Minister Magicshow Feb2006
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Transcript of Minister Magicshow Feb2006
Jordan’s Apparel Industry
MAGIC ShowLas Vegas 2006
Ministry of Industry and TradeThe Hashemite Kingdom of Jordan
The Hashemite Kingdom of Jordan
• A population of 5.4 million.
• 35,000 square miles.• Bordering five
markets...
...and accessing a billion
consumers
FDI Performance Indicators (UNCTAD)
Under PerformersBelow PotentialAbove
PotentialFront Runners
1988-1990
Jordan
Morocco
Lebanon
Japan
Italy
Saudi Arabia
UAE
Syria
Tunisia
Egypt
Bahrain
Ireland
Singapore
USA, China
1993-1995Syria
Lebanon
Jordan
Saudi Arabia
Japan
Italy, USA
Morocco
Tunisia
Egypt
Bahrain
Singapore
Ireland
China
2000-2002Syria
Lebanon
Japan ,Italy
Saudi Arabia
UAE ,Egypt
Bahrain, USA
Morocco
Tunisia
Jordan
Singapore
Ireland
China
Macroeconomic Stability1999 2004 2005
Inflation(%) 0.6 3.4 3.4
Ext. Debt (% of GDP) 95.5 67.4 57.3
Exports ($ bn) 1.48 3.29 3.9 (Nov)
Real GDP Growth(%) 3.4 7.7 7.7
GDP Per Capita($) 1,734 2,163 2,306(Estimated)
Market Cap. ($ bn) 18.4 37.75.8
Foreign Res. ($ bn) 1.99 4.82 4.8
Attractive Investment Environment
Investment Promotion Law Incentives:
• Income and Social Services Tax:
Exemptions up to 100% & up to 20 years.
• Customs and Sales Tax:
Capital goods and machinery are exempted from custom duties & sales tax.
Attractive Investment Environment
People are our greatest asset:• Well educated population.• Over 91% literacy rate. • 180,000 students currently enrolled in universities.• 17% of the population receives higher education.• 24 universities (14 private, 10 public).• 60 community colleges.• 35 vocational training centers training over 10,000
people each year.• Competitive wage structure.• Excellent labor relationship.
International Gateway
• Member of (WTO).• Jordan US Free Trade Agreement (FTA).• Qualifying Industrial Zone (QIZ) Agreement. • Greater Arab Free Trade Agreement (GAFTA).• Euro-Jordanian Association Agreement.• Aghadir Agreement .• Jordan Singapore FTA.• and 120 other bilateral trade agreements…
Access To One Billion Consumers.. Duty Free & Quota Free
QIZ & FTA
QIZ35% Regional content:
– 11.7% made in the QIZ.
(Restricted to QIZ approved areas)
– 8% made in Israel – Balance made in QIZ,
West Bank/Gaza or Israel
Up to 15% made in USA
FTA35% Domestic content:
35% made in Jordan (Entire Country)
Up to 15% made in USA
QIZ and FTA Rules of Origin
35% Content =
Cost or value of materials produced
+
Direct costs of processing operations performed
___________________________________________
35% of the appraised value of the article
QIZ and FTA Rules of Origin
Raw materials, parts, components etc. that are wholly the growth, product, or manufacture of :
((QIZ, Israel, Gaza or West Bank) or Jordan)
Raw materials, components etc. which undergo a “double substantial transformation”
“Materials Produced”
OR
Double Substantial Transformation
Fabric cut into component
pieces in QIZ or Jordan
Foreign Fabric Component
pieces sewn or assembled in QIZ or Jordan
= Double Substantial Transformation
QIZ & FTA
• Saving up to 37% on custom duties through 100% duty-free access under the QIZ.
• Almost 98% of Jordanian exports reached zero custom duties under the FTA.
• Only 100 apparel items are still subject to custom duties under the FTA and have reached 40% of their NTR (Normal Trade Relations (WTO) duty rates.
QIZ & FTA
• Saving up to 37% on custom duties through 100% duty-free access under the QIZ.
• Almost 98% of Jordanian exports reached zero custom duties under the FTA.
• Only 100 apparel items are still subject to custom duties under the FTA and have reached 40% of their NTR (Normal Trade Relations (WTO)) duty rates.
Flexibility and freedom to import raw materials from
anywhere in the world (use of third country fabric
fulfills Rules of Origin requirements under QIZ and
FTA if it undergoes double transformation)
(Other FTA’s apply yarn forward rules of origin)
Flexibility and freedom to import raw materials from
anywhere in the world (use of third country fabric
fulfills Rules of Origin requirements under QIZ and
FTA if it undergoes double transformation)
(Other FTA’s apply yarn forward rules of origin)
Jordanian Apparel Exports to the USA Per Agreement (US $)
0200,000400,000600,000800,000
1,000,0001,200,000
2000 2001 2002 2003 2004 2005
QIZ FTA NTR
The Jordanian Apparel Sector
• Leadership and Government are fully committed to sector support and development.
The Jordanian Apparel Sector
• 30% of the Jordanian exports (over $1 billion).• Employs over 50,000 people, mainly in rural areas
with a majority of female workers. • 90% of bilateral trade between Jordan & Israel is
attributed to QIZ.• Major international buyers sourcing from Jordan: JC Penney, Levi’s, Liz Claiborne, Gap, Gloria
Vanderbilt, Victoria’s Secret, Jones Apparel, Perry Ellis, PVH, Sara Lee, Banana Republic, Wal-Mart, Target…
Jordanian Apparel Exports
Examples of Items Exported under the QIZ (zero custom duties):
• Manmade fibers knitted Sweaters and pullovers (61103030) (NTR 32%)
• Women’s girl’s trousers, shorts, breeches knitted of synthetic fibers (62046335) (NTR 28.6% )
• Women’s trousers, shorts, breeches knitted of artificial fibers (61046920) (NTR 28.2%)
• Cotton knitted Sweaters and pullovers (61102020) (NTR 16.5%)
Jordanian Apparel Exports
Examples of Items Exported under the FTA (zero custom duties):
• Cotton knitted T-shirts (6109100) (NTR 16.5% )
• Women’s woven cotton trousers, shorts, breeches (62046240) (NTR 16.6%)
• Men’s cotton woven trousers, shorts (62034240) (NTR 16.6%)
• Women’s woven cotton blouses and shirts (62063030) (NTR 15.4% )
• Wool knitted Sweaters and pullovers (61101100) (NTR 16%)
Future Outlook for the Jordanian Apparel Sector
• Track record in mass and middle market segments and the potential to enter higher and specialized market niches.
• Focus on value-added products.
• Introducing design capabilities and the creation of middle and upper management in the industry.
• Established on-the-job technical training program for Jordanian workers aiming at replacing guest workers.
Future Outlook for the Jordanian Apparel Exports
Complete package of logistics improvements that includes:
• Aqaba Port improvements
• Land Transportation (liberalization of monopoly)
• Quarterly QPR (Qualified Product Request)
Future Outlook for the Jordanian Apparel Exports
• Complete package of exemptions and tax and fiscal incentives for the Apparel sector.
• FTA with Turkey (Mid 2006)– Flexibility of sourcing Turkish fabrics– Cuts down on lead time– Potential for exporting to the EU market under the
Pan-Euro-Med accumulation system
• A similar agreement was reached with Israel to increase the potential of exporting to the EU under the same scheme
Thank You