Trade / Jordan

Jordan’s business community paves way for trade revival with Iraq

Proactive engagement with Iraq through the Jordanian government and the country's largest business lobby, the Amman Chamber of Industry, has once again demonstrated the nation's ability for hatching trade deals.

Jordan’s business community paves way for trade revival with Iraq

Jordan’s reputation as a trade and re-export hub hit a critical impasse in 2015. After intermittent blockages, the borders with Iraq finally slammed shut, dragging down exports with them. “Our exports to Iraq used to be 18 percent of the total, and then they shrunk to less than 8 percent; we lost more than half,” remembers Ziad Homsi, chairman of the Amman Chamber of Industry.

Yet, recent political breakthroughs in Iraq have sparked hope that borders may soon be opened once again. In anticipation for this moment, the Royal Government of Jordan has made several trips to Baghdad to negotiate trade policy, taking special aim to slash away at a proposed tariff. Late last year, Iraq made a dramatic decision to announce a 30 percent import tax on all goods. This merited a high-level bilateral meeting, including both nations’ prime minsters, as well as the Amman Chamber of Industry, Jordan’s largest business lobby, representing over 8,000 companies.

“An official promise to exclude most of Jordanian exports to Iraq from a 30% tariff was recently received from the Iraqi government,” said Homsi, who is also a senator in the Jordanian Senate. “A joint committee between the two governments has been established, and they are discussing a table of products to be exempted, so its fair to say the agreement is underway.”

“[We received] an official promise to exclude most of Jordanian exports to Iraq from a 30% tariff.” – Ziad Homsi, Chairman of the Amman Chamber of Industry

Jordan is no stranger to making exceptional trade deals. For sure, the Arab nation owes its celebrated reputation as a trade hub to its ability for hatching enviable agreements with the world’s most lucrative markets. “Jordan enjoys free trade agreements with the US, the EU, Canada, Singapore, and with 22 Arab countries, duty free. Through these deals, investors in Jordan have access to more than 1.6 billion consumers around the world,” says Homsi.

The job to write out an agreement to further Iraq’s reintegration to global trade should thus come naturally to Jordan, but this is only half of the picture. “Nowadays, the business world is occupied with the rebuilding of Iraq, but we believe that the emerging issue is the rebuilding of Syria,” insists Homsi. “Jordan is considered to be a politically stable nation with enviable tax schemes (see chart) and access to human capital. All of this can be put to great use to rebuild our Arab neighbours,” he observes.