Jordan and Israel sign key upgraded trade accord
24 December 2004
AMMAN - Israel and Jordan agreed yesterday to tear down many of their remaining trade barriers in a deal that paves the way for the Jewish state’s first free trade accord with an Arab state by the end of 2010.
“This new agreement will allow greater exports from both Israel and Jordan to the United States and the EU,” Israeli Trade and Industry Minister Ehud Olmert told Reuters.
The deal obliges Jordan to abolish many customs duties on Israeli products by 2010. The European Union has long pressed for such a move, which Jordan hopes will secure better customs and trade quota terms with the wealthy bloc.
Israel sees Jordan as a bridge to the Arab world, and views the prospect of close economic and trade ties with an Arab state as an important step towards easing its regional isolation among its more hesitant Arab neighbours.
Scores of demonstrators protested in Amman against the deal, which aroused strong opposition among Islamist politicians who disapprove of any ties with Israel.
Olmert rejected such worries.
“Why should we have hesitation if as a result of such agreements the exports from Jordan create jobs and provide quality of life,” he said. “Why not do it?”
More than 80 per cent of Jordan’s exports to Israel and more than 50 per cent of Israeli exports to Jordan will be exempt from duties by 2010, according to Israeli figures. That compares to just 9.7 per cent of normal bilateral Israeli exports and 73 per cent of Jordanian exports enjoying preferential terms now.
Jordan enjoys the warmest ties with Israel among its Arab neighbours, and was the first to strike a Qualifying Industrial Zones (QIZ) deal with the United States, under which Jordanian goods made with Israeli input enjoy duty free status in America.
The United States has since expanded the concept to other Arab states as a tool to help Israel break out of its regional economic isolation. Egypt struck a QIZ deal earlier in December.
Jordan said Thursday’s accord with Israel would bring in millions of dollars in investment and raise exports to the West from its expanding industrial parks.
“The signing is another milestone. It’s a success story that we look at repeating,” said Jordanian Trade and Industry Minister Ahmad al-Hindawi. He added that over $600 million in investments had poured into the QIZs in the last few years, creating over 35,000 jobs.
Jordan’s QIZ exports to the U.S. market are expected to top $900 million by end of 2004 compared to a mere $9 million in 1999, Hindawi added.