Under the leadership of King Abdullah, Jordan has demonstrated its commitment to economic reform, especially in the areas of privatization and in improving the investment climate. In April 2000, Jordan acceded to the World Trade Organization (WTO), a process which entailed extensive legislative and regulatory reform. The government has partially privatized the national telecommunications company and the state-owned cement firm, and is in the process of privatizing the national airline. In addition, Jordan and the U.S. signed a Free Trade Agreement (FTA) in October 2000 which will eliminate virtually all trade barriers between the two countries over a period of several years and create new opportunities for commercial business ventures for U.S. firms seeking to enter the Jordanian market and/or the Middle East Region.

Reforms to the customs, taxation, and investment laws have improved Jordan's business climate. Investors have shown interest in Qualifying Industrial Zones (QIZs), which are industrial parks that can export products to the U.S. duty free if 35% of the product's content comes from the QIZ, Israel, and/or the West Bank/Gaza. QIZ factories have created more than 15,000 jobs, and the number is expected to continue increasing rapidly. The government is also developing the port of Aqaba as a Special Economic Zone (SEZ), with low taxes, minimal bureaucracy, and investor-friendly policies.

In 1999-2000, Jordan's intellectual property (IP) laws were upgraded to meet international standards and are now regarded as TRIPS-consistent. As a result, Jordan was removed from the United States Trade Representative's Special 301 "Watchlist" of countries having inadequate intellectual property protection. However, effective enforcement mechanisms and legal procedures have not yet been fully established. As a result, U.S. companies continue to lose sales to unauthorized reproductions of copyrighted and patented products.

The U.S. Government has encouraged Jordan to continue moving forward on its economic reform program, as illustrated by the following:

-- Jordan and the U.S. signed a Free Trade Agreement (FTA);

-- In 1999, the two countries signed a Trade and Investment Framework Agreement (TIFA), which seeks to remove impediments to trade and investment;

-- The U.S. and Jordan have ratified a Bilateral Investment Treaty (BIT), which protects investors and establishes procedures for resolving investment disputes;

-- The Zarqa Free Zone is Jordan's major free zone area. Other areas include the Sahab Industrial Estate Free Zone, Queen Alia International Airport Free Zone, and the Gateway Qualifying Industrial Zone.

-- The government converted the Aqaba port and surrounding area into a Special Economic Zone (ASEZ) in May 2001, with streamlined bureaucracy, lower taxes and facilitated customs handling. In the SEZ, the private sector has been given a free hand to develop transportation and communication services, tourism, and high value-added activities.

-- Annual cash transfers from the U.S. Agency for International Development (USAID) are conditioned on the implementation of specific policy reforms aimed at speeding privatization, developing capital markets and improving the investment climate. In addition, USAID supports a comprehensive set of economic reform and private enterprise development activities aimed at implementing policy reforms and improving the overall business climate for trade and investment.

Jordan is becoming an increasingly attractive market for global trade and investment. In addition to its accession to the WTO, privatizations and extensive trade and investment reforms, Jordan is looking at becoming a strong platform for regional and international trade. Congressional approval of the U.S. - Jordan FTA, development of the ASEZA and continued growth in the QIZ's should both strengthen Jordan's economy and create a more attractive market for international trade and investment.

Statistical Information

• Population: 5.7 million people
• GDP $15.8 billion, GDP per capita is around $2,770
• 50% pf population under 20
• Well educated labor force (1.41 million) with literacy over 90%
• Economic grew by 6% in 2007 and is expected to grow around 5.5% in 08
• Jordan economy is 70% composes of the service sector and 17% of manufacturing
• Relative large middle class, but still needs to reduce unemployment which stands at 13%
• Jordan is the fourth largest recipient of US aid