vast oil wealth, and also considered as one of the poorest countries in the water resources. Jordan import water from Syria and oil from Saudi Arabia.
The country is exploring ways to expand its limited water supply and use its existing water resources more efficiently. Jordan also depends on external sources for the majority of its energy requirements. Jordan has developed a new energy strategy in 2007 that aims to develop more indigenous and renewable energy sources including oil shale, nuclear energy, wind and solar power. Under King Abdullah, Jordan has undertaken a program of economic reform. The Government has eliminated most of the fuel and agricultural subsidies, passed legislation targeting corruption and begun tax reform.
In 2009 Jordan’s economy continues to grow slightly but was hurt by lower than expected revenues and slower growth due to global financial crisis. Jordan’s economy Affected by repercussions of the global crisis across multiple channels of Foreign Affairs associated with a shrinking growth of Foreign Affairs in 2009, one of them decline in exports by 19. 4 percent as a result of contraction of world trade, decline in foreign direct investments of 1. 9 billion dollars to 1. 2 billion dollars in a liquidity squeeze at the regional level , a fall in remittances by 5. percent because of regional economic slowdown, and lower tourism revenues by 1 percent according to decline in tourist spending at the global level. But the Jordanian banking sector has remained somewhat immune to the direct consequences of the global financial crisis, despite the negative impacts on the quality of lending. Banks in Jordan are the most profitable among companies in different sectors, and it relies on revenue by more than 90 per cent on net interest and commission, which is seen by economists as a kind of inefficiency and inability to innovate and to provide banking products and services as many world banks.
The Jordanian government continues its efforts to reduce the interest margin in Jordan, and persuade the banks to reduce its benefits to moderate line the same as those in the regional countries and developed countries, as part of government efforts to increase demand in the economy and stimulate growth. The business in Jordan is based on ethics that result from culture and religion. For example when someone wants to open a business he should pay attention to the location and the type of business that will be opened (after getting approval from the authorities).
For instance the investor can’t open a pub next to the mosque. Some foreign investors will find this as an obstacle to their investment. “The nominal GDP (2009) was $21. 92 billion. Annual rate of growth in 2009 was 3. 12%. Per capita GDP (2009) was $4,700. ). the GDP per sectors of the Economy in 2007 is Agriculture3%, Industry 3%,Electricity 17%, Gas and water 2%, COnsttuction4%,restaurants and hotels 9%,Tarnsport, storage , and communication 13%, and services 52%. The major markets for the exports are India, USA, Iraq, Saudi Arabia, EU, U. A. E. , Syria and Israel. The imports in 2009 were worth $16. 2 billion. The major suppliers to Jordan are Saudi Arabia mainly for crude oil, EU, China, USA, Egypt, South Korea, Japan and Turkey. ” (Jordan investment aboard, 2008). Government The Government type of Jordan is constitutional monarchy, the King is Abdullah II and the crown prince Hussein. The monarch is hereditary and the prime minister chosen by the monarch. According to constitution the legislative branch is controlled by the citizens, every four years the citizens elect their Representative to represent their opinion and their needs, the people who are chosen by the citizen Called Nuwab (senate).
The house of representatives has 110 senate nine of them are reserved for Christian, six for women and three of them are reserved for Chechen and Circassian people. The constitution of Jordan is based on Islamic law and French code. Jordan is a constitutional monarchy based on the constitution promulgated on Jan 8, 1952. It stipulates that Jordan is a hereditary monarch with parliamentary system. There are three powers in Jordan, first the Legislative Power consist of the House of Representatives.
The second is the Judicial Power which rests on the court of law; all the Judgments shall be given in with the law and pronounced in the name of the King. The third is the Executive Power which rests on the king who shall exercise his power through his ministers. The King signs and executes all laws. His veto power may be overridden by 2/3 of votes of both the houses of the parliament. He appoints and may dismiss all judges by decree, approves amendments to constitution, declares war and commands the armed forces. In the year 2009 King Abdullah dismissed the cabinet as a part of wider effort to strengthen governance and reform in the country.
