AMMAN — As the price of
commodities continues to rise in light of rising
oil prices and shipping costs,
representatives of commercial and industrial sectors are calling on the government
to take immediate action and sign a new free trade agreement (FTA) with Turkey.
اضافة اعلان
The FTA was signed with
Turkey in 2009. The agreement went into effect in 2011, before being suspended
by Jordan in 2018, according to Al-Ghad news. It axed tariffs and allowed for
bilateral trade and investments. However, during that time, Jordan’s trade
deficit with turkey ballooned to over JD400 million. Now, some are calling for
its reinstatement.
Khalil Haj Tawfik, head
of
Amman Chamber of Commerce, said he supported a decision to reinstate the
FTA. He told Jordan News that "The majority of Jordanians prefer
Turkish goods. They travel to Turkey just to buy their clothes.”
“Since the agreement
was canceled during former Prime Minister Hani Al-Mulki's government, merchants
have truly suffered from the decision. We know that there are no logical
reasons for canceling this agreement."
"Turkey wants to
work with (Jordan), they love Jordan and are ready to cooperate at any time we
want to. I still see no logical reasons for canceling such an agreement especially
because Jordan had never canceled any other agreement except for this one,” Haj
Tawfik said.
"As we can see, the
pandemic has resulted in making shipping more difficult, we need to have
alternative solutions and a nearer country and I guess that these criteria describe
Turkey,” added Haj Tawfik.
"We should know that people are affected from
such decisions just as the merchants are; people might not be able to buy their
needs due to their high costs," he said.
But not everyone Jordan
News spoke with agreed that the FTA was good for Jordan.
In a phone interview
with Jordan News, member of Amman Chamber of Industry, Saad Yassin, emphasized
how the FTA severely undermined the strength of the country’s industry sector.
“The strength of
industry in Jordan is a reflection of the strength of the economy as a whole,”
he said. “We cannot have cheaper products coming from Turkey exempt from custom
taxes and driving our local producers out of business.”
In response to concerns
merchants expressed regarding rising prices, Saad explained how industry and
commerce in Jordan are highly interconnected.
“Any impediments that
take place in the industry sector will eventually negatively impact business
for merchants. They must understand that their success is directly dependent on
ours, and for us, success and the free trade agreement with Turkey do not
belong in the same sentence,” he said.
“A decision made from the government regarding the FTA
should be based on the best interests of the economy. From our perspective, the
status quo should be maintained.”
Anwar Al-Kalouti, owner
of Arab Weavers, a leading manufacturer of carpet and yarn in the Middle East,
described the FTA agreement with Turkey as one that does not make “economic
sense”.
“Turkey is a large
country; their economy is massive in comparison to Jordan’s, which gives them
more leverage to lower prices.
Also, the Turkish government gives a 15 percent
subsidy to their exports, which makes it impossible for us to compete with
their prices. A free trade agreement where only one side benefits is not
feasible economically,” he said.
Anwar then expressed
the struggles his company faced during the time of the agreement. “We struggled
greatly with sales, and we were forced to let a lot of our employees go,” he
said.
Nonetheless, a number
of merchants told
Jordan News that they were hopeful a new FTA would
improve their economic conditions.
Fares Al-Fares, a food
merchant, told
Jordan News that "as a merchant, I truly need such a
good agreement as the one we had with Turkey."
"I used to get my
goods from Turkey at a lesser cost and that means that I can sell them to
people at good prices,” Fares said. “Nowadays, I suffer from high shipping
costs therefore I have to raise my prices."
"Signing such an
agreement shall benefit both the merchants and the buyers," he said. "I
totally stand with this agreement and I still do not understand why some people
would stand against it."
Ahmad Abu Laila, a
clothing merchant, told
Jordan News that "my biggest obstacle is
the high shipping costs and that the government does not support us as
merchants through easing customs."
"Merchants’
conditions are really hard, and the pandemic makes things even harder — we need
emergency support from our government,” he added. “Easing customs shall make a
huge positive impact no doubt."
President of the Jordan
Chamber of Commerce, Nael Kabariti, affirmed some of these merchants’ concerns.
He told
Jordan News that "shipping fees from China for a
40-foot container amounted to $12,000, (increased from) $1,200, and freight
rates from European countries increased from $1,500 to $5000."
"The prices of raw
materials also increased globally," Kabariti said. "The existence of
customs duties … means that the increase in freight charges increases customs
duties, and this also means an increase in the value of goods."
Kabariti stressed the
need to take quick measures related to reducing customs duties and postponing
the fulfilment of the sales tax that is paid in advance on goods, in addition
to finding alternatives for shipping by going through airlines for some goods
that are imported at a lower cost.
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