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INTRODUCTION ON THE JORDAN-EU FREE TRADE AGREEMENT 1
I. Introduction
The historical relationship and the geographical location between the EU countries and the MED countries had an effect on their economic relationship in general and their trade situation in particular. The EU countries are considered to be the main trading partners of the MED countries. Acknowledgment of these historical, geographical and economic ties was materialized as far as 1976 when Tunisia, Morocco, and Algeria signed bilateral trade protocols with the EU. Furthermore, Jordan, Syria, Lebanon and Egypt signed similar protocols by 1977.
In light of the EU’s initiative in implementing a new policy to bring its relations with MED countries within a single comprehensive framework of cooperation, the Barcelona process took place during Nov 27-28, 1995, and included the 15 EU countries and 12 of the MED countries. The EU signed an Association Agreement with Jordan on Nov 24, 1997, was ratified by the Jordanian Parliament in September 1999 and came into force on May 1,2002 after being ratified by all the 15 EU countries. The signing of this agreement came in light of the government’s commitment towards trade liberalization that was accelerated since the mid 90s. The agreement revolves around three major themes; political, economic and financial, and social and cultural.
1. Political and Security Partnership
This section addresses the principles that govern cooperation in the political field. This initiative involves a dialogue that leads to the adoption of common principles by the partners, emphasizing the achievement or movement toward peace, security, democracy, human rights, and regional development as the engine for change.
2. Economic and Financial Partnership
This component aims at establishing a Euro-Jordanian Free Trade Area over a transitional period of twelve years. The free trade area shall be based on the provisions of this Agreement as well as the General Agreement on Tariffs and Trade (GATT) and the General Agreement on Services (GATS). The association agreement covers: trade in industrial and agricultural products, right of establishment, trade in services, payments and capital movements, competition, intellectual property rights, financial co-operation, economic co-operation in the field of industry, agriculture and investment, standards and measurements, transportation, telecommunications and energy, science and technology, environment and tourism, statistics, and the fight against illegal drugs. Also, in this regards, the MEDA programme has been updated to offer technical and financial support to the Mediterranean countries to allow them to implement the necessary economic reforms and to lessen the consequences of economic transformation.
3. Social, cultural and Human Partnership:
This section addresses the principles that govern cooperation in the cultural and social fields. Emphasis is placed on education, training, youth, culture, women’s role in development, migrant population groups and health. Greater co-operation in the field of home affairs and justice is also envisaged, with action in particular against drug trafficking, terrorism, and international crime.
II. Jordan’s commitments under the EU- Jordan Association Agreement
The following comprises the main commitments within the context of the Eu-Jordan Association Agreement.
1. Trade in Industrial Products
The agreement entails reaching a free trade area in industrial goods between Jordan and the European Union according to the following:
Ø European exports into Jordan are exempted from duties, over a transitional period of twelve years upon entry into force of the agreement in accordance with the following arrangements:
Ø A list of 492 industrial inputs that are exempt immediately upon entry into force of the agreement.
Ø Tariffs on products that are currently subject to 5% or 10% custom tariffs will be reduced starting the first year after the agreement comes into force, with a 20% yearly reduction in custom tariffs, and shall be totally abolished by the fifth year.
Ø Tariffs on products that are currently subject to 20%, 30% or 40% custom tariffs will be reduced starting the fifth year of the agreement coming into force, with a 10% yearly reduction in custom tariffs, and shall be totally abolished by year twelve.
Ø Tariffs on Processed agricultural products will be reduced starting the fifth year of the agreement coming into force, with a 10% yearly reduction in custom tariffs, and shall reach 50% of the basic duty by ninth year.
Ø Exemptions will not apply to the negative list of products included in Annex-IV of the Association Agreement, which consists of cigarettes, alcohol, used vehicles, used furniture, tomato past, and used clothes and shoes.
2. Trade in Agricultural Products
The agreement constitutes of an agricultural calendar that organizes Jordan’s exports of agricultural products to the EU market as follows;
Ø Products exported free of customs duties and with neither tariff quotas nor time restrictions include: molochia, okra, certain types of pepper, dates, dried vegetables, citrus juices, crushed red pepper, grapefruit, and orange.