Legislative powers rest in the bicameral parliament. The constitution provides three categories of courts civil, religious and special. Administratively, Jordan is divided into 12 governates, each headed by a governor appointed by the king. They are the sole authorities for all government departments and development projects in their respective areas. Jordan has many political parties, but they don’t have a real influence in the political life because of the unclear political platforms. The political parties are banned from 1957 to 1990, political grouping, in addition to existent Muslim Brotherhood, began to form for 1989 elections.
Latent pressures for political participation especially among the Palestinians, who were underrepresented in top layers of narrowly, based Transjordanian, dominated power structure. The freedom of speech in Jordan is limited because the king is strong and has influence in the Jordanian political life. King Abdullah II after his father’s death took over and quickly moved to reaffirm Jordan’s peace treaty with Israel and its relations with USA and since then he has focused the government’s agenda on economic reform, political reform and poverty alleviation.
Jordan is facing continuing economic difficulties, growing population and more open political environment has led to grow a variety of small political parties. Jordan considered as one the safest country in the region and worldwide, Jordan is the 14th in the Police Service Reliability and the first in the Middle East, Jordan is the 13th worldwide in Business Costs of Crime & Violence and the first in the Middle East, Jordan is the second Worldwide in Business Costs of Terrorism and the 9th in Prevention of Organized Crime and the first in the Middle East.
Foreign Trade Policy Jordan’s Foreign Policy has been a function mainly of its response to developments in the Arab-Israeli conflict. Its generally moderate and carefully measured response has been based on its appraisal that effective Arab unity is a precondition for substantive peace negotiations with Israel. The persistence of intra-Arab differences over the form and substance of pan-Arab cooperation has constrained Jordan to steer a flexible and prudent course.
In addition, the scarcity of domestic resource and the consequent heavy dependence on outside powers of military support have contributed to Jordan’s caution in foreign policy. The PLO’s enhanced importance since mid 1970’s as a key factor in the processes of Middle-East reconciliation and peace has been further compelling reason for Jordan’s generally pragmatic responses to an uncertain foreign policy environment. The Foreign Trade Policy of Jordan deals with multiparty economic and trade agreements as well as bilateral trade agreements between Jordan and other ountries, negotiating the agreements, preparing the draft agreements and supervising their implementation and conducting required studies to evaluate their impact as well as amending agreements to enhance and develop the Jordanian economy. The Foreign Trade Department of Jordan is the focal point for the WTO in Jordan which functions as the Jordanian Notification Point of the various agreements of the organization. Today Jordan is at the front position of the Middle Eastern Liberal economics that gained a lot of respect and recognition for the reforms and economic accomplishments.
It has managed to nurture its economic ties with the neighboring Arab countries by joining the (GAFTA) and signing a number of mutual trade agreements, also entering into an association agreement with the European Union, signing a free trade agreement with USA after successfully becoming a member of World Trade Organization in 2000 and also signed free trade agreements with the European Free Trade Association (EFTA) countries and Singapore.
The country has also enhanced its investment environment by concluding over 35 agreements on protection and promotion of investment over on avoidance of double taxation with the Arab and non Arab countries. All these movements and developments will contribute positively in the country’s economy. The foreign trade policy is sought to utilize its efforts to attract foreign investments ultimately serve as the medium for growth and a way to improve welfare and living of the citizens of Jordan. Following is the list of the agreements which Jordan made with different associations.
