Jordan: No hitches to concluding an FTA with Iraq

Published January 29th, 2001 - 02:00 GMT

The recently signed Iraqi-Egyptian free trade agreement and a scheduled accord between Baghdad and Damascus have generated calls for a similar Jordanian agreement with Iraq, the Kingdom's largest trading partner.  


Jordanian industrialists and businessmen are eager that a free trade contract might be clinched with Jordan's eastern neighbor to bolster two-way trade currently facing fierce competition from other Arab and international competitors.  


Under the January 18 Iraqi-Egyptian free trade zone, tariffs and trade barriers between the two countries are expected to be gradually abolished. Also, on Friday, Iraqi Commerce Minister Mohammed Mahdi Saleh was quoted as calling on all Arab countries to enter free trade deals with Baghdad.  


Jordanian Trade and Industry Minister Wasif Azar said there are no hitches to concluding an accord with Iraq, adding that the issue will be discussed during an official visit to Baghdad scheduled for February 3.  


Amman Chamber of Commerce President Haidar Murad said the commercial sector strongly supports such an agreement, saying it would bolster Jordanian exports to Iraq, expected to exceed one billion Jordanian dinars ($1.4 billion) this year. Trade with Iraq is expected to see further increases in 2001.  


The Jordanian-Iraqi trade protocol was raised to $450 million from $300 million this year. During the first 10 months of 2000 Jordanian exports increased by around 70 percent compared to the same period a year earlier.  


“The proposed accord will be specially significant in light of Jordan's openness to the world markets and other Arab States,” he added. “It would also be an important step towards putting an end to the 10-year UN imposed sanctions,” explained Murad.  


Amman Chamber of Industry Secretary General Adnan Abul Ragheb, said an accord would help multiply Jordanian exports to Iraq. “Sectors which as yet do not export to Iraq, such as the textile industry and others which pay customs fees, are expected to be great beneficiaries of a deal between the two sides,” said Abul Ragheb.  


Joining forces were the Popular Committees for the Support of Iraq and Fighting Aggression, who have also called for a free trade zone with Iraq, especially after Jordan's accession to the WTO, the signing of a Free Trade Agreement with the US and the Euro-Jordan Partnership.  


In a letter sent to Prime Minister Ali Abul Ragheb the committees said an agreement would be in the national interest as Iraq had absorbed more than 80 per cent of the Kingdom's foreign trade during the 1990's, and in light of the annual oil protocol Baghdad offers Amman. They added that they backed some deputies' demands for a deal as it is a necessity for activating the sluggish economy.  


Both Jordan and Iraq are signatories to the Arab Free Trade Agreement, which envisions a zero-customs zone by 2007 through lowering customs by 10 percent each year. Currently the customs tariffs applicable in the AFTA are reduced by 40 percent.  


Officials are optimistic about a proposed agreement with Iraq, arguing that any free trade agreement between the two countries should grant greater tariff reductions than AFTA presently offers to both sides.  


But they say an agreement would be mainly in the interest of the Iraqi private sector which was recently given permission by Baghdad to import, as government imports are all tax exempted.  


“With the expected pick-up in Iraqi private business activity, and a parallel push in Jordanian exports to the Iraqi market, an agreement would be more feasible than any other accord the Kingdom has signed,” said Samer Tawil, Minsitry of Trade and Industry secretary general.  


Some 1,500 companies are currently trading with Iraq. The business is conducted under the oil-for-food deal allowed by the UN Sanctions Committee, by which Iraq is permitted to bypass sanctions to sell oil on condition that the proceeds are used to purchase food, medicines and other humanitarian needs.  


During the visit, more than 170 Jordanian government and private sector representatives are expected to hold talks with their Iraqi counterparts on increasing the trade volume. — ( Jordan Times )  


By Rana Awwad

© 2001 Mena Report (

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