Free trade agreement with US glitters amidst economic gloom
The expected signing of a free trade agreement (FTA) with the US this fall should build on the mixed successes of earlier economic reforms, says an official of the Al Urdun Al Jadid Research Center.
“The agreement will contribute to attracting new investment...establishing export-oriented industries for American markets, and creating new job opportunities,” Haitham Hourani said in a workshop held at the center on Monday entitled `Industrial Exports and the FTA.”
He said that despite domestic efforts to jump-start the national economy since the 1990s, the economic recession, unemployment and poverty had become more serious. As examples of such efforts, Hourani cited the economic reform program adopted in 1992, as well as the Arab Trade Zone established in 1998.
In addition, he brought up Jordan's membership in the World Trade Organization (WTO), as well as the Euro-Jordan Partnership Agreement, which is expected to enter into force by the end of the year.
He said the latter two developments had brought some relief, but had not yet brought about an economic boom. “Although Jordan's economic reform programs ensured some financial and monetary stability, and in spite of Jordan's integration to WTO, the level of economic recession and unemployment rates are still high,” he added.
But Hourani voiced hope that the expected endorsement by the US Congress of an FTA with Jordan would boost economic growth rates, increase per capita income, and alleviate unemployment and poverty by creating new job opportunities and opening new markets to Jordanian industrial exports.
However, officials said the FTA would not have the desired effect unless the private sector played the role the government had in mind for it.
Sameer Emash, secretary general at the Ministry of Industry and Trade, said the private sector was still weak and needed to be more effective.
He also said the FTA involved exchanging not just products, but also labor and services.
Jordan is eager to become the fourth country world-wide to enjoy free access to the US mega-market, and hopes that a deal can be struck with the Clinton administration before September, when the US Congress goes into recess. It will not reconvene until after the US presidential elections.
The current administration is assumed to be more amenable to a FTA with Jordan than a new, possibly Republican administration would be.
Charlene Barshefsky, the Clinton administration's principal trade policy advisor and chief negotiator of the US government, is currently in Amman for three days of talks on the FTA with government officials.
According to Othman Bedir, chairman of the Amman Chamber of Industry, Jordan's annual exports stand at around JD1 billion, while its imports stands at roughly JD2.6 billion.
For the last five years, the nation's economic growth rate has hovered at 1-2 percent, while population growth has hit 3-3.6 percent, according to Bedir.
Jordan's official unemployment rate stands at about 14 percent, but the most recent estimate from independent studies is 27 percent. - (Jordan Times)
By Khalid Dalal
© 2000 Mena Report (www.menareport.com)