A new chapter in EU-Jordan trade cooperation

In his book, the Wealth of Nations, famous economist Adam Smith wrote that “every man lives by exchanging”. In the case of the collaboration between Jordan and the European Union, it is constant exchange that helps our relationship grow stronger. On the occasion of the visit of His Majesty King Abdullah to Brussels, and after months of constructive negotiations, the European Union took the opportunity to open a new chapter in its trade relations with Jordan.

The EU and Jordan have agreed to increase the flexibility of the rules of origin scheme as follows:

Firstly, the scheme is extended until December 2030. This long-term horizon will allow investors who want to make plans to expand production capacity in Jordan.

Secondly, the geographic coverage of the scheme is extended to all companies across Jordan; and not only the ones established in the special economic zones. 

Thirdly, the relaxation of the rules of origin is meant as a response to the impact of the Syrian crisis on Jordan. We recognise the efforts that the private sector and the government of Jordan have done to create more opportunities for exports and to facilitate legal and decent employment for Syrian refugees. Therefore, we agreed that when 60,000 legal and active job opportunities are created for Syrian refugees, all firms, irrespective whether they employ Syrian refugees, will be able to benefit from relaxed rules of origin.

Change means more opportunities and we should be ready to seize them. In line with the new government priorities presented by Prime Minister Omar Razzaz, our mission to support Jordan in its endeavour to get on a path for inclusive and sustainable economic growth remains. The rules of origin scheme can contribute to the government's goal to increase export by 5 per cent on an annual basis.

However, increasing exports also requires a regulatory environment conducive to investment, both national and international.

We commend the government on the progress made to improve the business environment; this includes the adoption of the insolvency law and predictability code, as well as the implementation of the inspection law.

The next step should focus on standards. Jordan could benefit from more opportunities to access new export markets in Europe if goods comply with EU and other regulatory requirements. To make sure Jordanian standards are aligned to EU ones, experts from our member states are working hand-in-hand with the dedicated experts of the Jordan Standards and Metrology Organisation to review standards on priority products' sectors, including electrical products, gas appliances and toys. We are also committed to work with Jordan to improve its national quality infrastructure. It will help reduce technical barriers to international trade and will ultimately lower costs of trading, as regulatory barriers will go down. A modern regulatory framework is key to international competitiveness for Jordanian products and services. 

Last but not least, we should not forget the importance of decent jobs. We welcome the efforts made by the government to ensure that companies are aware of labour standards.  "Made in Jordan" can become a guarantee of respect of workers' rights.

So, as we start the new year, here are some projects that will make sure we contribute to efforts to boost Jordan's economic development.

The EU in Jordan will continue to support government efforts to strengthen the private sector's economic competitiveness, including the green and low-carbon economy. We will also continue our direct assistance to the private sector through technical assistance. Whether at the EU-funded Shamal Start incubator and FabLab in Irbid, where Saleem Najjar, a young Syrian refugee, took his idea to the next stage and established an enterprise which was among the winning projects at the European Youth Award, or through the Jordan Action for the Development of Entreprises, EU funds have helped hundreds of men and women living in Jordan to turn their ideas into investment-worthy SMEs. 

The EU in Jordan will stay engaged in the promotion of financial inclusion for all in Jordan, by providing better, safer and easier access to finance in an effort to help create more jobs. In 2018, we helped the government consolidate the regulatory framework for microfinance and supported the implementation of the new national financial inclusion strategy. We can do even more! 

We also intend to invest in private sector innovation to help local companies grow and become more competitive in local and international markets. This will include support through the EU External Investment Plan (EIP). Launched in March by EU Commissioner Johannes Hahn, the EIP attracts private investors where viable business proposals meet sustainable development needs, and where limited public funds can attract private money. 

Now that the border with Iraq is open, we will support the gradual return to a safe and normalised cross-border traffic at the Karama border. Our new project includes the rehabilitation and upgrade of the border crossing infrastructure, as well as technical assistance on profiling, selection and detection procedures of high-risk containers. Next year, we plan to build on this intervention to improve the overall approach to integrated border management in line with EU experience.

Exchange is at the centre of our strong relationship with Jordan. My new year resolution is to maintain and reinforce this exchange, with a conviction that the government's commitment to improve the country's economic situation will help improve the lives of millions in Jordan, young and old, men and women.

The writer is EU ambassador in Amman. He contributed this article to The Jordan Times