Jordan Times
Monday, December 13, 2004
Jordanians, Israelis pinpoint
new areas for cooperation during the next ten years
By Rami Abdelrahman
SHEIKH HUSSEIN BRIDGE — Jordanians and Israelis, meeting here on Sunday,
pinpointed agriculture, tourism, infrastructure and information technology as
potential areas for economic cooperation during the next ten years.
Since signing a peace treaty ten years ago, economic relations between Jordan
and Israel have been improving in some areas, like garments and transport, but
officials and businessmen from both sides would like to see “untapped potential
areas” addressed by governments and private sectors to ensure further
improvements of these relations.
Yitzhak Gal, an economic adviser to the Israeli-Jordanian Chamber of Commerce
summed the challenges for the second decade of peace in two areas: To strengthen
and widen economic cooperation in the success areas of export-oriented industry,
transit-trade and transportation, and, secondly, to diversify economic
cooperation to include new sectors.
Gal, among officials from both countries, believes that the Qualifying
Industrial Zones (QIZs) agreement between both countries still stands a chance
in the face of the ending multi-fiber agreement (MFA) this year, and the signing
of a QIZ agreement with Egypt. But still, other sectors should also be tackled,
he stressed.
“Competition with Egypt's QIZ is only going to make Jordan more competent and
its exports more cost-effective,” Daniel Kurtzer, US ambassador to Israel
suggests, noting that the Kingdom is already making plans and taking measures to
make QIZ-dominant garment exports more cost-competitive.
According to Gal, economic analysis shows that the Jordanian QIZs will retain
their comparative advantage vis-a -vis potential competitors in China, Turkey
and other countries after the end of the MFA.
“Steep US tariffs (of up to 33 per cent) will provide protection from cheap
imports and to offset the 15 per cent disadvantage, in production cost, of the
Jordanian QIZ, compared to Chinese products,” Gal explained in a presentation on
economic relations between 1994-2004.
According to Johannes Gerster of the Konrad Adrenauer Foundation, the expected
trilateral agreement between Jordan, Israel and European Union (EU) will give
Jordanian QIZs another advantage, as exporters would be able to export the same
product to the EU as well as keeping the level of exports to the US.
“The primary challenge is to refocus industrial cooperation to adjust to
post-2005 environment, by taking advantage of new opportunities presented by the
Jordanian Free Trade Agreement with the US, and the new QIZ-style agreement with
EU,” Gal said.
On transportation, which was a major topic at the meeting due to the persisting
congestion problem in Aqaba and Jordan's QIZ reliance on Israeli ports instead ,
Gal added that the major challenge is to facilitate the orderly and
cost-effective use of Israeli ports, by Jordanian Western-bound exports, and
Eastern-bound transit-trade.
He also urged to put into place the required infrastructure and procedures for
long-range development of Eastern-bound transit trade.
Transport Minister Saud Nsairat told the meeting that both countries are
implementing wide expansion plans for the logistical aspects of their border to
meet the growing demand and to allow door-to-door transport system to work
efficiently once those expansion projects are completed next April.
Israel said it is investing approximately $300 million to upgrade the equipment
and facilities of its Haifa port.
However, Jordanian investors and foreign investors in the Kingdom complained to
the Israeli authorities about delays in Visa granting due to “security checks,”
which was making their transportation in and out of Israel more difficult.
Israeli authorities said this should be tackled by providing a solution either
by having short-lists of such investors, or by other means.
The QIZ agreement helped boost the country's exports to the US from less than
$20 million in 1999, to an expected $1 billion this year.