Trade Bridge as a Bridge for Peace

In spite of last minute program changes and the non-participation of Minister Shimon Peres and Minister Eli Yishay, who had to attend an urgent government meeting, the fifth Israeli-Jordanian Annual Business Meeting proceeded successfully.

Four days before the 50th anniversary of the Treaty of Rome, one could not help relating to the Coal and Steel Union that had led to the development of the Common Market and of the European Union. Could the European model be used in the Middle East, asked Dr. Hänsel, Representative of the Konrad-Adenauer-Stiftung to Israel. The existing trade agreements between Jordan, Israel and the USA or the European Union such as the Qualified Industrial Zones (QIZ) agreement and the “Pan EuroMED Cumulation” have already brought important achievements as well as the consolidation of bilateral agreements. Eastern Mediterranean countries and most particularly Jordan and Israel share a common goal and the promotion of trade and economic ties can help attain peace and stability in this region.

For the representatives of the European Commission in Israel and in Jordan, the expansion of peace and stability to the Middle East and the Mediterranean Basin is indeed of strategic interest for the EU. Through its European Neighborhood Policy, the EU wants to give the neighborhood countries the opportunity to take part in different policy cooperation in key sectors such as energy or transport, it wants to encourage the neighbors such as Jordan and Israel to improve their relations and while including all parties - such as the Palestinian Authority - in the process. And one of the keys to this achievement is the promotion of trade and economic ties.

Relating to the success of the QIZ trade agreement, the Representative of the European Commission in Israel, Ambassador Cibrian-Uzal, considers the PanEuroMed projects in the region as more ambitious on the long-term basis. To enhance the trade agreements between Jordan and Israel, the European Investment Bank is ready to finance many projects such as building a railroad linking the city of Irbid in northern Jordan to the Israeli port of Haifa. This railroad of 70 km would increase and improve bilateral trade as well as export to the USA and Europe by reducing the hurdles that currently hamper a smooth transfer of goods between Jordan and Israel.

For Dr. Okleh, Director General of the Jordanian Ministry of Industry and Trade, the significance of the QIZ and the PanEuroMed Cumulation agreements, from which Jordan and Israel benefit, must not be demonstrated. Moreover, trade and business relations between both countries are important components of the peace agreement but other dimensions must be taken into consideration. Based on bilateral relations alone, the peace process is limited and restricted. It is important to address the problem of the Palestinians and work for a real integration of the economies of the region.

The American economic counselors confirmed that QIZ related trade to the USA constantly increases and described the business relations between Israel and Jordan as a good and complimentary cooperation, which, however, has not yet achieved its full potential. There still exists much room for upgrading and expansion. Sectors such as medical tourism at the Dead Sea, pharmaceutical products, high tech agriculture and tourism look very promising and both countries should benefit from improving their cooperation. Moreover, there is an urgent need for reform of the labor sector in Jordan and for output improvement in order to compete with the Asian economies, especially China and India.

Mr. Melzer, Director of the Israel–Jordan Chamber of Commerce as well Mr. Hirsch, Deputy-Director of the Israeli Ministry of Industry, Trade and Labor surveyed the impressive development of the last 10 years. The 1997 treaty has proven its worth to both Israel and Jordan, boosting Israeli exports to Jordan as well as Jordanian exports to the US. During the period January - November 2006 Israeli export to Jordan was up 10% compared to the same period last year. The total value of goods exported was US$110 million. Most of the exports are raw materials shipped to the QIZ production facilities in Jordan. But both also expressed the need to look beyond the current QIZ agreements that deal, for example, with mass-produced textiles and instead to concentrate on manufactured products and industrial innovation. The 2006 PanEuroMed Cumulation agreement with the EU will also bring this kind of diversity that should benefit the economy of both countries.

Ways to solve the technical problems faced by the Jordanian businessmen at the border crossing to Israel and at the port of Haifa were discussed and Mr. Melzer as well as Mr. Gabi Bar reiterated that all efforts must be made to improve and facilitate the trade cooperation with Jordan and encourage even more the dialogue between Jordanian and Israeli businessmen. The Sheikh Hussein Bridge over the Jordan River is not only a trade bridge but also a bridge for peace.