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Competition stands in way of restoring Jordan-Iraq trade to former glory

By Abdul Rahman Bazian - Jan 08,2019 - Last updated at Jan 08,2019

AMMAN/BAGHDAD — Jordanian exporters are worried that the needed facilities to boost trade and competitiveness to their former glory with Iraq may not come in time before the Iraqi market is completely overrun by rival commodities.

Major trade and cooperation development agreements were signed last month between Jordan and Iraq, aside from the memorandum of understanding on power linkage. 

However, some industrialists and exporters, as well as economists, remain sceptical of the practical outcomes of all the pledges made during the trip, . 

Iraqi Minister of Industry and Minerals Saleh Jubouri warned that “the Iraqi market is overrun by Turkish products, as well as Iranian exports, though to a lesser extent”.

Saudi Arabia and other Gulf countries are now also exporting to Iraq, a source with the direct foreign investments office at the Jordanian Embassy in Baghdad said.

According to economist Mazen Marji, much of the effort to restore trade between the two countries depends on the safety and security of the land route.

Both the premiers of Jordan and Iraq reaffirmed the demise of Daesh as an organisation, but they warned that the threat of its resurgence lingers, as there is still much to be done to ensure that they are completely eliminated.

The issue of cost was also raised by Jubouri, which he said may very well prove to be a challenge for Jordanian exporters to secure a significant share in the Iraq market.

Marji said the deals signed would help business, “but in reality, I think restoring the scale of Jordanian exports to 2013 levels, before the border closure, is not doable within a year, or two for that matter”. 

Jordan does not have an absolute advantage over other competitors in the Iraqi market anymore, economist Mufleh Akel said, adding that the Kingdom needs to find a “comparative, relative advantage and capitalise on it”. 

Experts also raised the issues of the quality and the prices of Jordanian products, which might present yet another obstacle in the neighbouring market.

Apart from supply issues, there is the question of the Iraqi market itself, its own purchasing power and demand, according to the economists.

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