The Jordan–U.S. Agreement: An Opportunity for Exports or a Test of Competitiveness?

The reciprocal trade agreement signed between Jordan and the United States in Washington does not represent a new beginning for trade relations between the two countries as much as it reinforces the gains achieved since the Jordan–U.S.
Free Trade Agreement entered into force on December 17, 2001. It also realigns the relationship with the changes in U.S. trade policy that have emerged over the past year.

After the United States imposed additional tariffs on most countries around the world, Jordan, following negotiations that began in April of last year, succeeded in securing the lowest tariff tier of 10%. This advantage was granted to only a limited number of countries, estimated at between eight and nine.

It is important to distinguish between the original exemptions provided under the Free Trade Agreement and the new additional tariffs. Jordanian products that comply with the rules of origin remain exempt from the original customs duties, while the 10% tariff applies only to the additional measures recently imposed by Washington on its trading partners.

This preferential treatment is significant for Jordan’s economy, as the U.S. market is one of the country’s most important export destinations.

During the first four months of this year, Jordan’s exports to the United States reached JD 595 million, concentrated in garments and textiles, jewelry, machinery, electrical equipment, and pharmaceutical products.

The agreement is particularly important for the garments and textiles sector, which alone accounts for nearly 70% of Jordan’s exports to the U.S. market.

The sector will enjoy more favorable market access, strengthening its ability to attract new investments and create direct employment opportunities.

However, the agreement does not guarantee automatic gains for Jordan. Success will depend on the country’s ability to diversify exports beyond the apparel sector, increase value-added production, and transform its tariff advantage into productive investments targeting the U.S. market.

Likewise, while removing technical barriers, improving customs procedures, protecting intellectual property and labor rights, and enforcing environmental regulations can reduce trade costs, they also raise compliance requirements for Jordanian businesses.

The agreement extends beyond trade in goods to include services, investment, and digital trade.

Jordan has committed not to impose taxes or customs duties on digital services and supports maintaining the World Trade Organization’s moratorium on customs duties for electronic transmissions.

The agreement also covers cooperation on supply chain resilience, investment security, export controls, and combating customs fraud areas that could provide broader economic opportunities if translated into tangible partnerships and investments.

On the other hand, Jordan will continue exempting U.S. products from customs duties under the 2001 Free Trade Agreement, including motor vehicles.

Therefore, the new agreement does not introduce any additional tariff exemptions for American vehicles; instead, it focuses on facilitating market access and removing technical barriers for U.S. agricultural and industrial products.

While this may expand consumer choices, it also places greater competitive pressure on domestic producers and raises the possibility that imports could grow faster than exports unless Jordanian industries respond efficiently.

The accompanying commercial deals also highlight the depth of the two countries’ economic ties.

Royal Jordanian has purchased six Boeing 787-9 aircraft valued at $1.4 billion and signed long-term leasing agreements worth $500 million. Meanwhile, Hikma Pharmaceuticals plans to invest $1 billion in the United States by 2030, while Jordanian companies have expressed interest in purchasing more than $300 million worth of U.S. raw materials annually.

Ultimately, the agreement presents a genuine opportunity, but it is also a test of Jordan’s economic policy.

If it is used to attract investment, diversify exports, and improve productivity, it can support economic growth, employment, and foreign currency inflows.

However, if its impact is limited to facilitating imports, it will remain more of a diplomatic achievement than a tangible economic gain.