(Communicated by the
Export Israel & International Cooperation Institute)
Twenty years ago, a
peace agreement was signed between Israel and Jordan, which defined the relations, boundaries and division of resources between Israel and Jordan. Following the peace treaty, the borders between the countries were opened, and factories under Israeli ownership were transferred to Jordan, where labor was cheaper.
In 1996, the
QIZ (Qualifying Industrial Zone) Agreement was signed by Israel, Jordan and the US, in order to encourage business collaborations and thus promote the peace process. The QIZ Agreement, which established industrial parks as part of the cooperation between Israel and Jordan and with the active support of the American government and Congress, enabled Jordanian products with Israeli added value to be imported into the American market duty free. Another important benefit of QIZ was the employment provided by its factories to nearly 30 thousand people, most of them Jordanians. The agreement contributed to the strengthening of the political and trade relations between Israel and Jordan. While in 1998, Israeli exports to Jordan amounted to about USD 25 million, this figure increased by more than 400% by 2004, when exports reached USD 133 million.
In 2005, free trade agreements were signed between Jordan and the United States. The Jordanian exporters moved from the QIZ framework to the framework of this agreement, while the Israeli exporters were required to face the Jordanian market on equal terms with local and foreign suppliers, without the advantage of the QIZ Agreement. As a result, exports from Israel to Jordan decreased by about 13% from USD 133 million in 2004 to about USD 116 million in 2005.
Based on the data of the Export Institute, the scope of trade (imports and exports) of Israel with Jordan in 2013 amounted to about USD 366 million, an increase of about 2% compared to the same period the previous year. That year, Jordan was ranked as Israel’s 39th trade partner.
The export of goods from Israel to Jordan
in 2013 amounted to about USD 99 million, a decrease of about 36% compared to the same period the previous year. The main decrease occurred in jewelry industry exports.
In 2013, Jordan was ranked as the 51st destination for the export of Israeli goods. In the first half of 2014, there was an increase of about 16% in the scope of exports, amounting to about USD 56 million.
Changes in exports in prominent industries during the first half of 2014:
- In the vehicle industry, aircraft and boating vessels experienced an increase of about 29%, and amounts to about USD 15 million, constituting about 27% of the exports.
- In the agricultural industry, a decrease of about 53% to about USD 6.5 million, constituting about 12% of the exports.
- In the machines and equipment industry, a decrease of about 4% to about USD 4.5 million, constituting about 8% of the exports;
- In the chemicals and refined petroleum industry, an increase of about 13% to about USD 4 million, constituting about 7% of the exports.
|
Main Exports from Israel to
Jordan ($M)
|
|
|
Description of Industry ($M)
|
H1/2013
|
H1/2014
|
Percent change
|
Percentage of total exports to Jordan 2014
|
|
|
|
|
Transport tools
|
11.6
|
15.0
|
+29%
|
27%
|
|
|
Agricultural export
|
13.9
|
6.5
|
-53%
|
12%
|
|
|
Machines and equipment
|
4.7
|
4.5
|
-4%
|
8%
|
|
|
Chemicals and refined petroleum
|
3.5
|
3.9
|
+13%
|
7%
|
|
|
Non-imbedded source industry
|
0.6
|
3.7
|
+526%
|
6%
|
|
|
Food, drink and tobacco products
|
1.9
|
3.3
|
+76%
|
6%
|
|
|
Basic metal and metal products
|
2.4
|
3.0
|
+25%
|
5%
|
|
Source: Israel Export Institute
Exports from Israel to Jordan 1988-2013, in millions US$
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