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An Analysis of Economic Impacts of FTAs on Strategic Industries in Jordan

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  • Moonsung Kang

Abstract

This paper analyzes the economic impacts of Jordan's regional trade agreements on its major strategic industries. We calculate each individual industry's revealed comparative advantage (RCA) index to identify Jordan's strategic industries showing comparative advantages. And then we analyze each individual industry's export performance before and after its regional trade agreements have entered into force. This paper found that the bilateral free trade agreement (FTA) between Jordan and the United States has shown a positive impact on the Jordanian export performance, mainly in the textiles and clothing industry. However, it has not been quite as effective in enhancing Jordanian export opportunities in other industries, such as chemicals, vegetable products, paper and paperboard, and prepared foodstuffs, although there has been a growing positive impact on precious stones. The positive impacts of the FTA with the United States on Jordan's textiles and clothing industry have been heavily dependent upon its initiatives and programs of QIZs. Pan Arab Free-Trade Area (PAFTA) has shown a relatively positive impact on several industries, such as chemicals, vegetable products, paper and paperboard, precious stones, and prepared foodstuffs, although chemicals and vegetable products have shown a steady export performance no matter whether PAFTA enters into force. However, the bilateral FTA with the EC has failed to show any significant impact on the Jordanian export performances of its strategic industries having comparative advantages.

Suggested Citation

  • Moonsung Kang, 2011. "An Analysis of Economic Impacts of FTAs on Strategic Industries in Jordan," International Area Studies Review, Center for International Area Studies, Hankuk University of Foreign Studies, vol. 14(4), pages 73-96, December.
    • Handle: RePEc:sae:intare:v:14:y:2011:i:4:p:73-96
    DOI: 10.1177/223386591101400405
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    References listed on IDEAS

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    1. Kang, Moonsung & Kim, Hyuk Hwang & Lee, Hongshik & Lee, Joonhyung, 2010. "Regional production networks, service offshoring, and productivity in East Asia," Japan and the World Economy, Elsevier, vol. 22(3), pages 206-216, August.
    2. Bark, Taeho & Kang, Moonsung, 2011. "Asia’s Strategic Participation in the Group of 20 for Global Economic Governance Reform: From the Perspective of International Trade," Working Papers on Regional Economic Integration 74, Asian Development Bank.
    3. James Cassing, 2006. "Jordan – United States Free Trade Agreement Economic Impact Study: Searching for Effects of the FTA on Exports` Imports and Trade Related Investments," Working Paper 226, Department of Economics, University of Pittsburgh, revised Jan 2006.
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