Agreement| Date Signed| Date of Entry into Force| GAFTA| 19 Feb. 1997| 1 Jan. 1998| Jordan-EU Association| 24 Nov. 1997| 1 May. 2002| Jordan-US Free Trade Area| 24 Oct. 2000| 17 Dec. 2001| Jordan-EFTA Free Trade| 21 June. 2001| 1 Jan. 2002| Agadir Agreement| 25 Feb. 2004| 6 July 2006| Jordan-Singapore Free Trade| 16 May. 2004| 22 Aug 2005| (Jordan, 2009) Jordan and GAFTA Greater Arab Free Trade Area (GAFTA) it was declared within the social and economic Council of the Arab League as an special program to activate the Trade Facilitation and Development Agreement that has been in forces since
Jan 1998. The GAFTA includes like Jordan, UAE, Bahrain, Saudi Arabia, Iraq, Sudan, Libya, Lebanon, Kuwait overall a total of 17 countries. GAFTA is one of the most important economic achievements in the area of Arab common work. By Jan 2005 the agreement reached to full trade liberalization of goods through the full immunity of custom duties and charges having equivalent effect in all Arab countries members of the GAFTA except for few less and underdeveloped countries.
There are overall 12 countries of the GAFTA which do not require authentication of certificates of origin and accompanying documents by the embassies and consulates (GAFTA & Jordan, 2009). The further efforts to contribute the economic addition among the Arab countries through liberalization trade in both goods and services, Arab countries are now engaged in negotiations to liberalize services and investments among them.
Council of the Arab Economic Unity agreement was established in 1957 by a resolution of Arab Economic and Social Council of the Arab league. The main objective was to achieve economic amalgamation between the Arab nations with a target of having an Arab common market. The first session of the committee took place in Cairo in the year 1964 which is responsible for administrating the agreement on the Arab Economic unity and implementation. (GAFTA & Jordan, 2009). Jordan and WTO
In April 2000 Jordan had its accession to World Trade Organization (WTO) through which Jordan undertook many reforms to bring its economic policies and trade regimes into fulfillment with the WTO agreements. As a result of joining WTO, Jordan liberalized its services sectors providing market to access to foreign investors and service providers of World Trade Organization Members in accordance to Jordanian Laws and Rules. Where in goods trade Jordan promised to reduce custom tariffs.
Jordan finished its first review of its trade within the WTO framework in 2008 which was its first review since its accession to WTO in 2000. In the statement addressed to the trade policy review committee and members state Jordan emphasized on the importance of the role played by the review of its policy in promoting transparency as their top priority along with deepening the understanding. The revision was conducted for the reforms conducted by Jordan for promoting ts economy in making it among the advances countries despite facing several issues like poverty, unemployment, and inflation. In its review Jordan also stressed on its next steps to further liberalize the economy to guarantee full integration in the world economy and also made a strong commitment to fulfill the requirements under the WTO which have positively contributed positive results in Jordan’s economic growth and has increased its exports.
Accession to WTO provides Jordan’s goods and services with market access to over 150 countries within a transparent trade procedures and laws and regulations in agreement with WTO rules and agreements. (WTO & Jordan, 2009). On the other side the national economic reform procedures and new legislations that were enacted in preparation to merging with World Trade Organization contributed to creating a business environment attracting investments. Allying with WTO provides Jordan new market access opportunities in goods and services that would create great results for the Jordanian economy.
When the meetings took place the members of the state praised Jordan’s policy of openness and liberalization of trade regime which the Jordan government has adopted during the past few years which resulted in a steady growth in Jordanian exports and rise in the domestic production as well. This has attracted a lot of Arab and foreign investment in Jordan. Under the rule of H. M. King Abdullah II, Jordan is promoting trade and economic relations by having several royal visits to different countries and parts of the world in promoting Jordan and its trade relations with the world.
The trade policy review was concluded by the chairman of the trade policy authorities who praised Jordan’s economic reforms implemented. Jordan submitted its application in 1994 to GATT known as general agreement on tariffs and trade which was changed and then became an application request to join WTO in the year 1995. Negotiations were made in finalizing the protocol that became a part of law of its agreement with the WTO in the year 2000. Concurrence to WTO Jordan’s goods and services were able to market themselves in over 150 countries with a transparent trade and laws and regulations in consent with the world trade organization. WTO & Jordan, 2009). Where as on the other side national economic reformation procedure and new legislations were enacted in order to join WTO. The biggest advantage to Jordan by joining the world trade organization is it provides new market access opportunities for the products and goods manufactured and produced in Jordan. Jordan and OIC Jordan and the states of the Organization of Islamic Conference. Jordan is a member of OIC and is party to framework agreement for exchange of customs preferences which targets providing market access at special custom tariffs rates among the states of OIC.
