Cancellation of trade agreement with Turkey goes into effect

AMMAN — Jordan on Thursday began imposing custom duties on Turkish imports as the free trade agreement (FTA) between the two countries was terminated, according to a government official.

Custom duties ranging from 20 to 30 per cent are being imposed on Turkish imports, Yanal Barmawi, spokesperson of the Ministry of Industry, Trade and Supply, told The Jordan Times on Thursday.

"The termination of the deal has already gone into effect," said the official.

In May, Jordan officially informed Turkey of its intent to completely terminate the FTA, after efforts to find a “just” solution for the benefit of both sides broke down.

Commenting on the FTA’s termination, Nael Kabariti, president of the Jordan Chamber of Commerce, said: "This is an unfortunate decision that will negatively affect scores of businesses.

"Many traders opened shops and started investments to sell Turkish products and now that the deal is over, the prices of their products will increase and become less competitive, which will result in less revenues and profits," he told The Jordan Times on Thursday.

"Some traders opened businesses only because this FTA was signed. What are they going to do now? I believe some businesses will keep incurring losses in the upcoming period until they are forced to shut down their stores," Kabariti said.

"Jordan terminated the deal as it was the underdog and did not benefit from it as desired, and this is understood, but at the same time there are many other deals that Jordan did not actually benefit from as expected," he added.

In April, Jordan said it was willing to reactivate the FTA, which was suspended in March, if Turkey agreed to meet certain conditions.

The terms included the Turkish side’s consent to protection measures designed to shield local industries, increasing Turkish technical assistance to Jordan as stipulated by the FTA and reconsidering the “strict” rules of origin specifications applied by Turkey.

Jordan wanted Ankara to adopt the same relaxed rules of origin Jordan enjoys under a deal signed with the EU. No agreements were reached following the meetings.

At the time, government officials said that Turkey did not transfer know-how to improve national industries as agreed upon in the deal, adding that Turkey’s exports to Jordan sky rocketed after the deal went into effect.

Before 2011, Turkey’s annual exports to Jordan, excluding oil, were valued at $23 million with custom fees being collected. After the deal went into effect, Turkish exports to Jordan, excluding oil, reached around $135 million annually, and no custom fee disbursements were made to the Treasury from the imports, according to the Amman Chamber of Commerce.