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Jordan, Israel upgrade trade accord

Jerusalem Post

May 16 2004

Jordan, Israel upgrade trade accord


Jordan and Israel upgraded their trade accord Sunday in hopes of doing more business with Europe.

Jordan also signed a free trade agreement with Singapore on Sunday. Few details were made public on the agreements, which are the outcome of months of negotiations. Both were signed on the sidelines of the World Economic Forum.

Trade has flourished between Israel and Jordan, which has a large Palestinian population, despite worsening Israeli-Palestinian violence. The trade ties are often portrayed as an important benefit of peace _ Jordan and Egypt are the only two Arab states with peace treaties with Israel.

The Israeli-Jordanian agreement signed Sunday expands on an accord signed months after the two Mideast neighbors concluded a peace treaty in 1994. The old agreement allowed for, among other things, trade exchange and the establishment of U.S.-backed joint ventures with Israel.

Ehud Olmert, Israel’s deputy prime minister and minister of industry, trade, labor and communications, said exports from the U.S.-backed joint ventures had expanded "and we hope to do the same with the European Union." Olmert signed the expanded agreement with Mohammad Halaiqah, Jordan’s deputy prime minister and minister of trade and industry.

An Israeli official said on condition of anonymity that the Jordan-Israel agreement comprises technical details necessary for both country’s quest for freer trade with Europe. He offered few details.

The products of the U.S. sponsored Jordanian-Israeli joint ventures are exempt from U.S. quotas and tariffs - an American gesture to bolster peace between the neighbors.

Jordanian exports from the U.S.-backed complexes increased from US$13 million in 1999 to US$420 million in 2002.

Israeli-Jordanian trade increased to US$117 million in 2002, compared with US$76 million in 2000 and US$41 million in 1999. A 6-percent rise in trade was recorded between January and August last year, with two-way trade volume reaching US$81.6 million, compared with US$76 million during the same period in 2002.

Jordanian officials, also on condition of anonymity, said the accord with Singapore eliminates tariffs within 10 years on about 98 percent of all goods that originate from the Southeast Asian nation. In return, Singapore will remove all duties on Jordanian products in the same period.

Earlier this month, Singapore announced it had concluded a bilateral investment treaty with Jordan.

Resource-poor Singapore has made free trade agreements a cornerstone of its economic policy and has signed such deals with the United States, Australia, Japan, New Zealand, Switzerland, Norway, Iceland and Liechtenstein. It is also in talks with Canada, South Korea, Bahrain, India and Pakistan.

Jordan, which lacks the oil wealth of its Gulf neighbors, is focusing on free trade as a way to generate more income through increased exports to heel economic woes stemming from US$7 billion foreign debt. Jordan concluded a free trade agreement with the United States in 2000.