Jordan has become a “clothing magnet” as U.S. companies such as Wal-Mart, Target and Hanes have set up factories to reduce costs by eliminating tariffs. In the first year, Jordan increased its exports by 213% and created 30,000 jobs. Until 2002, Jordan had a marginal trade surplus with the United States. [1] Five years after the free trade agreement came into force, Jordan`s exports to the United States had increased twenty-fold; Jordan`s clothing exports to the United States totaled $1.2 billion in 2005. [6] Most Jordanian exports to the United States come from one in 114 companies. [7] The agreement also contains trade-related environmental and labour provisions. These provisions will not require either country to adopt new labour or environmental laws, and each country reserves the right to set and amend its own labour and environmental standards. As part of the agreement, both countries reaffirm the importance of not renouncing or revoking their labour or environmental laws in order to promote trade and are committed to effectively enforcing their domestic labour and environmental laws. The Article on Public Procurement (Article 16) contains a revision clause aimed at further liberalizing public procurement on the basis of non-discrimination and reciprocity. The agreement contains provisions on subsidies and anti-dumping measures, which are in line with WTO rules, as well as safeguard procedures.
The Free Trade Agreement is the first trade agreement to contain substantial provisions on e-commerce, a step that should help promote a global free trade agenda in a critical sector for U.S. high-tech and multimedia companies. The two countries agreed to seek to avoid tariffs on electronic transmissions, impose unnecessary barriers to market access for digitized products, and impede the ability to provide services electronically. These provisions are also part of service commitments, which together aim to encourage investment in new technologies and encourage the innovative use of networks for the provision of products and services. The agreement will significantly liberalize bilateral trade in services in a wide range of service sectors. They provide for significant concessions on both sides, taking into account the respective sensitivities. Each agreement contains specific rules of origin, usually based on “fully preserved” criteria. While Jordan`s trade relations with the United States are strong, the kingdom has been actively committed to further integration into the regional economy. GAFTA is part of efforts to strengthen economic cooperation between the 22 Arab League member states.
The agreement entered into force in its entirety in 2005 and resulted in numerous exemptions from customs duties and taxes. GAFTA significantly increased Jordan`s trade relations with neighbouring countries in 2014 and the volume of trade with GAFTA members amounted to JD 7.53 billion ($10.59 billion). The Ministry of Labour is working with the DOL-funded Better Work program to improve its understanding of internationally recognized labour standards and the audit process in the apparel sector, including assigning labour inspectors to the project. The current commitment focuses on internalizing the lessons learned from Better Work, in order to build the capacity of labour inspectors, on carrying out inspections including dormitories in QIZs, and on continuing advertising efforts to ensure that stakeholders understand their legal rights to participate in trade unions and that they enjoy jobs without discrimination or harassment.
