Jordan FTA with GCC countries

The FTA would include all commercial services, agricultural products as well as movement of individuals, working in construction, insurance and banking institutions.

Jordanian economy grew by 7.2 per cent reaching US $ 12.86 billions and the GDP per capita increased by 8.3 per cent in 2005. Inflation rate stood at 3.4 per cent in the same year.
The fastest growing sectors in 2005 were manufacturing, construction, wholesale & retail, electricity & water and financial & real estate.

Jordan's economy depends on the services sector, which represented 67 per cent of the total economy in 2005. The population of Jordan is estimated to reach 6 million by July 2006.

Jordan and the world trade agreements

Jordan is one of the signatories on the Euro- Mediterranean Partnership Agreement, which came into being on 1 March 2000. Jordan joined the WTO in April 2000 and committed itself to comply with the WTO Multilateral Agreements on Trade Related Aspects of Intellectual Property (TRIPS), Technical Barriers to Trade, etc. Tariffs are bound at 20 per cent ceiling by the year 2010 with the exception of certain items that are bound at 35 per cent.

It has concluded bilateral agreements with many countries and these agreements are generally based on the MFN principle. It also signed the Free Trade Agreement with the United States, which stipulated the removal of the tariff between the two countries in all fields including trade in services. In addition, it has a free trade agreement with the EU.

Investment climate in Jordan

Jordan has an excellent and unique investment climate. It is committed to providing free market practices and economic betterment. Politically, it is a stable society, which has adopted the concepts of peace and tolerance. Although it is small in size, it envisions big ambitions and offers many opportunities for investors. Its modern facilities, network of highways, excellent communications and security system and a very hospitable people.
Strategically, it located in the heart of the Middle East it offers direct access to the fast growing neighboring markets totaling more than 160 million people.

The most efficient investment opportunity Jordan has offered is the Qualifying Industrial Zones (QIZ) in which manufacturers can export their products quota free and duty free. They are exempt from income tax and customs duties. Imported raw materials, machinery, spare parts and all fixed assets are also exempted. There is no restriction on ownership and no partnership or joint venture requirements. More importantly, the investor has the right to fully repatriate capital, profits and salaries. There is no time limitation on the QIZ status as well.

Besides the QIZ, Jordan has The Aqaba Special Economic Zone (ASEZ), a duty free zone launched in January 2001 with a strategic location of the Aqaba Gulf. The ASEZ Is fully equipped with a modern infrastructure. Although there is a five percent business income tax, investors can have 100 percent ownership and can fully repatriate capital and profits as well.

GCC Countries and Jordan trade relations

Jordan foreign trade with the GCC countries has increased by 81 per cent in 2004. This huge increase came from the increase in imports 130 per cent in 2004.

In 2004, UAE trade with Jordan represented 12.5 per cent from Jordan's total trade with GCC countries. Figure2 shows the Jordan and UAE foreign trade, 2003-2004

Jordan could most definitely be a potential market for the UAE. UAE investors can benefit from the relaxed and liberal investment and trade opportunities available in Jordan. Finally, the UAE can secure a greater share than that of Saudi Arabia in Jordan import trade.