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Jordan

Jordan

Trade relations between the EU and Jordan are governed by the Association Agreement  which entered into force in May 2002. This Agreement established a Free Trade Area liberalising two-way trade in goods between the EU and Jordan.  The EU and Jordan have subsequently developed their FTA further through supplementary agreements on agricultural, agro-food and fisheries products and on a bilateral Dispute Settlement Mechanism  which entered into force in 2007 and 2011 respectively.

Supporting Jordan in the context of the Syrian refugee crisis: a joint initiative on rules of origin

In July 2016, the EU and Jordan agreed to simplify the rules of origin that Jordanian exporters use in their trade with the EU.

This initiative forms part of the broader EU support for Jordan in the context of the present Syrian refugees crisis and is intended to make it easier for Jordan to export to the EU, encourage investment and create jobs both for Jordanians and for Syrian refugees.

This targeted and time-limited simplification concerns the rules of origin set out in the EU-Jordan Association Agreement and with which Jordanian exporters need to comply in order to benefit from the preferential access to the EU market which the Association Agreement provides.

This initiative applies for 10 years and covers a wide range of manufactured products in 52 chapters of the Harmonised System. The alternative rules of origin made available under this scheme are the same rules given to Least-Developed Countries under the EU's Everything But Arms initiative.

For exporters to be able to use these alternative rules of origin, production must:

  • take place in one of the 18 specific industrial areas and development zones in Jordan
  • involve a minimum percentage of Syrian refugee labour in the production facilities (initially 15% and increasing to 25% in year three)  

A mid-term review will take place in year four to consider whether any changes should be made in light of experience. The EU and Jordan have also agreed that once Jordan achieves its global target of bringing around 200,000 Syrian refugees into the formal labour market they will look at ways to further simplify the initiative.

Trade picture

  • The EU is Jordan's largest trading partner, accounting for 16,9% of its trade in 2015, before Saudi Arabia (15,3%) and China (10,5%). In 2016, Jordan is the EU’s 58th trading partner representing 0,1% of the EU’s total trade with the world.
  • Total trade in goods between the EU and Jordan in 2016 amounted to €4,4 billion.
  • The EU imported €0.3 billion of goods from Jordan in 2016, mostly made up of chemicals (€0,1 billion, 31,0%) and machinery and transport equipment (€0,07 billion, 20,8%).
  • The EU's exports to Jordan are dominated by machinery and transport equipment (€1,3 billion, 32,0%), followed by agricultural products (€0,7 billion, 17,4%) and chemicals (€0,6 billion, 15,3%). EU exports to Jordan amounted to €4,1 billion in 2016.
  • Two-way trade in services amounted to €1,4 billion in 2015 with EU imports of services representing €0,5 billion and exports €0,9 billion.

EU-Jordan: Trade in goods

Trade in goods 2014-2016, € billions
Year EU imports EU exports Balance
2014 0.3 3.7 3.3
2015 0.4 4.0 3.6
2016 0.3 4.1 3.7

EU-Jordan: Trade in services

Trade in services 2013-2015, € billions
Year EU imports EU exports Balance
2013 0.5 0.9 0.4
2014 0.6 1.1 0.5
2015 0.5 0.9 0.4

EU-Jordan: Foreign direct investment

Foreign direct investment 2015, € billions
Year Inward stocks Outward stocks Balance
2015 0.5 2.6 2.2

Date of retrieval: 15/02/2017

More statistics on Jordan

EU and Jordan

Under the Association Agreement, the EU and Jordan have established a Free Trade Area (FTA) under which they agreed:

  • to liberalise two-way trade in goods, so that all trade in industrial products takes place free of any import duties while trade in agricultural, agro-food and fisheries products has been liberalised on a selective and progressive basis
  • rules and disciplines on non-tariff based trade measures such as quantitative restrictions and product standards
  • a general right to establish businesses and provide services in the other territory
  • to allow for current payments and capital movements
  • common rules on competition and intellectual property

Towards a potential Deep and Comprehensive Free Trade Area (DCFTA) with Jordan

The Council of the European Union adopted negotiating directives for a Deep and Comprehensive Free Trade Area (DCFTA) with Jordan in 2011. This would build on the existing Association Agreement, notably in regulatory areas, and address important issues not presently covered such as trade in services, government procurement and investment protection.  It would aim to support economic reforms in Jordan, bring Jordanian legislation closer to that of the EU in trade-related areas and generate additional trade and investment opportunities by integrating Jordan more closely into the EU single market. 

The preparatory process for a DCFTA is ongoing.  As part of this exercise, a Sustainability Impact Assessment (SIA) was carried out by an independent contractor in 2014.  

Jordan in Euromed

Jordan is one of the partners of the Euro-Mediterranean Partnership (Euromed).
Euromed is one of the key initiatives of the European Neighbourhood Policy, through which the EU offers its neighbours a privileged relationship, building upon a mutual commitment to common values (including democracy and human rights, rule of law, good governance, market economy principles and sustainable development).

Euromed is an essential component in the pursuit of greater economic integration in the Mediterranean region, including among Mediterranean partners themselves.

More information on the Euro-Mediterranean partnership

In 2004, Jordan signed the Agadir Agreement with Morocco, Egypt, and Tunisia. This committed all parties to removing all tariffs on trade between them and to harmonizing their legislation with regard to standards and customs procedures. The Agadir Agreement entered into force in July 2006 and the implementation is ensured by the Agadir Technical Unit in Amman.

More information on the Agadir Agreement

The pan-Euro-Mediterranean cumulation and the PEM Convention on rules of origin

The pan-Euro-Mediterranean cumulation system of origin was created in 2005. It brings together the EU, Jordan, and other partners in Europe and the Mediterranean to support regional integration by creating a common system of rules of origin. Rules of origin are the technical criteria which determine whether a specific product qualifies for duty free or other preferential access under a given trade agreement.

Cumulation of origin means a product coming from one partner country can be processed or added to a product of a second partner country and still be considered an “originating product” of that second partner country for the purposes of a particular trade agreement.

The pan-Euro-Mediterranean system allows for diagonal cumulation (i.e. cumulation between two or more countries) between the EU, EFTA States, Turkey, the Western Balkans, the Faroe Islands, and any countries which signed the Barcelona Declaration of 1995. The system was originally based on a network of Free Trade Agreements having identical origin protocols.

These individual origin protocols are being progressively replaced by a reference to the Regional Convention on pan-Euro-Mediterranean preferential rules of origin (PEM Convention), which was established in 2011 to provide a more unified framework for origin protocols. Jordan signed the Regional Convention in 2013, the internal ratification process is completed since 16 August 2013.

More information on Mediterranean preferential Rules of Origin

Trading with Jordan