Realizing the interdependence of the economies of the world, Jordan has taken the lead in a number of areas aimed at integrating its economy with the region and the world. On the trade side, the government is determined to further liberalize the trade regime in order to improve the efficiency of Jordanian firms and meet the challenges of increased international competition.
Jordan has also launched the first formal round of negotiations for accession to the World Trade Organization, and has submitted a detailed memorandum to WTO members describing the status and the prospects of the country's economy with special emphasis on trade. The response of the WTO to this memorandum has been positive so far, and Jordan may become a member in the WTO in 1998.
The Jordan-European Union Free Trade Agreement and other Agreements
The Partnership Agreement with the European Union is one of the early benefits and a significant manifestation of Jordan's drive toward integrating its economy both on a regional and global level. The agreement calls for the gradual removal of trade barriers and the establishment of a free trade zone with the European Community over a twelve year period.
In addition to benefits in the political, social and cultural fields, the new Partnership Agreement promises distinct economic yields for Jordan's development. The accord, which will come into force on January 1, 1999, will:
Moreover, the EU has pledged to set up a special fund for assisting Jordanian industries to adjust to the requirements of the agreement, enhance their export capacity and improve their competitiveness.
Under the Partnership Agreement, and subject to further arrangements with Mediterranean countries, Jordan will benefit from cumulative rules of origin, whereby the Kingdom can gather or accumulate inputs imported from Europe and neighboring countries to produce goods which would then be considered as having originated from Jordan.
The Jordan-US Bilateral Investment Treaty
In July 1997, Jordan and the United States signed a bilateral agreement on the encouragement and reciprocal protection of investment. The agreement emphasizes the desire of both nations to promote greater economic cooperation between them, and to mutually allow the free flow of investment between both countries. The agreement:
Jordan has concluded similar agreements with Germany, Switzerland, France, the United Kingdom, Romania, Turkey, Malaysia, Tunisia, Yemen, Egypt, Italy Algeria and Indonesia.