Contributing Lawyers

Canada

Cyndee Todgham Cherniak

United States

Susan Kohn Ross

Australia

Andrew Hudson



Canada Announces Launch of Free Trade Agreement Negotiations with Jordan

On February 20, 2008, Canada's International Trade Minister announced the launch of free trade agreement negotiations between Canada and the Hashemite Kingdom of Jordan.  A free trade agreement between Canada and Jordan would be the first free trade agreement between Canada and a Middle Eastern country.  However, Canada and Jordan have strong economic and social ties.  Generally speaking, Canadians and Jordanians have great affection for one another - this is an important relationship to strengthen on many levels.

In terms of the economics of a free trade agreement between Canada and Jordan, the Canadian Goverment have offered the following statistics and information:

  • Total bilateral trade between Canada and Jordan in 2007 amounted to $76 million.
  • Canadian merchandise exports were $60 million, while imports from Jordan were $16 million - imports from Jordan increased from $3.9 million in 2001 to $16 million in 2007. 
  • Canadian merchandise exports to Jordan nearly doubled between 2000 and 2004, increasing to $42.2 million.
  • Canadian merchandise exports to Jordan then jumped to $122.5 million in 2005 (due mainly to the sale of jet aircraft) before settling back to $56.3 million in 2006 and 60.4 million in 2007.
  • Top exports to Jordan included forest products, agriculture and agri-foods products, and machinery and equipment. 
  • Imports from Jordan were comprised mainly of apparel and agricultural products.
  • The current level of both Canadian investment in Jordan and Jordanian investment in Canada is modest
  • The Jordanian economy is expanding (has averaged more than 6% growth per year over the past 5 years)
  • Jordan is committed to its privatisation program
  • Jordan offers opportunities for Canadian investors in a variety of sectors including manufacturing, mining, telecommunications, and transportation, among others

International Trade Canada has indicated that the first full round of negotiations between Canada and Jordan is planned for April 2008 in Amman, Jordan. it is anticipated that the negotiations will cover a wide range of issues, including trade in goods, rules of origin, customs procedures, trade facilitation, monopolies and state enterprises, investment, environment, labour, dispute settlement and institutional provisions.

Jordan has entered into 4 free trade agreements before  launching negotiations with Canada.

  • EFTA - Jordan Free Trade Agreement (Entered into Force January 1, 2001);
  • United States - Jordan Free Trade Agreement (Entered into Force December 17, 2001);
  • EC-Jordan Free Trade Agreement (Entered into Force May 1, 2002); and
  • Agadir Declaration between Jordan, Tunisia, Egypt and Morrocco (provides for the creation of a free trade zone between the four South Mediterranean countries)

The EC - Jordan FTA is a component of the Euro-Mediterranean Partnership Free trade Area (EMFTA). In the Barcelona Declaration (1995), the Euro-Mediterranean Partners agreed on the establishment of a EMFTA by the target date of 2010. The EMFTA is to be achieved by means of the Euro-Mediterranean Association Agreements negotiated and concluded between the European Union, the EFTA countries, and the Mediterranean Partners (Tunisia, Morocco, Egypt, Algeria, Turkey, Israel, the Palestinian territory, Jordan, Lebanon and Syria) together with free trade agreements between the partners themselves. Turkey signed in 1995 an Association Agreement establishing the definite phase of a customs union with the EU. Negotiations for Agreements already concluded include those with Tunisia (1995), Israel (1995), Morocco (1996) , Jordan (1997), Egypt (2001), Algeria (2002), Lebanon (2002) and Syria (2004). Those with Tunisia (1998), Morocco (2000), Israel (2000), Jordan (2002) and Egypt (2004) have been ratified and are in force. . These agreements, cover a large variety of CFSP, economic, social, cultural and financial co-operation themes as well as free trade. Interim Euro-Mediterranean Association Agreements signed with Israel (1995) and the PLO (1997) and Lebanon (2003) concerning trade related matters are in force.

As previously discussed, Jordan entered into free trade agreements or agreements to establish free trade zones with some of the other Euro-Mediterranean partners.

It is largely understood that the United States entered into its free trade agreement with Jordan in order to maintain friendly relations with a Middle Eastern country.  The United States - Jordan Free Trade Agreement is one of the shortest of the U.S. FTAs.  However, it is an important FTA because it one of the first FTAs anywhere in the world to incorporate in the body of the FTA provisions relating to protections for the environment and labour.

It should be possible for Canada to use the United States - Jordan FTA Articles 5 (Environment) and 6 (Labor) as precedents for the Canada - Jordan FTA.

Canada and Jordan concluded negotiations of a Foreign Investment Promotion and Protection Agreement on June 18, 2007.  Both sides are in the process of carrying out their respective procedures leading to formal signature and ratification of the agreement.  Canada also signed an Air Services Agreement with Jordan.  In addition, Canada signed the Canada- Jordan Income Tax convention on September 6, 1999.

Cyndee Todgham Cherniak, the author of this blog article, has reviewed over 75 free trade agreements for the Asian Development Bank and written a lengthy report on free trade agreements.  She teaches a course at Case Western Reserve University School of Law on NAFTA and bilateral trading arrangements.

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