Jordan and Iraq commit to major transport and trade agreements

Jordan and Iraq commit to major transport and trade agreements
Published: 4 February 2019 - 7:14 a.m.
By: Logistics Middle East Staff

Jordan and Iraq have signed energy, trade, transport and industrial agreements as they seek to revive economic ties between the two countries.

Jordan’s Prime Minister Omar Razzaz and Iraqi Prime Minister Adel Abdul Mahdi concluded the agreements on Saturday, which will ease trade between the two countries, see Iraq supply oil to Jordan, and see the development of a joint industrial zone.

Iraq will provide Jordan with 10,000 barrels of crude per day from Kirkuk to be transported across the border by truck at preferential prices, according to the state-run Petra News Agency.

This agreement will also include a “door-to-door” freight shipping accord, under which cargo trucks will go through the shared borders, unimpeded and reach their final destination, saving both time and money for exporters and importers in Iraq and Jordan.

Previously, truck shipments from Jordan bound for Iraq were unloaded and moved to trucks waiting on the other side of the border.

The centrepiece of the agreements is a joint Jordanian-Iraqi industrial zone, a special economic zone for manufacturing and production under which Iraqi goods with Jordanian input, benefit from tariff exemptions under free trade agreements the latter has with several countries.

Jordan has donated 200 hectares for the project, on a yet-undisclosed location within the kingdom, expandable upto 1,000 hectares. The country expects a similar allocation from the Iraqi side, according to a Jordanian government statement.

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The two countries also agreed to link their electricity grids, ordering technical studies to allow Jordan to export up to 300 megawatts of electricity to Iraq by late 2020.

To boost trade, Jordan has also agreed to reduce administrative and handling fees on Iraqi goods entering the kingdom’s Red Sea port of Aqaba by 75 per cent and grant facilities specifically for Iraqi goods at Aqaba.

In return, the Iraqi government enforced a previous agreement to exempt 393 Jordanian products from customs fees.

The agreements seeks to kick-start renewed economic collaboration between the two nations, which enjoyed AED 2.5-billion in trade annually prior to 2015, when the border was closed due to the rise of ISIS.

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