This agreement was imposed in 2003 after being approved by the Islamic member countries which include Egypt, Tunisia, Libya, Lebanon, Iran, Pakistan, Malaysia, Bangladesh, Uganda and few more Islamic countries. These countries together negotiated and agreed on a procedure to reduce customs tariffs under the framework agreement through the set of rules those were approved by the Standing committee for economic and commercial cooperation. In Nov 2005 Jordan signed this treaty and will enter into force after its approval by OIC consisted of its 10 member states.
Basically each participating country shall specify its total tariff lines under the harmonized system of tariffs to be subject to reduction in customs tariffs. (OIC & Jordan, 2009). Developing countries shall within 2 years from entry in OIC will enforce this set of rules and under developed countries in 4 years. Member states shall not introduce new para tariffs and also not introduce new non-tariff barriers within the time frame given for developing and under developed countries. Jordan and EU Association
Jordan and the European member states signed an association in Nov 2007 with a vision of creating a free trade area between EU and Jordan as well as establishing a broad framework for political, social, economic, trade, investment, and financial cooperation. This agreement was signed to create a large area of peace and economic prosperity in the Mediterranean Basin. The agreement allowed the entry of Jordanian exports into EU member countries free of custom duties and other charges having equal effect from date of entry into force of agreements.
Also the EU exports are permitted free of custom tariffs in Jordan having similar effect over a intermediary period of 12 years starting from the date of entry into force of agreements. In addition to reduction in tariffs and of non-tariff barriers the agreement contains comprehensive provisions on the conduct of trade in of various goods and services. (EU & Jordan, 2009). Within the framework of the agreement the EU has promised to setup special fund to assist in improving the export capacity and competitiveness of Jordanian industries.
In 2006 the Pan-Euromed rules of origin has been inducted. The system allows the accumulation of origin between the EU countries, EFTA countries and Mediterranean countries that have association agreements with the EU. These kind arrangements would help grow the export opportunities. When Jordan exports to EU countries, all the Jordanian agricultural exports are exempted from customs duties with exemption to 7 goods which are subject to limited quantity which is to be increased gradually to reach the maximum level by the year 2010.
Those seven products are cut flowers, potatoes, garlic, and cucumber, citrus, strawberry and olive oil. The EU applies specific related to entry prices for the freshly produced agricultural goods, where system is applied by EU on all imports of these goods from the countries with no exceptions. When Jordan imports goods and products from the European countries, goods excluded from liberalization because of the importance which consist mainly frozen poultry, olive oil, chicken, liquors, butter and chocolate.
Goods for which custom duties dismantling will take place in orderly year 2009, 2010, 2013. On the other hand agreement also governs special rules of the origin of the goods traded below the agreement, modes of payment and capitals and protection of the intellectual property. (EU & Jordan, 2009). It also covers up the financial and technical cooperation in the fields of agricultural, investment, industry, transport, telecommunications, tourism, statistics, metrology and science and technology. Jordan and USA (FTA)
With the vision of promoting friendship , economic , trade and investment cooperation between Jordan and USA the two nations signed an agreement establishing a free trade area in Oct 2004 which came into enforce in Dec 2001. The Jordan-US FTA agreement covers trade and services, protection of intellectual property rights, labor and e-commerce. With this agreement trade in industrial and agricultural goods between the two nations will be completely liberalized through a regular reduction of customs duties and harges having equivalent effect over a intermediary period of 10 years from the date of entry into force of the agreement during which the customs duties will handled for both the nations with a proper time schedule. The Jordanians need to meet the domestic content rules if they want to enter the US market under the special tariff rates of the FTA, the cost of the products manufactured in Jordan or the processing cost is charged minimum of 35% of the USA custom tariffs.
