In 2016, the EU took an unprecedented decision to relax the rules of origin for 52 types of Jordanian imports, a scheme that incentivized manufacturers to hire a percentage of refugee labor in special economic zones in order to qualify. Today, the EU’s ambassador to Jordan, Andrea Fontana, is working to further define this monumental agreement to ensure a resilient and inclusive Jordan. Fontana met with The Business Report in Amman to provide an update on the EU-Jordanian partnership and trade relationship, which has grown from €2.4 billion in 2002 to €4.5 billion in 2017, an 87.5% increase.
In the eyes of the EU, how has the refugee crisis impacted Jordan?
Jordan is hosting over 650,000 Syrian refugees registered with UNHCR, and the regional crisis in Iraq and Syria remains one of key challenges with a direct impact on Jordan and its economy. The stabilisation of neighbouring countries, particularly by boosting economic growth, is the EU’s main political priority both in Jordan and in the entire region.
How is the EU supporting vulnerable people in Jordan?
At the EU level, we have helped increase the number of double-shift schools for Syrians, to build and rehabilitate schools, support tuition fees, and employ new teachers and provide them with training and books, as well as cover costs for operations, maintenance and furniture in these schools. The EU also funds scholarships for vulnerable Jordanians and Syrian refugees to access higher education studies in Jordan. In that regard, we have partnered with vocational training centers and the private sector in order to provide training programmes that match skills needed in the job market.
Are there any projects you are particularly proud of?
Through our collaboration with the International Labour Organisation, we funded the development of five employment centers in the Zaatari refugee camp, the largest camp for displaced Syrians in the world, and directorates across Jordan. I will never forget the excitement I saw in peoples’ eyes when I attended the first Zaatari camp job fair. With 50 companies and 1,300 available vacancies, it was a first step to introducing the community to the benefits of formalised employment.
How will the EU’s relaxed rules of origin for Jordan benefit trade?
It serves an incentive for the private sector to adjust the quality of its products to meet European demand, while also encouraging companies to take advantage of the wider labor market, including Syrian workers. Second, the agreement can act as a driver for reform, both in order to improve the investment climate in Jordan and attract FDI, but also to create stable and transparent requirements in order to absorb both Syrians and additional Jordanians into added-value sectors.
Which sectors will most benefit?
We aim to support the chemicals, plastic and rubber, home appliances, and tourism and MICE industries. Some of these sectors are included in the unique scheme for the relaxed of the rules of origin for goods from Jordan, which include 52 product categories, such as paints, chemicals, cosmetics, textiles, electronic devices, furniture and cables.
Do you believe Jordan can even meet the expectations of the EU’s relaxed rules?
While the EU is currently looking into a formal request for further flexibilities from the government, more can be done to take advantage of this unique opportunity. An improved investment climate and regulatory predictability will be key to increasing FDI, one of the key levers needed for Jordan to bring real GDP growth rates to about 7.5% by 2026, as set out in the Jordan 2025 plan. While we commend the government for implementing a plan to review economic legislation, more needs to be done on access to credit, fiscal consolidation, and insolvency.
Are Jordanian companies rising to this challenge?
I was very pleased to see the grit of Jordanian companies that went to Frankfurt in February to meet with EU buyers, and to witness Jordanian textile representatives receiving orders at the Texworld in Paris. These are good steps to show that “Made in Jordan” is becoming a reliable and quality brand name.
The reopening of the Iraqi border did not re-establish Jordanian exports to their pre-war levels, so where is the future of Jordanian trade heading?
While it is good news that trade routes with Iraq have reopened, the pace of trade has been slow. However, as the region stabilises and reconnects, the price competitiveness of Jordanian exports should increase, as it is at the moment weighed down by the cost of energy and transport. In the agricultural sector, for example, the use of technical expertise would help Jordan increase its competitiveness compared to other countries with similar resources.
What is the significance of His Majesty King Abdullah II’s numerous visits to France over the course of the past year?
With €1.5 billion in FDI stock, France ranks 6ᵗʰ in terms of foreign investment in Jordan. France is the largest EU investor in Jordan, with telecommunications representing 66% of French FDI stock. In terms of the France-Jordan collaboration in the field of development, the Agence Française de Développement (AFD) and its subsidiary (PROPARCO) are among the largest donors of bilateral funds to Jordan. At EU level, we are very proud to be cooperating with on a series of projects in the fields of water management, solid waste management, good governance and justice, local development, culture, support to the media and public financial management. France brings unique expertise in the design and implementation of development programmes and remains a close partner of the EU in our common endeavour to promote economic growth in Jordan.