May 2002 issue

The Jordan - European Association Agreement, which was signed in 1997, has entered into force on May 1^st, 2002, replacing the Co-operation Agreement of 1977. The main aims of the agreement is to create a free trade area between the EU and Jordan within 12 years and to establish a common zone of peace and stability through reinforced political dialogue and security cooperation. Furthermore, the agreement intends to establish a social, cultural and human partnership that raises understanding among the peoples. The Association Agreement will make it easier for Jordanian businesses to export to the EU, and for EU companies to do business in Jordan.

Jordan hopes that the agreement will help attract foreign investments into the Kingdom. Under the terms of the agreement, Jordan's industrial exports will now enter duty-free into the 15 member markets of the EU. Nine agricultural exports, including orange, grapefruit and dried vegetables will be granted tariff-free and quota-free access to the 15 markets. Other agricultural exports will be subject to quota restrictions and/or a gradual tariff-lowering timetable, and will be allowed access during specified periods of the year.

Exports to the EU surged to €75 million last year, against €48 million in 2000. Meanwhile, imports from the EU rose to €1584 million in 2001 compared to €1525 million in 2000. For further details and to view the text of the agreement: http://www.joreu.jedco.gov.jo/. (Opportunities and Challenges of the Agreement, by Chris Patten, commissioner for external relations, European Commission).

Jordanian – German Development Cooperation 

Jordanian and German officials held talks on development cooperation for 2002/2003 in Bonn from 25-26 April 2002. The German Government pledged to continue support development in Jordan with particular emphasis on water sector and environmental aspects relevant to the sector. Germany has supported, as well, Jordan’s poverty alleviation plan. German new financial and technical commitments to Jordan for the 2002/2003 period will be €39 million. Further assistances are also expected for 2003. During the negotiations, both sides reviewed the ongoing cooperation projects and discussed future cooperation. 

IMF approves €83.6 million disbursement to Jordan 

The International Monetary Fund (IMF) has approved the release of €83.6 million to Jordan following its fourth and fifth review of the Kingdom’s performance under the Extended Fund Facility (EFF) arrangement. First Deputy Managing Director and acting Chair, Anne Krueger said, “Jordan's economic performance has continued to strengthen over the last three years under the Fund-supported program. Real growth has accelerated to over 4% - led by strong export growth -, inflation remains low, the public debt ratio has declined significantly, international reserves have risen to a comfortable level, and interest rates are at historic lows. In 2001, the fiscal deficit was also reduced, albeit less than the authorities originally planned. These successes reflect the authorities' pursuit of prudent macroeconomic policies and a strong package of structural reforms, including trade liberalization, a wide-ranging privatization program, and legal and administrative reforms.” 

Jordan, Syria sign FTA 

Jordan-Syria Free Trade Agreement (FTA) signed in October last year will enter into force on May 21^st, 2002. The FTA will immediately lift all tariffs on “99 percent” of goods traded between both countries. The pact is expected to boost trade exchange by 100% next year as compared to the 2001 level. Under the FTA, only four items, namely clothes, shoes, chocolate and biscuits, and mineral water will undergo a gradual tariff exemption, which starts at 60%, when the agreement enters into force. Customs duties on those items, however, will reach their zero levels by 2005. Trade between the neighboring countries has jumped by 72% during the first seven months of 2001 to €62,5 million as compared to the same period in 2000. Jordan has signed FTA’s with other Arab countries, namely Egypt, Tunisia, Morocco, the United Arab Emirates and Bahrain. 

Industrialists sign 22 export deals under Jordan-US FTA 

Relying on Jordan-US Free Trade Agreement (FTA), local industrialists have signed 22 export deals with American importers worth €4,5 million since the beginning of 2002. Exports, which mainly consisted of garments, marble, and food items, "reflected the competitiveness of these industries in the US market," said an official in the Ministry of Industry and Trade. Described by some businesspersons as a “moderate start”, the trade and businesses between both countries is strongly predicted to increase sharply as soon as the private sector has explored the wide reaching opportunities in the FTA. The FTA entered into force last December. Jordan became the fourth country in the world, after Canada Mexico and Israel, to sign an FTA with the US. 

Free zone exports rise by 107% in Q1 of 2002 

The value of goods reaching local and international markets from the Jordan's general and special free zones witnessed a 107% growth in the first quarter of 2002, against the same period of 2001, according to a report by the Free Zones Corporation (FZC). The report shows that the exported products in the first three months of 2002 amounted to €404,5 million, compared to €195,8 million in the first quarter 2001. 

Pharmaceuticals top list of exports in 1^st Quarter 

Issued by the Commercial Section of the Embassy of the Hashemite Kingdom of Jordan .