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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 opening up two-way trade in goods between the EU and Jordan.

The EU and Jordan have developed their FTA further through additional agreements on agricultural, agri-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. Both sides reviewed and improved this initiative in December 2018.

The initiative is part of the EU’s support for Jordan in the ongoing Syrian refugee crisis and intends 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. Jordanian exporters need to follow these rules to benefit from the preferential access to the EU market, which the Association Agreement provides.

This initiative is valid until 21 December 2030 and covers a 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 involve a minimum 15% of Syrian refugee labour in the production facilities.

Following a review in 2018, the EU and Jordan have agreed that once Jordan grants 60,000 active work permits to Syrian refugees, the company-specific minimum employment requirement for Syrian refugees will be lifted. After that, all Jordanian companies which manufacture industrial goods covered by the scheme will be free to benefit from the simplified Rules of Origin.

Trade picture

  • The EU is Jordan’s largest trading partner, accounting for 17.4% of its trade in 2017, ahead of the United States (13.4%), Saudi Arabia (13.4%) and China (10.9%).
  • In 2017, Jordan is the EU’s 61st-largest trading partner representing 0.1% of the EU’s total trade with the world.
  • Total trade in goods between the EU and Jordan amounted to €4,4 billion in 2017.
  • The EU main imports from Jordan in 2017 were chemicals (€0.1 billion) , textiles and clothing (€0.04 billion), and machinery and transport equipment (€0.04 billion).
  • The EU's exports to Jordan are machinery and transport equipment (€1.3 billion), agricultural products (€0.7 billion) and chemicals (€0.6 billion).

EU-Jordan: Trade in goods

Trade in goods 2015-2017, € billions
Year EU imports EU exports Balance
2015 0.4 4.0 3.6
2016 0.3 4.1 3.7
2017 0.4 4.1 3.8

EU-Jordan: Trade in services

Trade in services 2014-2016, € billions
Year EU imports EU exports Balance
2014 0.7 1.4 0.8
2015 0.5 0.9 0.4
2016 0.5 0.8 0.4

EU-Jordan: Foreign direct investment

Foreign direct investment 2016, € billions
Year Inward stocks Outward stocks Balance
2016 0.0 3.0 3.0

Date of retrieval: 16/04/2018

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 covered such as trade in services, government procurement and investment protection.

The DCFTA 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.

As part of the preparatory process for a DCFTA an independent contractor did a Sustainability Impact Assessment (SIA) in 2014. However, the actual negotiation have not been started as Jordan has so far not been prepared to do so.

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 harmonising their legislation on 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.

The Commission as the Secretariat of the PEM Convention has launched a process of modernising the PEM rules with the objective of finalising the revision at technical level with the PEM parties by end of 2018.

Tax and customs information on Mediterranean preferential Rules of Origin

Trading with Jordan