The cost of any product manufactured in Jordan having a material from USA will have a special tariff of 15% of the total value. There are special rules present for the clothing and apparel products. Currently certain products of Jordan like the milk and dairy products, sweets are a matter of tariff rates when exported to USA. However below the FTA rules USA gives Jordan’s exports quality goods duty-free entrance of growing large in quantity of goods over 10year period and will also eliminate the quota.
There are special facilities to protect the domestic industry incase of any mishap. As of the sixth year of active agreement most of the Jordanian products and goods shall be let go the tariffs and duties applicable to the USA market. But there are still many products specially from the clothing industry which enter the USA market according to the tariffs dismantaling provision below the agreement. (Jordan, 2009). As in the area of services Jordan with its acess to WTO in the year 2000 it already has an impressive and substantial access to USA service markets.
Jordan has provided liberlization in many service sectors with a vision to encourage the investment in Jordan. In return USA provides investor visas as a provision of its immigration and its related laws. Another provision in the agreement is that it includes requirements to protect the confidential property rights specially in terms of trademarks, patents, and trade secrets. Coming to the electronics business enviornment , labor and trading Jordan and USA are trying to avoid custom duties on electronic transmissions like the digital products and the impending supply of services through electronic means.
If the custom Duty is:| Will be abolished over a period of 😐 With a reduction of:| More than 0% or less than or equal to 5%| Two years| Two equal installments| More than 5% or less than or equal to 10%| Four years| Four equal installments| More than 10% or less than or equal to 20%| Five years| Five equal installments| More than 20%| Ten years| Ten equal installements| Above is the chart describing the custom duties according to the agreement (Jordan, 2009) : The qualified industrial zones agreement was signed between USA and Jordan in 1997.
In this agreement the QIZ products will benefit the customs duty and free access to the USA market. Such products would have to achieve and additional value of minimum 35% of the value of the manufactured product and also fulfill the USA laws along with the circumstances under the QIZ agreeement. As of now there are 13 qualified industrial zones in Jordan of which 3 are government owned while the rest are private sectors. These zones are dominated by the textile and clothing sector. (Jordan, 2009) Free trade agreement with the EFTA
Iceland, Liechtenstein, Norway, and Switzerland along with the European free trade association and Jordan signed a free trade agreement in the year 2001 with a view to create favourable conditions for growth and diversification of business’s and to encourage economic cooperation on the grounds of equality, mutual benefits and with no discrimination. The agreement was entered in application mode in the year 2002 covering up the economic and technical cooperation in various sectors including from intellectual property, custom issues to technical regulations and rules.
The agreement says that it needs special attention to sectors in Jordan which have trouble as a result of Jordan’s process of structural mutual setups to the liberlization of its economy. The jordan –EFTA agreement is looked upon as an agreement which pursues both the associations to contribute in creating and making strong the an enlarged and peacefull free trade area between the European nations and the Mediterranean nations. The free trade area which includes Jordan and the European Nations will be fully operational through a developing liberlization extending till 12 years.
The free trade agreement mainly takes under trades related to industrial, agricultural, fish and marine goods. (EFTA, 2009). The agreement reaches complete trade liberlization at the end of the period of 12 years. Meanwhile Jordan will try and gradually lower their custom duties and tariffs having similar effect imposed on its imports of the various goods imported from the EFTA countries whereas on the other hand when the Jordanian originated goods when will enter the EFTA market they will be given exemption from the custom duties and tariffs having this equivalent effect from the date of the enforcement of the agreement.
