Ammon News - AMMONNEWS - The EU and Jordan reconfirmed their solid partnership, strengthening their relations on political, security, trade and cooperation matters, at the 10th EU-Jordan Association Committee in Amman this week. In the margins of the meeting, a decision was reached to simplify the rules of origin that Jordanian exporters use in their trade with the EU. This will boost investment and jobs for Jordanians, but also Syrian refugees the country is hosting. It is part of the EU’s support to Jordan, including in response to the impact of the Syrian refugee crisis on the country and another positive step forward towards the finalisation of the partnership priorities and compact.

Federica Mogherini, High Representative for Foreign Affairs and Security Policy/Vice- President of the Commission, said: “Jordan, with its outstanding political engagement in the region, is a key partner of the European Union. It has also been making since many years a generous and invaluable work to host refugees. As EU, we delivered in our promise to stand by the Jordanian leadership and people: Jordan will see an increase of investments and creation of more jobs for Jordanians as well as for Syrian refugees. This new EU support will help Jordan in implementing its current political and economic reforms. And we will keep working together, for the sake of Jordan, of the Syrian refugees, and of the stability of the whole region.”

As part of its commitments made at the 4 February London Conferences on the Syrian crisis, the EU proposed to review the rules of origin protocol to the EU-Jordan Association Agreement by the summer, complementing financial and technical assistance. This will allow producers in Jordan to use an alternative, more relaxed set of rules of origin for exports to the EU, provided a number of conditions are met.

EU Commissioner for Trade Cecilia Malmström said: “This agreement will make it easier for Jordan to access the EU market and make better use of the preferential access to the EU market that it already enjoys. Together with other EU efforts to support Jordan, these measures will help boost investment, export and employment opportunities in the country, including for Syrian refugees. I look forward to working with Jordan to maximise the impact of these efforts.”

The new scheme will apply to 52 product groups for ten years. It will cover a wide range of manufactured products and be available to producers in 18 specified industrial areas and development zones which employ a minimum percentage of Syrian refugees (15% at the outset, increasing to 25% in year three). Regular, joint monitoring of the rules of origin scheme will also be important so that potential adjustments can be considered during a mid-term review.

Johannes Hahn, European Commissioner for European Neighbourhood Policy and Enlargement Negotiations, added: “These decisions will strengthen Jordan’s resilience in facing the consequences of the Syrian refugee crisis. The EU commends the outstanding efforts Jordan has undertaken since the onset of the crisis and is fully honouring its pledges made in London. The EU will continue to support Jordan in its economic and political reform efforts, in order to boost the competitiveness of Jordan’s private-sector. This will help Jordan take full advantage of the potential of the initiative on rules of origin and improve the employability of both Jordanians and refugees.”

Background

As a result of the prolonged civil conflict in neighbouring Syria, Jordan is currently hosting over 657.400 Syrian refugees. This influx of refugees has caused a major economic shock and is a potential source of fragility for the country. Additionally, the wider situation in the region has disrupted Jordan’s traditional trade patterns and affected inward tourism and investment. The European Union has been assisting Jordan in the efforts to deal with this crisis.

New European Neighbourhood Policy (ENP) – Partnership Priorities/Compact

In line with the revised European Neighbourhood Policy, the EU and Jordan have embarked on discussions on priorities for their partnership for the coming years. An ambitious partnership is envisaged, with the EU committed to support economic and political reform efforts undertaken by Jordan and extending regular political dialogue and cooperation to security, mobility, the fight against terrorism and violent extremism.

An EU-Jordan Compact with mutual commitments in view of sustaining Jordan’s resilience in light of the Syria refugee crisis will be an integral part of the newly developed partnership priorities.

The Partnership priorities and Compact are expected to be formally adopted in the coming months. This is also in line with the June migration communication.

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.

The agreed relaxations of rules of origin cover a wide range of manufactured products and include both items that Jordan currently exports in small volumes to the EU and others where currently there is no trade. The alternative rules of origin now made available for Jordanian exports of these products to the EU are those applied by the EU to imports from Least-Developed Countries (LDCs) under the EU’s Everything But Arms (EBA) initiative.

A mid-term review in year four will consider whether any changes should be made in light of experience. In addition, the EU and Jordan have agreed that once Jordan’s own global target of bringing around 200,000 Syrian refugees into the formal labour market is achieved, they will look at ways to further simplify the initiative.

EU/Jordan Association Agreement and Trade Relations

The EU’s Association Agreement with Jordan entered into force on 1 May 2002. It progressively established a Free Trade Area between the EU and Jordan over a transitional period of 12 years. In addition, an agreement on further liberalisation of agricultural products entered into force in 2007.

In 2015, the EU was Jordan’s most important trading partner with total trade in goods amounting to €4.4 billion. Jordan’s exports to the EU market – €350 million in 2015 – represent 0.02% of total EU imports. The structure of Jordan’s exports is concentrated in a limited number of sectors, such as clothing, phosphates and phosphate-based fertilizers, chemicals, machinery and transport equipment.

*New Europe