Israel and Jordan plan to sign an upgraded trade agreement on Thursday. The agreement includes a one-third reduction of customs duties on Israeli exports to Jordan, while customs duties on Jordanian exports to Israel will be halved. The agreement also stipulates that both sides will continue gradually lowering customs duties, until the duties are totally eliminated in 2010.
The agreement is designed to foster Israeli-Jordanian cooperation in order to obtain an exemption from customs duties on exports to the European Union (EU), similar to the customs and quota exemption on exports to the US from the qualifying industrial zones (QIZ) in Jordan.
Israel and Jordan signed a partial trade agreement in 1995, which Israel claims provided benefits mostly for Jordan. Minister of Industry, Trade, and Labor Ehud Olmert said that the current agreement would be Israel’s most advanced trade treaty with an Arab country.
The agreement will become effective as soon as it is approved in early 2005.
The agreement will enable Israel and Jordan to accumulate joint production under the pan-European accumulation rules, which will make possible customs and quota-exempt Israel-Jordanian exports to the EU.
The current stage in upgrading the trade agreement is due to the anticipated extension of the pan-European accumulation system to Mediterranean basin countries in the first quarter of 2005.
Published by Globes [online], Israel business news - www.globes.co.il - on December 20, 2004