Jordan Times
Thursday, March 6, 2008
Trade surplus with US shrinks
by 37.2% in ‘07
By Samir Ghawi
AMMAN - The Kingdom’s trade surplus with the United States fell 37.2 per cent
last year to $501 million from $798 million in 2006, the American Chamber of
Commerce in Jordan (AmCham-Jordan) announced on Wednesday.
AmCham-Jordan Chairman Raja Khouri told a press conference that the drop was a
combination of lower exports to and higher imports from the US.
Total exports went down by 6.2 per cent to $1.3 billion last year from $1.4
billion in 2006 when the amount was 12.2 per cent higher than the total in 2005.
According to the Jordan Yearly Economic and Trade Bulletin for 2007, issued by
AmCham-Jordan, local exports from the Qualifying Industrial Zones (QIZs) dropped
by 9.7 per cent to $0.9 billion after peaking slightly above the one billion
dollar mark in 2006.
Despite the decline, QIZ exports remained the largest component of the
commercial activity as they accounted for 69.2 per cent of the total sales to
the US last year. In 2006, QIZ exports accounted for 71.9 per cent of total
sales.
Khouri predicted QIZ exports to continue dropping this year but, at best, may
stagnate at the present low level.
“Industries are shifting from the QIZ programme to the free trade mechanism
because it is more accommodating, less cumbersome and less expensive than buying
input material from Israel,” the chairman of AmCham-Jordan explained, noting
that exports under the Free Trade Agreement with the US edged up slightly by 1.2
per cent to $0.3 billion.
Other factors blamed by Khouri for the regression were competition from QIZs in
Egypt and lack of local dynamism to exploit the benefits of the Free Trade
Agreement with the US.
“If exports under the Free Trade Agreement do not go up considerably, Jordan’s
trade balance with the US may level off in few years time and may even turn into
a surplus in favour of the US,” Khouri said stressing the need for a commercial
entity to shoulder the task of moving Jordanian products to the American market.
He stated that in 2010 there will be no customs tarif on imports from US.
According to the AmCham-Jordan chief, only few large Jordanian companies are
able to go through the complex and sophisticated process of selling in the US.
He indicated that most of the local industrial sector is small- and medium-sized
and used to traditional export methods but not up to the level required by
developed countries.
The Jordan Yearly Economic and Trade Bulletin for 2007 also showed a 33.4 per
cent surge in imports from the US to $831.7 million last year compared to $623
million in 2006.
Imports were mainly transport equipment, road vehicles, cereals and cereal
preparations, industrial machinery and equipment and miscellaneous manufacturing
articles. The highest growth in imports was registered by transport equipment
(262.6 per cent), followed by organic chemicals (125.3 per cent) and paper and
paperboard articles (117.8 per cent).
About 55 per cent of imports from the US during the first three quarters of 2007
originated from the District of Colombia, California, Ohio, Texas and New York.
Besides the trade statistics with the US, AmCham-Jordan detailed economic
information related to Jordan’s gross domestic product, inflation, unemployment,
current account deficit, fiscal deficit, public debt, domestic revenues and
public expenditure in addition to investments.