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    08-Jul-2020

JSF recommends reinstatement of Jordan-Turkey free trade agreement

 

The Jordan Times

 

AMMAN — The Jordan Strategy Forum has recommended a reconsideration of the decision to cancel free trade agreement (FTA) between Jordan and Turkey, which was terminated by the Kingdom in 2018.
 
In a statement made available to The Jordan Times, the forum outlined the recent trade history of the two nations, noting that the FTA was originally signed in 2011.
 
The FTA eliminated tariff barriers and facilitated bilateral trade and investments. Following the signing of the FTA, the trading performance of Jordan and Turkey came out to the advantage of the latter, according to the statement.
 
Jordanian imports from Turkey witnessed an increase from JD393 million in 2011 to JD570 million in 2012 and to more than JD600 million by the end of 2019. These increases in Jordan’s imports from Turkey are the result of the FTA, the statement said. 
 
Meanwhile, during the same period — from 2011 to 2019 — Jordanian exports to Turkey increased marginally. This trading record has resulted in a growing trade deficit with Turkey. 
 
Overtime, the increase in Jordan’s imports from Turkey has been largely due to textiles and textile articles and machines and appliances. The marginal increase in Jordan’s exports to Turkey, on the other hand, can be mainly attributed to chemical products.
 
Jordan has also received "negligible inflows" of foreign direct investment from Turkey.
 
“It is clear that the FTA between Jordan and Turkey has worked to the advantage of Turkey. Turkish products have a comparative advantage over Jordanian products. Simple laws of economics infer that cheaper goods have higher demand,” the statement read.
 
To remedy its trading performance, Jordan in 2018 decided to terminate the FTA with Turkey. Following this move, imports from Turkey kept pace and witnessed an increase from JD547 million in 2018 to JD625 million in 2019. Jordan exports to Turkey, however, decreased from JD58 million in 2018 to JD32 million in 2019. 
 
“These increases and decreases may change in future years. However, given the economic importance of Turkey, it makes sense for both countries to renegotiate the agreement and make it more favourable to Jordan,” the forum said in the statement.
 
The Jordan Strategy Forum shares important economic information that is collected from various local and international sources with the aim of raising economic and social awareness. This is done in order to track the latest developments and suggest solutions that would develop and strengthen the national economy, according to the statement.
 
 

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