Skepticism in Jordan Over Benefits From FTA With US

Arab News

AMMAN, 9 June 2004 - Jordanian and US officials meet in Washington today to review the terms of a Free Trade Agreement signed between the two countries three years ago.

But a controversy is building up in Jordan over the real benefits from the FTA accord, with critics contending the agreement failed to fulfill its promise of spurring Jordan’s national exports.

"The FTA agreement is supposed to help the Jordanian economy, but it has failed to do so," Fahd Fanek, a renowned economist and columnist, told Arab News.

"The increase in Jordanian exports to the United States has been mainly in products of the Qualified Industrial Zones (QIZs), while the traditional Jordanian industries are unable to compete with other exporters in the American market," he said.

According to official statistics, Jordanian exports to the United States increased by 54 percent in 2003 compared with the previous year, to $660 million from $430 million.

However, Jordanian exports to the US were overwhelmingly products of QIZs - joint Jordanian-Israeli businesses that mainly depend on Israeli capital and cheap Jordanian labor.

QIZs have been a target for recurrent attacks by Jordanian opposition parties and trade unions, which argue that they mainly served Israeli interests rather than the Jordanian national economy.

"The QIZ agreements, which were concluded in 1996 with an initiative from the former US administration of President Bill Clinton, had the primary aim of normalizing economic ties with Israel and not giving a hand to the Jordanian economy," said Ali Abul Sukkar, an Islamic deputy at the Jordanian Lower House of Parliament.

US ambassador in Amman Edward Gnehm appeared disappointed with the volume of American exports to Jordan, which remained around $350 million for both 2002 and 2003. "I am not entirely happy with US exports to Jordan, which have stayed static, roughly even over the last few years," he told reporters earlier this week.

He said the new round of negotiations between the US and Jordan would cover intellectual property, legislation in Jordan, environment and development, labor issues and the establishment of the US-proposed "Middle East Free Trade Area".