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 QIZs, SEZs, DZs and Free Zones   >   Aqaba Special Economic Zone and Aqaba Development Corporation

Jordan’s trade sector is growing rapidly, primarily as a result of having more FTAs than any other Arab state in the region. With US7 bil. exports In 2009, it ranked 4th after UAE, Bahrain, and Qatar. Manufactured exports from QIZs to the US were more than US$1 bil. while the remainder of its US$7 bil. exports were primarily garments, fertilizers, potash, phosphates, pharmaceutical products and vegetables.

QIZs, SEZs, DZs and Free Zones

Jordanian industry, and industrial exports, cannot be discussed without reference to a relatively new and unique concept in international trade, variously called by the US a Qualified Industrial Zone (QIZ), and in Jordan either a Special Economic Zone (SEZ), or simply  Development Zone (DZ).

QIZ legislation was first enacted by the US in 1996 to give free trade to industries producing in certain zones in Israel and Palestine. A Jordanian businessman, Omar Salah, proposed extending the QIZ concept to Jordan. Any Industrial product manufactured in such zones can be exported to the US tax-, tariff-, and quota-free, provided at least 8% of its materials come from Israel.

The first QIZ-SEZ was authorized in 1997 for the Al-Hassan Industrial Estate in Irbid. Since then, other SEZs have been authorized for Jordan, notably Al Karak, Zarqa, Aqaba, Jordan Cyber City in Irbid, and two in Amman.

In 2001, Jordan also signed an FTA with the US, which is complementary to QIZs.  Traders can export their products under either arrangement or both, provided their respective requirements are met.

In 2008, Jordan created the Development Zone Commission (DZC) to oversee its several SEZs, or DZs, which are considered Jordan’s strongest source of job growth, providing for more than 40,000 jobs.

Bilal Al-Bashir, Chief Commissioner of the DZC, explains that “Each zone offers comparative advantages that are complementary and offer opportunities for clustering and linkage with the larger economy.  Two zones have value in terms of location for logistics and others have industrial advantages due to the presence of natural resources. 

Another zone, for example, has the potential to develop solar energy due to the sun and two other zones are for tourism due to their proximity to the Dead Sea.  We also have zones in IT and business and these are quite young.   We have been successful in attracting both domestic and foreign investment to these zones and there is a lot of potential for growth- the outlook is promising”.

Free Zones

In addition to QIZs-SEZs-DZs, which provide tariff-, customs-, and quota-free exports to the US, Jordan has also created “Free Zones,” which exempt companies and their employees from all Jordanian taxes—including income, excise, social affairs, and property taxes; and even governmental license and permit fees. These free zones sometimes overlap SEZs, and sometimes are separate.

Aqaba Special Economic Zone and Aqaba Development Corporation

The Aqaba Special Economic Zone (ASEZ) was established in 2001 to take advantage of free trade with the US. In 2004, Jordan created the Aqaba Development Corporation (ADC) to own and oversee development of both the ASEZ and the port of Aqaba, which is an SEZ with an overlapping Free Zone, is like an autonomous city, independent of other regions.

As Mohammed Turk, Chairman of ADC, says:; ““We have our own law that allows the economic authority to preside over all licensing and customs, taxes, and duties.  The major point is that we are localized and use our own laws to service the customers.”

As a result, Turk says, the attitude here is great: “we are able to attract more people who have lost money and business elsewhere.  The opportunities are amazing here and we are very serious about satisfying our investors to the fullest; nothing is impossible and we do not like to say no.  We like to sense their needs and work towards making their business happen.”

The Aqaba Container Terminal (ACT) handles all the shipping through the port. “In the last year,” says Adeeb Sartawi, CCO of ACT, “we have seen incredible growth in the global container business and we have seen a huge surge in traffic between Europe and Asia and Asia and the West Cost of the US.”

Sartawi credits this to three facts:
1)“ACT proved to the ship owners and businesses that we are a very reliable terminal;” 
2) “Aqaba offers the cheapest port in the region by far;” and
3) “we offer quality and efficiency.”

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