Jordan-Iraq Trade Relations Not Living Up to Potential

Although Jordan could be Iraq's number one economic partner, this potential remains unfulfilled as the Kingdom's public and private sectors are not taking advantage of the "excellent ties" between the two countries, Iraqi Ambassador to Jordan, Saad Hayyani has said, according to a report in Jordan Times.

He said that Jordan's extensive experience in the Iraqi market since the 1980s could serve both countries' economic interests if Jordan made use of it.

"What is happening on the ground is the opposite. Unfortunately, Jordan does not take advantage of this feature," he said, noting that Iraq's imports in 2009 from Iran and Turkey stood at $4 billion and $6 billion, respectively, against just $1 billion from Jordan.

But it is not too late to rectify the situation, he said, thanks to deals the two sides have signed.

In contrast, a report from Aswat al-Iraq quotes Jordanian sources as saying that Iraq was the single biggest destination for Jordanian exports in the first five months of 2010. The value of exports from Jordan to Iraq in this period was 276.5 Jordanian dinars [$390], accounting for 16.2% of Jordan's exports.

The ambassador cited signs of improvement witnessed during the first half of this year were positive, attributing them in part to a Jordanian-Iraqi Free Trade Agreement (FTA) that entered into force at the beginning of the year.

"This agreement is important as it complements a multi-lateral FTA signed by Jordan, Syria, Turkey and Lebanon. We hope that these agreements will increase trade cooperation between the countries of the region in the future and serve the interests of all peoples of the region."

Hayyani noted that Iraq currently exports 10,000 barrels of oil per day to Jordan at a preferential price $18 below market prices.

Under a standing agreement, Iraq is expected to double and eventually treble this quantity, he said, but this has been put on hold by the delay in forming a government in Iraq.

After a government takes shape in Baghdad, "we hope to address all outstanding issues between all parties, including increasing the quantities of Iraqi oil exports to Jordan up to 30,000 barrels per day, according to agreements signed between the two sides".

The Iraqi envoy also noted that Iraq is ready to discuss the possibility of extending an oil pipeline through Jordanian territory, which would facilitate the transfer of Iraqi oil to Jordan and reduce costs.

Hayyani acknowledged that the tenuous security situation in Iraq makes it hard for the citizens of both countries to notice the continuous improvement in bilateral ties, but stressed that the two countries' "fraternal relations are exemplary and that Iraqis feel at home when visiting Jordan".

However, he noted that the Jordanian embassy in Baghdad's insistence upon using a private sector company to process visa applications for Iraqis makes it difficult for Iraqis to obtain entry into Jordan, discouraging them from visiting.

"This procedure causes many Iraqi citizens who wish to come to Jordan, whether for investment purposes or medical treatment, to consider other options and turn to other countries," the diplomat said, adding, however, that the Iraqi government understands the security concerns that motivated the Jordanian government to adopt the measure.

"We hope that once the security concerns are no longer an issue, things will return to normal and Iraqi citizens will be able to come to Jordan without the need to obtain a visa in advance, as was the case in the past."

(Sources: Jordan Times, Aswat al-Iraq)

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