Ø Products exported free of customs duties and with no tariff quotas but within an agreed timetable include: tomato, garlic, cucumber, beans, aubergines, sweet pepper, parsley, courgettes, fennel, melon, watermelon, Onions and shallots, Carrots, celery, and fresh grapes.
Ø Products exported free of customs duties but with agreed tariff quotas and timetables include: new potatoes, Cabbage, lettuce, asparagus and strawberry.
Ø Products exported without tariff quotas and timetables and with reduced customs duties include: mango, guava.
Ø Products exported free of customs duties but with agreed tariff quotas and without timetables include: processed fruit and vegetables, tomato concentrates, white cheese of sheep milk, fresh mandarins, fresh lemons, roses, and cut flowers.
Ø Products exported within agreed timetable and with reduced customs duties include figs.
3. Removing non –tariff restrictions
Ø No new quantitative restriction on imports and measures having equivalent effect shall be introduced in trade between the Community and Jordan.
Ø Quantitative restrictions on imports and measures having equivalent effect on trade between the Community and Jordan shall be abolished upon the entry into force of this Agreement.
Ø The Community and Jordan shall not apply to exports between themselves either customs duties or charges having equivalent effect, or quantitative restrictions or measures having equivalent effect.
4. Rules of Origin
Ø The EU-Jordan Association Agreement provides a system of bilateral cumulation between Jordan and EU. The European Union has approved offering Jordan the diagonal system of Cumulation through the Pan European System of Cumulation. In this regard, Jordan has to apply the minimum requirements of working or processing carried out on non-originating materials to confer originating status that are mentioned in the third protocol attached to the agreement.
5. Right of Establishment
Ø Jordan is committed to grant for the establishment of Community companies in its territory treatment no less favorable than that accorded to its own companies or to companies of any third country whichever is better.
Ø The agreement displays reservation lists that both Jordan and the European Union list sectors that are not open for investment. The European reservation list includes mining, fishing, real estate purchase, audio-visual services including radio, telecommunications services including mobile and satellite services, agriculture, and news agency services.
6. Trade in Services
The EU Member States and Jordan shall use their best endeavors to allow progressive liberalization of trade in services.
7. Movement of Capital
Current payments connected to the movement of goods, persons, services and capital within the framework of this Agreement shall be free of restrictions.
8. Competition
Jordan’s commitment regarding competition entails the prevention of monopolistic practices, state monopolies of a commercial character, public enterprises and enterprises to which special or exclusive rights have been granted.
9. Public Procurement
Jordan is committed to hold consultations with the Association Council on implementing a gradual liberalization of public procurement.
10. Intellectual, Industrial and Commercial Rights
As stated in the agreement Jordan shall accede to seven multilateral conventions on intellectual property rights before the end of the fifth year after entry into force of the association agreement which are:
Ø Bern Convention for the protection of literary and artistic works (Paris Act 1971);
Ø The Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organisations (Rome, 1961);
Ø Nice Agreement concerning the International Classification of Goods and Services for the purposes of the Registration of Marks (Geneva Act 1977 and amended in 1979)
Ø Madrid Agreement concerning the International Registration of Marks (Stockholm Act 1967 and amended in 1979);
Ø Protocol relating to the Madrid Agreement concerning the International Registration of Marks (Madrid 1989);
Ø Budapest Treaty on the International Recognition of the Deposit of Micro‑organisms for the purposes of Patent Procedure (1977, modified in 1980);
Ø The International Convention for Protection of New Varieties of Plants (UPOV) (Geneva Act 1991).
Furthermore, Jordan has to accede to the patent co-operation treaty (Washington 1970, modified in 1984) within the first seven years of the application of the association agreement.
For Further Details, Please Contact:
Technical Support Unit
Ministry of Planning
Tel: 9626 464 4466
Fax: 9626 464 9341
1 The agreement is available at JEDCO's website on the following address: www.agreements.jedco.gov.jo/eu_doc/eu_agreement.html