A senior US trade official says American companies can play a crucial role in the Kingdom’s economic development.
By Dina al Wakeel
Last month, The US State Department’s Special Representative for Commercial and Business Affairs, Ziad Haider, headed a major business delegation to Jordan. He was accompanied by a group of American companies from a variety of sectors, including food and beverage, energy, construction, finance, and technology.
As well as seeking to leverage the continuing FTA between Jordan and the United States, Haider said these companies were also amongst the first attempting to capitalize on the new EU Jordan Compact deal, which eases the rules of origins on Jordanian exports to Europe.
What are the main outcomes that we should expect from your trip to Jordan?
An important outcome for me as a diplomat is to show Jordan that this is a relationship that we care deeply about and that it’s not just something that’s government to government, but that the business community is behind it as well. Secondly, on an economic front, it should not be just for the companies to learn about opportunities. But if they see that there are ways in which they can act on it, then to ideally make investments, open offices, form partnerships, close deals. I would say that a number of companies on this delegation are on different parts of that spectrum, some are already here, and they’re looking to expand their presence—in particular leverage the regional hub nature of Jordan. Some are on the verge of opening up an office, and then some are looking into coming into this market.
We are also coming to Jordan at a time when it’s in the midst of this major refugee crisis, and turning that crisis into an opportunity that’s what Jordan Compact represents. So we specifically want to show our support and hope to make that a reality, in particular the EU relaxation on the rules of origin. What makes this delegation special? As I understand it this is one of the first delegations to focus on the EU rules of origin deal and that’s been a big theme in our conversations with the prime minister and the minister of trade; how can we help you make the best of this opportunity.
So another major outcome that we would like to see is having our companies play a role, not just supporting refugees from the point of view that this is good CSR, but because it makes commercial sense. The government of Jordan has very wisely said that this is an opportunity where you can integrate people with training into the economy.
Do you think there is real interest from these companies to invest in Jordan or operate offices in the Kingdom to serve other markets in the region?
It’s frankly both. PepsiCo for instance is based in Jordan. They have a bottling plant and two distributors. But if for example Iraq and Syria open up and a signal comes that they’ll be interested in having exports come from Jordan then they are interested. That complements the government’s trade strategy, which is even as we have this trade relationship with the United States, how do we get our traditional trade partners of Iraq and the West Bank on line? Our companies can play a part in enabling that regional activity.
How can Jordan capitalize on its agreement with the EU?
If you think about it there are two interesting and important aspects of the Jordan Compact. One is that there are certain requirements for the hiring of refugees and there are two tracks there; one is that they hire 15 percent of refugees or the other is that you hit the 200,000 number. The government is working hard to do that and of course one issue is that the right skills are there in place. So they have this skills-based programs and the point that we discussed today was how can our companies help support these training programs, such that you can meet that part of the requirements. The other part is a more traditional one, which is how do you connect Jordanian companies with European companies, and the trade minister shared that there will be a delegation going to Brussels. Many of our US companies have a presence in Jordan and in Europe as well, the goal for us is to connect the dots between the operations here and there and to at least show them that there’s an opportunity to do that out of Jordan vs. other countries. But that depends on the ease of doing business in Jordan, tax structures, and other factors. But I feel confident that we can get there because I see this government is taking a lot of important reforms, such as the fact that we’ll probably get an insolvency law which is a very important step for companies—the ability to fail. [They will also] allow small companies to use mobile assets as a form of collateral, which is critical to unleash small businesses. So despite the sea of instability, the leadership in Jordan is pressing ahead.
US President-elect Donald Trump has vowed to review all of the free trade agreements his country signed with developing countries. How worried should Jordanian companies be?
I can’t comment on the next administration’s policies. All I can say that these things need to be judged by history also. If you look at the history of this relationship and the success of the FTA deal—in the face of a very critical challenge which is [ISIS]—it’s hard for me to imagine anyone, be it the President-elect or any other candidate, walking away from this.