The chairman of AmCham in Jordan says he’s actively engaged in boosting trade between Jordan and the United States, while seeking to diversify the Jordanian products that reach the world’s largest economy.
By Dina al Wakeel
Established in 1999, the American Chamber of Commerce in Jordan (AmCham-Jordan) aims to promote trade between the United States and Jordan. It represents both Jordanians who are interested in doing business with the United States, whether importing or exporting, and at the same time US investors who are looking at Jordan as a place to do business.
Mohammed S. Bataineh, the chairman of AmCham and one of its founding members, believes we have only scratched the surface of what could be achieved under the FTA between Jordan and the United States.
It has been almost a decade since the implementation of the FTA with the United States. What has been achieved over this period?
If you look at the numbers since the establishment of the FTA, the volume of trade with the United States has increased by 600-fold. It created some 70,000 jobs and lifted the trade volume from less than $500 million a year to $3.2 billion in 2016. However we think it is underutilized and we have established what is known as the FTA unit at the chamber to make sure that Jordanian businessmen are aware of how to use this FTA because it’s something new, and it includes certain procedures and specifications to follow. But once you do that we find that the Jordanian products can enter the US market in a brilliant way, it’s the largest market in the world and we have barely tapped the surface despite the numbers I have mentioned.
What are the main complaints that you get from businesspeople using the FTA to access the US market?
We don’t hear complaints about its fairness, but that it’s concentrated too much in one sector, which is textiles. As a chamber what we have done is taking the lead in what’s known as the TIJARA Coalition, which is a group of key Jordanian business associations and government agencies dedicated to promoting bilateral trade and the FTA. Its aim is to diversify our exports and imports from the United States.
What other sectors do you believe have the best potential to enter the US market?
All sectors across the board, but mainly the low hanging fruits in this deal are the food sectors, especially that Middle Eastern food today is becoming more and more popular in the West. We are using the Arab diaspora in the United States as a conduit to get these merchandise into not only Mediterranean stores but also to major hybrid markets. Dead Sea products is another possibility, as is the IT sector. Pharmaceuticals is another and of course jewelry. But as an architect I can tell you the architectural engineering sector is also lucrative, not only in services but also in manufacturing, such as air conditioning. Other sectors can come up as we deal with it but it’s a huge market and Jordan has a lot to offer. I also still insist that we are trying our best and I think we are succeeding in many ways to promote Jordan as a platform into and a steppingstone for joint ventures to rebuild the area. Regardless of what happens the area around us needs to be rebuilt due to the wars. This is estimated to cost trillions of dollars in both Iraq and Syria, and we a country that has direct borders with these two countries. Not only that but we have the right infrastructure, the right education, and the right capacity to actually form the right ventures. This is bigger than all of us together. It needs many partnerships to use Jordan as a platform to build the region using Jordanian know-how, connections, and both Iraqi and Syrian businessmen that are present in Jordan. So this is a huge opportunity for us and it can be a game changer.
Do you think that some of the agreement’s clauses should be reviewed and updated to the Kingdom’s benefit?
We are one of a few countries in the world that has two agreements with the United States, the FTA and the bilateral investment treaty. We do what is known as a door knock mission where we take private businessmen and we go to Washington D.C to meet with the Congress and Senate. We tried to ratify some of its [clauses] and we realized that because we happened to do it first, a lot of the clauses are no longer accepted. However, treaties in general need to be updated every now and then to suit the circumstances and I know that this is a continued effort. It is not something that is done once. We have to identify what is needed and what can be done.
When Donald Trump became President he said many of the free trade agreements that the United States signed with other countries would be reviewed and possibly scrapped. Do you see this happening with the FTA with Jordan? And do you think that politics will play a part in it remaining?
Not at all. Actually we are getting signs that it is the exact opposite. The reason is first of all the important political role that Jordan plays in the region. The second is because this agreement is actually a win-win situation. President Trump feels that some agreements are not in full favor of the United States, but the signs that we‘re getting that yes we are doing this but this will not include Jordan. This is also thanks to our leadership and His Majesty’s vision of promoting Jordan.
It’s political and it’s also because the agreement works for both countries. It’s in the interest of both countries not only to keep this agreement but also to expand it.
What about American investments in Jordan and how does the chamber encourage more US investors to venture into the Kingdom?
Foreign Direct Investment is major for Jordan. We had Muhannad Shehadeh, the Minister of State for Investment Affairs, talk to the private sector about attracting FDI and he said that this year it increased by 87 percent. Okay, it might be concentrated in one or two sectors and we would like to diversify as I said earlier, but it is going in the right direction. The United States has several major investments here, including Jordan Bromine Company, which also sits on the board of AmCham. And they also put a very large investment in the energy sector, while a lot of investments are also happening in the IT sector.
What are your future plans for AmCham?
We see AmCham as continuing to play a major role in advocacy, to make [Jordan] a friendlier place to do business. We continue to strive to improve Jordan’s position in the ease of doing business although again due to the situation around us we have slipped a little bit but we have plans to move forward and diversify our exports and imports from the United States. We have plans and continue to organize trade missions and exhibitions in the United States, to introduce Jordanian products into the US market while also attending events to help Jordanians get to know the investment opportunities in the United States.
Do you try to influence decision makers when it comes to improving the business climate in Jordan, including reducing taxes and other running costs?
We helped Philip Morris with some issues that they had with the government regarding customs. We also helped Coca Cola and Pepsi, who put a plan forward so when there’s an increase in prices it is done in agreement with the private sector and it does not harm their investment or in further increasing the size of their business. We represent the private sector’s case to the government through direct meetings, luncheons or events and we introduce the private sector to policy makers.
Do you think that due to political reasons, the bilateral agreements and the United States being one of Jordan’s main donors, that American companies are privileged in the Kingdom compared to other foreign investors?
They should be because of what you said. But to be honest there is a law that applies to everybody although there are certain conditions sometimes whereby yes there is favoritism. The whole free trade agreement is actually favoring Jordanian products in the States and favoring US products in Jordan. But outside of the agreement and the clauses, do I feel that US companies are favored? Only because of the reputation that the company and the country have.