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The EU and Jordan have a strong partnership across many sectors and have been linked by an Association Agreement since 2002. The EU is the biggest foreign investor in Jordan, accounting for 55% of the foreign direct investment (FDI) stock in the country.
- Jordan is the EU’s 63rd biggest trade partner, representing 0.1% of the EU’s total trade in goods with the world in 2020.
- The EU is Jordan’s biggest trade partner, accounting for 14.7% of its trade in 2020. 20.6% of Jordan’s imports came from the EU, but only 2.1% of Jordan’s exports went to the EU.
- Total trade in goods between the EU and Jordan amounted to €3.4 billion in 2020. The EU’s imports from Jordan amounted to €0.4 billion and were dominated by chemicals (€0.12 billion, 30.0%), fuel and mining products (€0.07 billion, 17.5%) as well as machinery and transport equipment (€0.05 billion, 12.5%). The EU’s exports from Jordan accounted for €3.0 billion and were led by machinery and transport equipment (€0.90 billion, 27%), agriculture and raw materials (€0.77 billion, 25.7%) and chemicals (€0.60 billion, 20%).
- Two-way trade in services amounted to €1.73 billion euros in 2019. EU imports of services represented €0.87 billion and exports amounted to €0.86 billion.
The EU and Jordan
The EU and Jordan established a Free Trade Area as part of the EU-Jordan Association Agreement, signed in 1997, which entered into force in May 2002. The EU and Jordan also signed an agreement in the form of an Exchange of Letters providing for greater liberalisation of their trade in agricultural and processed agricultural products, which entered into force in 2006. Trade in industrial products is entirely liberalised, while market opening for agricultural products is substantial. The EU and Jordan also agreed upon a protocol establishing a bilateral Dispute Settlement Mechanism, which entered into force in 2011.
The Council of the European Union adopted negotiating directives for a Deep and Comprehensive Free Trade Area (DCFTA) with Jordan in 2011. As part of the preparatory process for a DCFTA, an independent contractor carried out a Sustainability Impact Assessment (SIA) in 2014. However, the DCFTA negotiations have not yet started.
In July 2016, the EU and Jordan agreed to simplify the rules of origin that Jordanian exporters use in their trade with the EU. This measure allows producers in Jordan to use an alternative set of rules of origin for exports to the EU, provided that a number of conditions are met. It seeks to increase legal employment of Syrian refugees. The initiative was amended in December 2018 to accelerate its uptake and extend its duration. The simplification allows producers in Jordan to use a very advantageous set of rules of origin (equivalent to the ones granted to least-developed countries under the EU’s Everything But Arms initiative), on the condition that their workforces include a set proportion of Syrian refugees. The scheme applies to 52 different product categories including textiles and garments, engineering and electrical products, chemical products, plastic products, and furniture and wood products. This initiative is valid until 21 December 2030; it has already opened up new opportunities for trade with the EU, and its use by Jordanian exporters has increased year-on-year.
In 2021, under the new EU Trade Policy Review, the EU has announced a new sustainable investment initiative to interested partners in the Southern Neighbourhood and Africa.
The EU is already a major trade and investment partner for Jordan, and enhancing private investment can be mutually beneficial as it can contribute to the creation of jobs and growth for Jordan and open further investment opportunities for the EU.
Jordan in the Southern Neighbourhood
Jordan is one of the partners of the EU’s Southern Neighbourhood (Algeria, Egypt, Israel, Jordan, Lebanon, Libya, Morocco, Palestine*, Syria and Tunisia).
The EU established its privileged partnership with the Eastern and Southern shores of the Mediterranean back in 1995 with the launch of the Euro-Mediterranean Partnership at the Barcelona Conference, aiming to establish an area of peace, stability and economic prosperity that upholds democratic values and human rights.
The 25th anniversary of the Barcelona Process in November 2020 was an opportunity to reflect on the strategic partnership with the region in light of the political, socio-economic, financial and environmental challenges exacerbated by the Covid-19 pandemic, and to reassess the EU’s partnership with Jordan and the other Southern Neighbourhood partner countries. Following consultations with partners, this reflection resulted in a Joint Communication by the European Commission and the High Representative of the Union for Foreign Affairs and Security Policy on ‘A renewed partnership with the Southern Neighbourhood – A new Agenda for the Mediterranean’ and the annexed ‘Economic and Investment Plan for the Southern Neighbours’ in February 2021.
In 2004, Jordan signed the Agadir Agreement with Morocco, Egypt and Tunisia. The agreement committed signatory parties to removing all tariffs on trade between them and to harmonise their legislation on standards and customs procedures. The Agadir Agreement entered into force in July 2006, and an Agadir Technical Unit in Amman ensures its implementation. Lebanon and Palestine joined the Agreement in 2020.
The impact of trade component of the EU’s Euro-Mediterranean Association Agreement with Jordan was assessed in the Ex-Post Evaluation of Trade Chapters of the Six Euro-Mediterranean Association Agreements with the EU’s Southern Neighbours (Algeria, Egypt, Jordan, Lebanon, Morocco and Tunisia), which was published by the European Commission in 2021.
- The European Neighbourhood Policy provides political and financial assistance to Jordan. The EU committed €765 million in bilateral assistance to Jordan for the period 2014-2020, under the European Neighbourhood Instrument (ENI). The funding supported cooperation priorities agreed with Jordan, namely: (i) enhancing social and economic development; (ii) strengthening the rule of law and; (iii) upgrading border management and preventing violent extremism.
- Under the EU’s Multiannual Financial Framework for the period 2021-2027, the EU will adopt a broad new financial cooperation instrument: the Neighbourhood, Development and International Cooperation Instrument (NDICI). The NDICI will be the basis of future EU-Jordan cooperation.
- More information on EU support is available from the Directorate-General for Neighbourhood and Enlargement Negotiations.
The pan-Euro-Mediterranean cumulation and the PEM Convention on rules of origin
The pan-Euro-Mediterranean cumulation system of origin was created in 2005. It brings together the EU, Jordan, and other partners in Europe and the Mediterranean to support regional integration by creating a common system of rules of origin. Rules of origin are technical criteria which determine whether a specific product qualifies for duty-free or other preferential access under a given trade agreement.
Cumulation of origin means a product coming from one partner country can be processed or added to a product of a second partner country and still be considered an ‘originating product’ of that second partner country for the purposes of a particular trade agreement.
The pan-Euro-Mediterranean system allows for diagonal cumulation (i.e. cumulation between two or more countries) between the EU, EFTA countries, Turkey, the Western Balkans, the Faroe Islands, Ukraine, Moldova, Georgia and any country that signed the Barcelona Declaration of 1995. The system was originally based on a network of Free Trade Agreements with identical origin protocols.
These individual origin protocols are being progressively replaced by a reference to the Regional Convention on pan-Euro-Mediterranean preferential rules of origin (PEM Convention), which was established in 2011 to provide a more unified framework for origin protocols. Jordan signed the Regional Convention in 2013 and the internal ratification process was completed on 16 August 2013.
Committees and Dialogues
The EU and Jordan meet regularly to discuss issues and best practices and oversee the proper functioning of the Agreement.
Trading with Jordan
- Importing into the EU from Jordan
- EU trade defence measures on imports from Jordan
- Exporting from the EU to Jordan
- Trade relations are part of the EU's overall political and economic relations with Jordan
- Jordan is a member of the World Trade Organization
* This designation shall not be construed as recognition of a State of Palestine and is without prejudice to the individual positions of the Member States on this issue.