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EU and Jordan: Partners in trade

Mar 20,2018 - Last updated at Mar 20,2018

Monday was a productive day for EU-Mediterranean cooperation. European Trade Commissioner Cecilia Malmström and Minister of Industry, Trade and Supply Yarub Qudah chaired the Union for the Mediterranean Trade Ministerial meeting in Brussels. It is therefore a good time to reflect upon the importance of trade in bringing the EU closer to regional economies, Jordan in particular.

Both the EU and the government of Jordan have gone above and beyond to offer a stable and clear framework to facilitate trade, creating new economic opportunities amidst a severe regional crisis.

In the first three months of 2018, Jordanian companies held successful meetings in Frankfurt, meeting with EU businessmen and investors, putting Jordan on the map of reliable sourcing. The news that Jordanian textile producers showcased their unique craftsmanship at the latest Texworld in Paris means that more European garment companies have started to consider “Made in Jordan” as a quality guarantee. Positive results are also coming in for companies eligible to export under the relaxed Rules of Origin scheme, which was adopted in 2016, with shipments steadily increasing as successful matches are made between Jordanian exporters and EU buyers.  It all reflects on the proactiveness and dynamism of the private sector.  

The foundation of the EU-Jordan trade relationship was set by the Association Agreement, which entered into force in 2002. It gives very generous preferential access to the EU single market, with no duties and quotas for the vast majority of Jordan’s products. Since 2002, the value of trade between the EU and Jordan has increased in both directions. In 2002, the value of trade in goods was 2.4 billion euros and in 2017 it was 4.5 billion euros, an 87.5 per cent growth. 

Looking ahead, I see some positive trends that we forecast will persist in 2018. According to latest data, the value of Jordan's exports to the EU has risen from 314 million euros in 2002 to 357 million euros in 2017, a 14 per cent increase from 2002 and a 5.3 per cent increase from 2016. Chemicals, textile and machinery and transport equipment, which constituted 37.6 per cent, 13.2 per cent and 13.1 per cent   of Jordan's total exports in 2017 to the EU, were the drivers of growth — some of the sectors Jordan identified as “high potential’ in its 2025 Strategy and which are included in the scheme on the relaxation of the Rules of Origin. The EU was, however, only Jordan's 8th largest export market behind the US and countries in the region, such as Saudi Arabia, Iraq and the UAE.

Efforts to advertise those sectors to buyers and investors in our 28 member states, making up the world's largest single market, must continue and be focused on higher-quality segment. The EU is, therefore, cooperating with Jordan on a number of trade-related projects. First, at regional level we are working on the implementation of the Agadir Agreement, which aims at establishing a Free Trade Area amongst Mediterranean countries.

When it comes to guaranteeing the quality of products being exported to the EU, we have launched a capacity building programme with the Jordan Standards and Metrology Organisation (JSMO). Experts from our member states are working closely with distinguished Jordanian experts, in order to align Jordan’s and the EU’s legislation in high added value sectors, namely electrical products, gas appliances and toys. 

Last but definitely not least, we are considering a Jordanian request to introduce further flexibilities to the rules of origin scheme. We are also collaborating with the International Labour Organisation for monitoring the labour standards of companies eligible to export to the EU and the creation of decent employment opportunities for Jordanians and Syrian refugees to work in factories that could be eligible to export under the Rules of Origin scheme. We are also in the process of looking into ways of stimulating innovation across the board, notably by unlocking Jordan’s immense human capital potential.

While we recognise that more needs to be done in raising awareness among EU investors to come to Jordan, we rely on both the government of Jordan and the private sector to continue being proactive. We cannot emphasise enough the importance of regulatory unpredictability, especially in the areas of investment, company registration and access to finance and skilled labour, including women and young people. We are glad to see that chambers of industry and commerce are becoming more and more active and strategic in creating connections between Jordan and the EU. This will help realise untapped opportunities and close deals with EU private sector operators. 

As ministers from all over the region discussed the benefits of regional cooperation in the area of trade in Brussels, I am proud that Jordan is setting the example for a positive and proactive cooperation with the EU. I am also hopeful that we will be able to continue and build on the current upward trend. Let us keep up the entrepreneurship spirit; it is exactly what the country needs.

 

The writer is the EU ambassador to Jordan. He contributed this articl to The Jordan Times

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