Turkey removes tax privileges granted to Jordan as free trade deal breaks down

Published 23.11.2018 19:21
Updated 24.11.2018 00:01

Turkey has removed tax privileges granted to Jordan, while the latter also began imposing duties on imports from Turkey in a major hit for businesses that have been enjoying free access to Turkish markets.

The decisions came after Amman decided to suspend the free trade agreement between the two countries in March, saying it negatively affected local industries.

The presidential decree, which took effect Thursday, was published in the Official Gazette. Accordingly, Jordan has been removed from the Turkish list of countries for which no additional customs duty is imposed for the import of certain goods.

On the other hand, the decision on the implementation of a tariff quota on the import of some agricultural and processed agricultural products originating from Jordan was abolished and became operational as of Thursday by the decree.

Moreover, a Jordanian spokesperson confirmed Thursday that customs duties have begun to be imposed on goods coming from Turkey.

Yanal Barmawi, a spokesperson for Jordan's Industry, Trade and Supply Ministry, was quoted by The Jordan Times as saying that customs duties ranging from 20 to 30 percent are being imposed on Turkish imports.

"The termination of the deal has already gone into effect," he said.

Signed in late 2009, the free trade agreement came into force in 2011. The decision is part of Jordan's efforts to restudy all free trade agreements to see their benefit to the economy.

Media reports quoted Amman as saying that the 2011-deal lead to an increase in the imports of Turkish products and caused damage to Jordanian businesses, which were unable to compete with Turkish products.

On the other hand, some Jordanian officials said the abolition of the deal has caused damage to local companies.

"This is an unfortunate decision that will negatively affect scores of businesses," Nael al-Kabariti, the head of the Jordanian Chamber of Commerce was reported as saying by Jordan's media.

Speaking to The Jordan Times, Kabariti said: "Many traders opened shops and started investments to sell Turkish products and now that the deal is over, the prices of their products will increase and become less competitive, which will result in less revenues and profits."

The free trade agreement was the only reason why some traders opened their businesses, he noted, adding that some of them will keep registering losses in the coming period before they are forced to shut down.

He was cited by The Jordan Times as saying it is understood that Jordan did not benefit from the deal as desired; however, there were a number of other deals it also did not actually benefit as expected.

The trade volume between the two countries stood at $962 million in 2015, according to official figures. Exports from Turkey to Jordan stood at $835 million, while imports reached $127 million.

Mineral fuels, boilers, machinery, electric/electronic equipment and textile products topped the list of Turkey's exports to Jordan, while inorganic chemicals, fertilizers, textile products and plastics led the way in imports from Jordan.

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