Economists urge stronger economic relations between Jordan and Palestine

HM King Abbas
His Majesty King Abdullah II and His Royal Highness Crown Prince Al Hussein are received by Palestinian President Mahmoud Abbas upon arrival at the Palestinian presidency in Ramallah. (Photo: Royal Court)
AMMAN — Economists are calling for stronger economic relations between Jordan and Palestine as common interests and opportunities would help increase the volume of trade for both countries. اضافة اعلان

The balance of trade between Jordan and Palestine amounted to JD179.4 million in 2021; Jordan’s exports to Palestine stand at JD132.2 million while it imports goods worth JD47.2 million.

As a result, the trade balance favors Jordan by JD85 million, according to data the Department of Statistics made available to the Amman Chamber of Commerce. 

Political economy specialist Zayyan Zawaneh told Jordan News that stronger relations are in the interest of both Jordan and Palestine, and are needed as “both are in the same boat and need each other”.

He added that in light of the regional alliances and relations, Jordan and Palestine should coordinate strategies to take advantage of commercial and economic opportunities.

For example, he said, the Paris agreement increased the ceiling for trade exchange to $700 million, and he is “hoping that the two sides could achieve it”.

The Paris Agreement regulates the import of goods needed by the Palestinians and imposes Israeli conditions on the flow of goods from external countries to the Palestinian market.

“If the Israelis did not place further obstacles, the relationship would have expanded,” Zawaneh said, adding that “the two small markets would become a market that exceeds 14 million consumers, which serves them both.”

He also urged the private sector to play a role in this area.

Former vice-chairman of the Amman Chamber of Commerce Musa Saket told Jordan News that the Paris agreement is one of the main obstacles in the economic relationship between Palestine and its Arab neighbors because it limits them.

Proof of that, he said, is the fact that Palestinian imports from different markets, especially the Israeli market, reached $6 billion, while the trade exchange between Jordan and Palestine did not go above $160 million, “which is 2 percent of the Palestinian imports”.

“This did not improve or grow even though in 2021 Naftali Bennett, accompanied by Minister of Foreign Affairs Ayman Safadi, announced that they were working on raising the trade exchange ceiling to $700 million,” Saket said.

Instead of the JD700 million ceilings, Saket suggested creating a 10-year plan to increase the trade exchange by 10 to 15 percent annually. “There should be economic growth since Palestine has the biggest border with Jordan,” he said.

However, Saket pointed out that Jordan would still have logistical issues even if trade exchanges increased beyond JD700 million, since Jordanian trucks arriving at the border would have all their cargo taken out for inspection and reloaded on different trucks, which increases the possibility of products getting damaged and increases shipping costs.

“Since they have advanced technologies for inspection, they should ease their procedures and allow Jordanian trucks to enter without such complications. There is a big potential that we are not using. The Jordanian government should have a role in this because we have a peace treaty that is not beneficial for us,” Saket added.

Former minister for the state of economic affairs Yusuf Mansur told Jordan News that the economic relations with Palestine are significant, and that although Jordan has been trying for a long time to increase trade with Palestine, the Israeli government maintains many border restrictions and technical barriers which prevent Jordanian goods from accessing the Palestinian market.

“What happens is that Israelis say yes, you can bring goods and services to Palestine and the West Bank, then they say that for security reasons the goods cannot come in today, or they would say that you have to use Israeli trucks and drivers, so you have to unload it at the bridge,” Mansur said.

Due to the Israeli limitations, Mansur said, Jordan has not been able to increase its exports.

“It is in the hands of the Israelis to improve the situation,” he said, stressing that the Palestinian market is significant, but Israel does not allow Jordan to access it because “they benefit from it and treat it as a monopoly”.

“It is a captive market for the Israelis, so they can close it or open it; they use their goods and businesses to benefit from this market,” Mansur added.

Economic and Investment Specialist Wajdi Makhamreh told Jordan News that Jordan has a strategic relationship with Palestine at political, economic, and security levels, and His Majesty King Abdullah gives it a high priority since Palestine is a neighbor and a significant percentage of citizens and refugees in Jordan have Palestinian roots.

Jordan wishes to increase its exports to Palestine, he said, and “this will for sure impact and reflect on the Jordanian economy”.

“The current volume of trade is modest; it should be improved and a neighbor should have the highest priority,” he said, adding that Jordan should reach out to Israel “since we have relations with them, to improve and ease the procedures with Palestine”.

Makhamreh believes that commerce between the countries will increase after the King’s visit.

“I believe that increasing the volume of trade between the two countries will strengthen the Jordanian economy and its institutions,” he said, reiterating that Israel hinders the entry of Jordanian products, but also expressing hope that “now there is an intention to ease restrictions”.

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