The agreement has assigned 3 schedules for the custom tariffs and chareges for Jordan imports of industrial goods originated in any EFTA nations. The follwing are the 3 schedules having a list of different tariffs charged according to years :- Date of Implementation| Custom tariff duties are reduced to| On date of entry| 80% duty tariff| After 1 year| 60% duty tariff| After 2 years| 40% duty tariff| After 3 years| 20% duty tariff| After 4 years| 0% duty tariff| The second schedule is of goods produced in Jordan and the custom duties on these goods are dismataled over 12 years from the enforcement of the agreement. EFTA, 2009) . Implementation date from the enforcement of of the agreement| Reducing custom duties to| End of 4 years| 90 % essential duties| End of 6 years| 70% essential duties| End of 8 years| 50% essential duties| End of 10 years| 30% essential duties| End of 12 years| 0% essential duties| The third schedule consist of goods which are sensitive and delicate products mainly related to products from clothing, textiles and carpets. With these products Jordan and the EFTA nations will negotiate after 4 years fromt the enforcement of the agreement as to decide the customs and tariffs arrangements for these goods.
Agricultural goods which are mostly freshly produced each EFTA nation will make mutual provisions and provide measures to facilitate the trade. A special set of rules is made for the origin and methods of administrative cooperation is annexed to the agreement. Jordanian exporters can incorporate the products originated in countries like Egypt and Israel in their products of Jordanian made when doing business with them with the EFTA nations. (EFTA, 2009). Jordan and AGADIR Agreement Jordan signed a free trade agreement among the Arab Euro-Mediterranean countries which is known as the AGADIR Agreement.
The agreement was signed in Rabat in the year 2004 but was pursuant to the Agadir declaration which was signed by nations Jordan, Tunisia, Egypt, and Morocco in 2001. The agreement had common grounds that the four nations will have and share their bilateral trade agreements and the association agreements with the EU. Also the four nations signed the agreement together to percieve the importance of the Arab joint cooperation along with the executive program for establishing the greater arab free trade area with a vision of the starting an arab common market and therefore the nations made the decisions to conclude the agadir agreement. AGADIR & Jordan, 2009). Agadir agreement which was enforced in 2006 consisted rules and regulations of the Pan-Euromed rules of origin which allowed for accumulation of the origin amongst the member countries through the chance of using production input works originating in any country or member of Agadir Agreement, EU nations, or the EFTA countries to meet the terms for the usage of exporting their products to the EU markets being let go from the custom duties under their association agreements with the EU.
The agreement’s one of the goal is also harmonization of general and economic policies in the member countries in relation to foreign trade, taxation system, agricultural, industry, services and customs with a aim of achieving a healthy competetion amongst the member countries. The agreement also provides the full liberlization of the trade in each individual sector of industrial and agricultural goods of its date of entry of enforcement of the agreement.
The member countries are bonded under the agreement to the take off all the non-tariff issues which include the quantative restrictions, financial , administrative and technical issues which are related to imports. A separate techinical entity is established in Amman , Jordan to keep a check on the implementation of the Agadir agreement and also provide advice and help technically in all related matters. (AGADIR & Jordan, 2009). Free Trade Agreement between Jordan and Singapore It was in May 2004 when Jordan and Singapore signed a free trade agreement between them aiming to promote economic development and develop artenerships between both the nations taking into consideration the illustrious experiences that Singapore enjoys in the economic development, technology and improving the investment enviornment. The agreement which entered into enforcement in 2005 also targets at promoting mutual trade in goods and services between the two nations and also establishing new export openings for the Jordanian products to the international market through a possibility of diagonal gathering of origin with nations that have concluded free trade agreements with both the nations. Singapore & Jordan, 2009). According to the agreement goods of the Jordanian foundation will enter the market of Singapore exempted from customs and other tariffs and charges of alike effect from the enforcement of the agreement. On the other hand the goods originated in Singapore imported by Jordan are eligible to have gradual reductions of custom duties and charges to reach full exclusion over a intermediary period of 5-10 years.
