Businesses hope free trade pact with Syria will bring prosperity
Despite worries that some local industries might be harmed by unfair competition, Jordanian businessmen are hopeful that an anticipated bilateral free trade accord with Syria will place their exports on equal footing with those of their northern neighbor.
Jordanian industrialists have for decades complained about economic hurdles in the path of locally-manufactured goods headed for the Syrian market; they have also criticized what they call “unfair treatment” of trade deals between the two countries.
“We demand that our products enjoy reciprocal treatment in Syria. Having a free trade agreement under a regulatory framework will guarantee that the products of both countries will be on a level playing field,” said Othman Bdeir, president of the Amman Chamber of Industry. “There is a high volume of smuggled Syrian products on the market which is harming local industries.”
Amid signs of improved relations, last week Jordan and its northern neighbor held high-level talks in Damascus and signed, among other things, a Jordanian-Syrian Higher Committee declaration paving the way for the free trade agreement.
If the agreement materializes after further negotiations, as it is expected to, tariff barriers will be gradually eliminated to zero by the year 2003.
A free trade agreement with Syria, according to Trade Ministry Secretary General Samir Emeish, will eliminate customs and administrative barriers while ensuring that goods will flow smoothly in both directions.
“We have agreed to enhance our trade relations, while increasing the volume of exchanged goods, end products, product inputs and semi-processed items,” he said.
“Exporting under similar conditions [as those enjoyed by Syrian exports to the Kingdom] will enable Jordanian products to compete in a fair environment ... taking into consideration the quality, type and price of local items,” added the secretary general.
Emeish, a member of the Jordanian delegation that attended last week's meetings of the Jordanian-Syrian Higher Committee in Damascus, said a joint private-public sector committee had been set up and would meet every three months to pursue the development of trade relations.
Jordan and Syria earlier signed other trade protocols, but such agreements, according to Bdeir, are in Syria's favor.
He said manufacturers of goods such as cables, household items, and certain textiles were expected to suffer, “but industries should adapt [to market reforms] and accept economic openness because it is inevitable.”
Echoing this view, Halim Abu Rahmeh, managing director of the Jordan Trade Association, said that despite a 1999 Syrian-Jordanian protocol granting tariff exemptions to certain products, domestically-produced goods still faced snags which hindered their movement into the Syrian market.
But Abu Rahmeh said that once a free trade agreement had been signed with Syria, it would “add another market to Jordan.”
“The two countries will complement each other,” he said. “Jordan enjoys an edge in industries like mining and pharmaceuticals, while Syrians are famous for their textiles and food products,” the managing director said.
“Any bilateral trade agreement should be looked upon as an opportunity for Jordanian products to penetrate [foreign] markets and not vice versa,” he added.
The balance of trade between the two countries is currently skewed in Syria's favor. Jordan imports more than 160 items from its northern neighbor, mostly ready-made products, produce, barley, hommos and textiles.
Meanwhile, Syria imports 15 items, most of which are raw materials, semi-processed goods, industrial inputs and cement.
According to recent Central Bank of Jordan figures, Jordanian exports to Syria last year amounted to nearly JD13 million, while imports stood at close to JD35 million.
Other Trade Ministry figures reveal that Jordan's exports to Syria between this January and May stood at JD6.5 million, while the Kingdom imported goods worth JD8.4 million.
One leading manufacturer, Jordan Clothing Company (CJC), pointed out that under the protocol, Syrian textiles were exempt from customs duties.
CJC Managing Director Samir Maqdah said Syrians were currently not importing Jordanian textiles, “so the [free trade] agreement will rectify the situation.”
“There will be two-way trade,” he said. “We support such measures.”
Jordan and Syria are also signatories to the Arab Free Trade Agreement, which envisions an annual 10 per cent reduction of customs duties which should bottom out at zero per cent by the year 2007.
The two countries first signed a cooperative economic trade agreement in 1975, under which they set up a Jordanian-Syrian free trade company. But the free trade zone constructed under the agreement on their shared border bore fruit only last year due to the ebb and flow of ties between the two countries.
In the meantime, Jordan's recent measures to embrace liberalization and economic openness, such as signing international trade agreements and joining the 136-member Geneva-based World Trade Organization, have required the Kingdom to open up its market.
“Within a short period, Jordan will open up to global markets,” said Abu Rahmeh. “In order for domestic industries to compete, industrialists must enhance the quality and volume of products with competitive prices.” ― (Jordan Times)
By Suha Ma'ayeh
© 2000 Mena Report (www.menareport.com)