Diversification key to reap maximum benefits of Jordan-EU export scheme — JCI chairman

AMMAN — The degree to which exporters and industrial facilities benefited from the simplified rules of origin (RoO) scheme between Jordan and the European Union (EU) remains “humble”, according to the Jordan Chamber of Industry (JCI). 

Simplification of EU rules of origin 

The agreement came into effect in 2016 to boost national exports to European Union (EU) countries. In 2018, it was amended, extending its duration to 2030 instead of 2026, and adding more facilities to “encourage Jordanian exporters”, JCI Chairman Fathi Jaghbir said in a statement to The Jordan Times.

For example, the scheme now applies to all development zones and industrial areas and estates in Jordan, instead of just 18, provided that they employ Jordanians as well as a specific percentage of Syrian refugees, which was reduced as per the new amendments, Jaghbir explained.

“However, the degree to which industrial facilities benefited from this agreement didn’t reach the expected level due to a number of challenges, including meeting the European technical requirements and standards imposed on some national products,” he said. 

Exports volume to EU countries 

Eighty per cent of national exports to the EU, roughly half of which include clothing products and fertilisers, are concentrated in the Netherlands, Belgium, Spain, Finland, Romania and Italy, according to Jaghbir. 

National exports to the Netherlands in particular account for roughly 29 per cent, or JD123 million, of the Kingdom’s total exports to the EU, he noted.

Since the amendments and up until July 2022, only 14 industrial companies, mostly from the clothing, plastic manufacturing and mineral industries, exported products to EU countries, with an export value exceeding JD200 million, he added.

Over the past six years, national exports to EU countries recorded marked growth, approaching 38.5 per cent. Export values increased from JD111 million in 2017 to JD431 million by the end of 2022, while exports to the EU during the first two months of 2023 reached JD39 million, Jaghbir said.

The growth in the 2022 export volume was the highest since the signing of the agreement, as it exceeded double that of 2021, he noted.

National exports of carnallite, sylvite and potash in particular recorded significant growth last year, increasing by more than five-fold compared to 2021, reaching roughly JD163.2 million, Jaghbir added. 

“This can be explained by an increased global interest in achieving food security, as these materials constitute an essential element in fertilisers manufacturing,” he continued. 

Maximising benefits 

Jaghbir pointed out that “maximising” the potential benefits of this agreement and increasing the competitiveness of national products both on a local and international level requires “reducing production costs as well as protecting local products by avoiding overflowing the domestic market with foreign products”. 

Supporting national products in global markets requires “diversifying” export products and increasing the number of targeted markets, he said. 

This can be achieved through the effective implementation of the Economic Modernisation Vision and the national export strategy, which recommends providing a detailed database on potential export opportunities and networking with potential buyers in all global markets by increasing local products’ participation in international and local trade exhibitions, he added. 

Taking advantage of all export opportunities to EU countries in particular requires work on several axes, mostly related to requirements and technical standards set by the EU, Jaghbir added. 

“An example of this would be increasing adherence to the regulations related to the REACH (Registration, Evaluation, Authorisation and Restrictions of Chemical substances) and the Classification, Labelling and Packaging (CLP) of substances and mixtures,” he continued. 

The JCI chairman also recommended proving a traceability system in food manufacturing to track and document the value chains that local products pass through during the production process. 

“It’s also important to focus on building strong long-term partnerships between local manufacturers and European buyers, in addition to participating in European exhibitions and trade events,” he said.