The agreement does include exceptional necessities to safeguard and anti dumping precautions in case of liberlization under the agreement causes the injury to the local market. The reduction of the tariffs and customs begins the from year 6 from the date of the enforcement of the agreement in equal installments to reach the full exemption by the end of the 10th year from the date of the enforcement of the agreement. (Singapore & Jordan, 2009).
Reduction on customs duties and charges on the date of enforcement of agreement custom duties and charges of equivalent effect are abolished consists goods like chicken meat, dairy products, barley, wheat, soy beans, fruits, oil seeds, gum, cows, sheep fats, wool, sugar, food dough, fruit juices, sauces, dumper vehicles, made to use outside public roads, heavy duty vehicles, cars for the disabled, and wheelchairs for the physically handicapped people.
Reduction on customs and charges of equivalent effect starts on the date of enforcement of the agreement in equal installment to reach full exemption by the end of 5th year has goods like living fish, spices, organs used for biological treatment, pharmeceutical products, steel or iron rods, pipes, electric sets for telephone, car engines and fibre optics on its list.
Products like dried fruits, pepper, ginger, plants used for manufacturing perfumes, marine herbs, sweet products, chocolate, biscuits, corn-flex, fruit jucies, coffee, tea, food products for animals, petrol oil, bandages, tanning materials, painting inks, cosmetics, home appliances products, industrial products, paper , cardboard, floor covers, glass products, jwelleries, aluminium products, batteries, part for trailers and vehicles, boats and lightening equipment and many more are the products which have full reduction and exemption of duties by the end of the 10th year after the enforcement of the agreement.
On the enforcement date of the agreement annual reduction begins at 5% of the basic duties and reach upto 50% of the basic duties in the 10th year of the agreement comes into enforcement. Products which fall in this list consists of alchoholic products. Excluded from any custom tariff reduction falling under the agreement have products like potatoes, tomatoes, carrots, lettuce, coconuts, bananas, grapes, watermelon, olive oil, wines and cars. For business and trade in services the agreement provides further liberlization in various service sectors by both the countries exelling within the scope of the World Trade Organization.
The agreement also targets for attracting joint investments, Jordan offers extra liberlization for Singaporean services in sectors like research and development, natural science, social science, human science and also in advertising services, cenvention services and water treatment services. (Singapore & Jordan, 2009). Whereas Singapore offers extra liberlization in sectors of service of which most important are computer and related services, social and human sciences, advertising services, management consultancy services, real estate services, renting and leasing without operators, building cleaning, photography and packaging services.
This is an addition to preferences provided within Jordan-Singapore mutual investment treaty. The agreement also explains cooperation in the financial and transport services of all forms between the two nations. (Singapore & Jordan, 2009). FTA between Jordan and Canada This is one of the latest free trade agreement signed by Jordan with Canada in the year 2009 at Amman having a Bilateral Investment Treaty, a Labor Cooperation Agreement and an Enviornment Cooperation Agreement.
The FTA is the first free trade agreement Canada has signed with an Middle Eastern nation. (Canada & Jordan, 2009). The agreement would contribute to the growing mutual trade in goods between the two nations and will make efforts to create new opportunities in export sector for the Jordanian products in the non traditional markets through the collection of origins with nations that have already signed the free trade agreements with Canada and Jordan.
The agreement gurantees that Jordanian originated goods will have access to the Canadian market free from the custom tariffs from the date of enforcement of the agreement whereas on the other hand goods and products from Canada will access the Jordanian market with a gradual decrease in the custom tariffs over a time period of 3-5 years.
With exception to limited sensitive commodities both the nations will be excluded from customs tariffs elimination. There are 3 categories in which the products are categorized and the duties and tariffs are decided along with the time frame. Category (A ). The tariffs dismantaling for the goods having Canadian origin shall be duty free in the Jordan’s market according the Jordan schedule from the enforcement of the agreement.
