The US decision to exempt Jordanian apparel and textile exports from customs duties, while reducing tariffs on most other Jordanian products to 10 per cent, is one of the most important developments in economic relations between Jordan and the United States since the Free Trade Agreement came into force in 2001. This decision is especially important because Jordan's exports of apparel and textiles to the United States exceeded JD431 million during the first four months of this year, making this sector the largest Jordanian exporter to the US market.

 

From an economic point of view, tariffs are more than just taxes on imported goods. They are an important factor that affects a country's competitiveness in international markets. Lower tariffs reduce the cost of entering a market, making products more competitive in terms of price and helping companies increase their market share. Therefore, giving Jordanian products duty-free access to the U.S. market provides a clear competitive advantage over many competing countries and creates new opportunities for Jordanian exporters.

 

The importance of this agreement goes beyond increasing exports. It can also encourage foreign direct investment. International companies do not only look for low production costs; they also look for countries that provide easy access to major global markets. Since products made in Jordan can now enter the US market without customs duties, Jordan becomes a more attractive location for export-oriented industries. This is especially important as many multinational companies are changing their global supply chains and searching for new production locations.

 

At the macroeconomic level, higher exports bring benefits to the whole economy. Stronger foreign demand increases industrial production, supports economic growth, and creates more business for transportation, logistics, storage, and insurance services. It also increases foreign currency earnings, which strengthens the balance of payments and supports the country's foreign exchange reserves. In addition, expanding industrial production creates new job opportunities, both directly in factories and indirectly in related sectors. This makes the agreement an important opportunity to help reduce unemployment, one of Jordan's biggest economic challenges.

 

There is no doubt that gaining duty-free access to the world's largest consumer market is a major economic opportunity for Jordan. However, the real question is not what Jordan has gained from the agreement, but how the country can make the best use of it. International experience shows that trade agreements do not automatically lead to economic growth. For example, Mexico successfully used its free trade agreement with the United States to attract large industrial investments and become an important part of global value chains in the automotive and electronics industries. On the other hand, many countries signed similar agreements but achieved limited results because of weak business environments, high production costs, and the absence of effective industrial policies. This shows that trade agreements create opportunities, but government policies determine how much countries benefit from them.

 

For Jordan to fully benefit from this agreement, increasing exports alone will not be enough. The country also needs to improve the investment environment, simplify business procedures, reduce production, energy, and transportation costs, improve logistics services, develop workforce skills, and strengthen links between local industries and supply chains. These steps will increase the domestic value added of Jordanian exports and make the economic benefits more sustainable.

 

At the same time, attention should not focus only on the apparel sector. The U.S. decision also covers a wide range of leather and textile products, including bags, home furnishings, towels, curtains, fabrics, yarns, and industrial inputs. This creates an opportunity to diversify Jordan's exports. In addition, Jordan has comparative advantages in more than 120 products, including mining, fertilizers, chemicals, pharmaceuticals, and other industries that can generate higher value added if supported by a clear industrial strategy.

 

Despite the positive expectations, the success of this agreement should be measured by its actual economic results, not only by its terms. Success is not simply about duty-free access or higher export values. It should be measured by Jordan's ability to attract new investment, increase domestic production, create high-quality jobs, raise value added and improve long-term economic growth and productivity.

 

There is no doubt that this agreement is a strategic opportunity for Jordan's economy. However, it is not an end in itself. It is a tool to promote investment, production, and employment. Its success will depend on Jordan's ability to turn its tariff advantage into a production advantage by attracting new industries, increasing the value added of its exports, and creating better jobs for Jordanians. Duty-free access opens the door to the U.S. market, but only a more competitive economy can turn this opportunity into long-term economic development. The next step is not only to sign trade agreements, but also to maximize their economic benefits through effective industrial and economic policies.