‘Economic opportunity in time of adversity’

In a meeting in London on the Syrian refugee crisis a few weeks ago, His Majesty King Abdullah proposed to turn this crisis into a “development opportunity” creating jobs for both Jordanians and refugees.

He called on the international community to invest in “hope creation, in an area where hope has been in limited supply”.

At the forefront of one of the most tragic humanitarian crisis of our time, Jordan is a source of hope in a region faced with great challenges.

According to UNHCR, refugees represent over 16 per cent of the population of the country. Of course, the situation has a significant economic impact, and World Trade Organisation (WTO) members have recognised this reality.

They used their review of Jordan’s trade policy last November to applaud the resilience of the Kingdom’s economy and to commend the resolve of the country leaders in staying the course of trade and economic reforms despite the adversity.

The Jordanian economy grew by nearly 3.5 per cent annually from 2008 to 2014 and is expected to grow by 2.8 per cent in 2016 (in real terms) after a 1.7 per cent increase in 2015.

Imports and exports of both goods and services have increased during the last decade. Overall, the trade deficit in goods is largely reduced thanks to the surplus in trade and services and the remittances from Jordanians working abroad.

During the same period and in 2014 alone, the Kingdom passed important reforms on investment, income tax and public-private partnership.

It has also consolidated earlier reforms in its customs law and competition law, both dating back to 2011.

All these reforms play a role in increasing the competitiveness and transparency of the economy — and this, in turn, supports trade, which is an important engine for growth in an economy as dynamic and as open to the world as Jordan’s.

The WTO can play an important role here. For example, given the location and the profile of the Jordanian economy, reducing the time and cost of moving goods across the border can make a big difference, and the WTO’s new Trade Facilitation Agreement (TFA) is designed to help with exactly this problem.

A report issued by the WTO last year found that if fully implemented, the TFA could reduce trade costs of members by an average of 14.5 per cent.

For developing economies alone, it could boost their exports by almost $730 billion per year.

By making trade flow more easily, this agreement can also support Jordan’s economic diversification.

The TFA could help developing countries increase the number of new products exported by as much as 20 per cent, and it could help them enter 30 per cent more foreign markets.

However, in order to benefit from the agreement, first it must be ratified.

This is one immediate and very positive step that Jordan could take.

Of course, the Kingdom has been actively working to increase and consolidate its network of regional trade agreements with its main economic and trade partners in recent years, but Jordan remains an active player in the Multilateral Trading System — and we delivered meaningful and historic results at the most recent WTO ministerial conference, which was held in Nairobi, Kenya, last December.

It was our second successful ministerial conference in a row, following the Bali ministerial conference in 2013. Both conferences achieved positive results for our members and for developing countries, and least developed countries (LDCs) in particular.

The TFA, the elimination of export subsidies in agriculture and decisions which will extend new opportunities to entrepreneurs in LDCs are vitally important reforms to the global trade system.

As we look ahead to 2016, and beyond, we need to be working towards more trade agreements that will support growth and development in Jordan and beyond.

WTO members want to deliver more results, more quickly. For example, it is clear that everyone wants to tackle the big, outstanding trade issues, such as agriculture (where market access and domestic subsidies would be obvious priorities), market access for industrial goods, services and fisheries subsidies.

There is a strong desire to maintain development at the centre of our efforts. 

A debate is currently under way about the precise shape that this future work should take and whether other, additional, issues might be brought to the table.

I urge Jordan to make its voice heard in that debate.

By building on elements of consensus and learning from our recent successes, I am confident that we can deliver further, much-needed reforms to global trade rules.

Trade, and the global trading system embodied in the WTO, can help Jordan realise its development ambitions.

As we look ahead, we want to be partners in that journey — and help Jordan remain a source of hope and economic leadership in its troubled region.

The writer is director general of World Trade Organisation. He contributed this article to The Jordan Times.