Preferential Trade Agreements and Trade Liberalization Efforts in the OIC Member States
With Special Emphasis on the TPS-OIC
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import partners. Also, Jordan signed several other free trade agreements in the last several
years, including with the US (in addition to another scheme - Qualifying Industrial Zones
(QIZs) - allowing duty free exports to the United States if manufactured in approved enclaves
in Jordan in cooperation with Israel); United Arab Emirates; Turkey, and the Agadir agreement
with Egypt, Morocco, and Tunisia (see below for more details). This implies both improved
market access for Jordanian exports to these markets and of imports from these countries in
Jordan. It is a complex the interplay of all these forces in addition to changes in non-tariff
barriers to trade both affecting all trade and specific to some bilateral flows that affect
changing relative importance of various trade partners of Jordan.
Jordanian exports have not been particularly successful in gaining a higher share of EU market.
This again can be partly explained by limited preference margins in the EU market (given low
initial tariff levels), rising international oil prices (with EU and Jordan both being net
importers) and rising importance of China and other emerging markets in EU imports for
reasons related inter alia to deepening fragmentation of production processes as well as
preferential access to the EU market granted to several other countries.
The EU accounts for around 5% of Jordanian exports, which on the EU side represents below
0.02% of extra-EU imports. These exports are concentrated on chemical products, especially
fertilisers, but over time Jordanian exports to the EU have become more diversified than they
were in mid-1990s. In 1997 exports of the products of top two HS chapters (HS25 - salt,
sulphur, earth, stone plaster, lime and cement and HS31 - fertilisers) accounted for 75% of
total Jordanian exports to the EU. In 2013 two main groups of products (HS31 - fertilisers and
HS28 - inorganic chemicals, precious metal compound, isotope) accounted for 45% of exports
to the EU. Figure 31 provides another illustration of this trend by plotting the evolution of the
trade concentration index for Jordanian exports to the EU that declined markedly around the
mid-2000s.
An empirical study by Copenhagen Economics (2011) does not identify a statistically
significant impact of EU-Jordan FTA on bilateral trade. This is explained by limited preference
margins to the EU and gradual phasing-in of tariff cuts on the side of Jordan (the study utilised
trade data until 2008).