The goods include like living bovine, boneless and meat having bone in, livers , milk powder, natural honey, skins and other parts of birds, animal products, tomatoes and potatoes, chickpeas, beans, millet, cereals, wheat, barley, vegetables oil, sugar, chocolate, pastry bread, flours, meals, brans, zinc ores, lead, nickel, lubricating oil, chlorine, bromine, sheets, bars, wires of iron, steel, engines, motors, ovens, freezers, tractors, cars, work trucks, cameras and monitors, instruments used for medical and surgeical purposes, metal and furniture products. Category (B).
Tariffs and duties on the products made and originated in Canada, Jordan will remove the tariffs and will be duty free with gradual reduction in them effective Jan 1st of the year 3 on the enforcement of the agreement. The live horses, asses, mules, live hens, and other live animals of mammals, dairy products, spreadable, butter, bulbs, tubers, trees, shrubs and bushes, plants, flowers, salmon, tunas, cement and other hydraulic cements, nitrogen and oxygen gas, paperboard , textiles, titanium, powders, all kinds of household tools are the list of the products which have a gradual reduction in the duties upto 3 years.
Category (C). Duties on these goods Jordan time frame shall remove and be duty free in 5 years beginning at the enforcement of the agreement for the goods originated in Canada and exported to Jordan. A few examples which fall in this category are live sheep and goats, frozen meat, live ornamental fish and other types of fishes, fillets, prawns frozen, dried or salted, milk, cream, yoghurt, whey, fresh cheese with its all kinds, birds eggs, cut flowers, flower buds, coconuts, cashews nuts, pinekernals, dates, figs, oranges, avocadoes, leomons, gypsum, natural gas, liquified, slabs of marble, crushed stone are some of the products.
Category (D). Duties on goods born in Canada provided in the category (D) in Jordans schedule shall be deducted in 5 equal annual stages of 10% from the original price indicated in the Jordan’s schedule beginning at the enforcement of the agreement and will reach upto 50% of the base rate at the end of the 5th year. Products of this category are beer made from malt and whiskies. Category(E). Goods granted relief from any tariff elimination are goods like prepared preserved meat offal of turkeys, hens of gellus domesticus, tobbacco and cigarettes.
The agreement’s rules of origin follows the principle of change in harmonized system for the purpose of presenting origin. These rules are more transparent and simpler than those followed in the Jordan’s other free trade agreements. This also gives Jordan a competetive advantage and capabilities of the domestic industries. (Canada & Jordan, 2009). The agreement also has provisions which ensure equal and transparent competetion safeguarding against monopolistics actions related with national laws and regulatios. Jordan and Canada have reformed their obligations under the
World Trade Organization with respect to subsidiaries, sanitary measures, intellectual property rights and government procurement. Works Cited AGADIR, & Jordan. (2009). . Retrieved from http://www. mit. gov. jo/Default. aspx? tabid=733 Canada, & Jordan. (2009). FTA. Retrieved from http://www. mit. gov. jo/Default. aspx? tabid=1189 EFTA. (2009). Jordan . Retrieved from http://www. mit. gov. jo/Default. aspx? tabid=707 EU, & Jordan. (2009). Retrieved from http://www. mit. gov. jo/Default. aspx? tabid=706 GAFTA, & Jordan. (2009). Retrieved from http://www. it. gov. jo/Default. aspx? tabid=732 GDP. (2009). Jordan . Retrieved from http://www. photius. com/countries/jordan/economy/jordan_economy_gdp_by_sector. htm Jordan. (2009). Retrieved from Ministry of Industry and Trade: http://www. state. gov/r/pa/ei/bgn/3464. htm OIC, & Jordan. (2009). Retrieved from http://www. mit. gov. jo/Default. aspx? tabid=708 Singapore, & Jordan. (2009). FTA. Retrieved from http://www. mit. gov. jo/Default. aspx? tabid=710 WTO, & Jordan. (2009). Retrieved from http://www. mit. gov. jo/Default. aspx? tabid=810
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