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Sat, 18 Jan 2020 07:11 GMT

EU Export Deal Benefits too Few Jordanian Factories

Business

Mohammad Ghazal

Sat, 16 Nov 2019 12:08 GMT

Jordan and the EU signed an agreement in 2016 in a bid to make it easier for Jordanian companies to increase exports to European markets. However, only ten companies have benefitted from the deal so far, prompting experts to call for increased efforts to capitalise on the agreement. 

Under the deal, the EU decided to ease rules of origin for Jordanian exports. As part of the original deal signed in July 2016, manufacturers in Jordan can import up to 70 per cent of the raw materials used in production and still label the finished products as “Made in Jordan”, qualifying them for trade concessions. 

But since then, fifteen companies met the conditions and received permits to benefit from the simplified rules of origin under the deal, but only 10 of them have actually exported to Europe. 

"The benefit from the deal is still modest and below desired levels and thus more efforts are needed to boost these numbers," Yanal Barmawi, spokesperson for the Ministry of Industry, Trade and Supply, told 7Dnews.

Companies that exported to European markets are operating in the areas including plastic and metal, clothing, electrical devices and the utilities industries, according to the official, who added that the Jordanian factories exported their products to Spain, Cyprus, France, Belgium, Hungary, the Netherlands and Sweden. 

Under the deal, each manufacturer wishing to benefit from the relaxed rules of origin must employ Syrian refugees at no less than 15 per cent of their total workforce. However, there are still challenges when recruiting Syrians. 

"It is difficult to hire Syrians" 

President of the Textile, Garment and Clothing Union, Fathalla Emrani said Syrians are reluctant to work in Jordanian factories for many reasons.

"Many of them prefer to rely on the aid they receive from any international organisations and they also do not want to work for around 300 dinars per month or a bit less at these factories because they can make more when working in construction or plumbing or other businesses," Emrani told 7Dnews.

"This ended up making it difficult for factories to have 15 per cent of their total workforce as Syrian refugees and many factories ended up not benefiting from the agreement," said Emrani.

"More networking"

Economist Hosam Ayesh agreed and said networking was also needed to maximise Jordan's benefit of the deal. 

"Many Jordanian factories are unaware of the opportunities and needs of their peers and merchants in European markets…The government needs to invest more in networking and providing opportunities for business people to explore opportunities," he told 7Dnews.

Jordan's deal on relaxed rules of origin with the EU was extended from 2026 to 2030 under a decision made last year. Its prime objective is to boost Jordan's exports to Europe, which according to official figures stood at $200 million in 2000 and rose to around $310 million in 2017.

Middle East Europe