Jordan halts free trade accord with Turkey amid increasing geopolitical tension

A handout picture released by the Jordanian Royal Palace on August 21, 2017 shows Jordanian King Abdullah II (R) greeting Turkish President Recep Tayyip Erdogan at the royal palace in Amman. (AFP file)

AMMAN/ LONDON: Jordan has suspended a free trade agreement (FTA) with Turkey in a move as much about regional politics as imports and exports, according to a leading academic at the London School of Economics (LSE).
In an interview with Arab News, Fawaz Gerges, professor of international relations at the LSE, said: “What you are seeing now is Jordan’s realignment with its key Arab allies, to send a clear message to Turkey that what Turkey has been doing is unacceptable.”
Turkey, he claimed, had been “intervening” in internal Arab affairs — for instance, offering economic and “military support” for Qatar, which has been boycotted by Saudi Arabia, Egypt and the UAE for its alleged support of extremism and links with Iran.
According to Jordan’s state-controlled Petra news agency, Amman’s decision to suspend the FTA with Turkey was taken “in light of the closure of border crossings with neighboring countries and the shrinking of traditional markets for national exports.”
Additionally, Jordan faced “unequal” competition with Turkish products, which Amman alleged receive Turkish government subsidies, leading to negative effects for local producers. Petra reported that the FTA had “further tilted the trade balance in favor of the Turkish side, which had failed to ensure the flow of sufficient investments into Jordan.”
But Gerges told Arab News: “Behind the trade issue, relations with Turkey have reached a really low point.” He mentioned a number of tensions such as Turkey’s military incursions into Syria, the civilian casualties, Turkish support for Qatar and the Muslim Brotherhood in Egypt — all these factors had “poisoned” Arab-Turkish relations,” he said.
Gerges claimed that Turkey had hosted hundreds of Muslim Brotherhood members, and Turkey had “overwhelmingly supported the Muslim Brotherhood against the Egyptian government of Abdel Fattah El-Sisi.
He said: “At one point Turkey was very powerful, a very influential state before the Arab Spring uprising. But Turkey has sided fully with the Islamists; this has really angered not just Arab regimes but also big chunks of the Arab populations,” he said.
“What Turkey is trying to do is to fill the vacuum of Arab fragility (post the Arab Spring), and this is unacceptable to key Arab states... in particular Saudi Arabia, the UAE and Egypt.”
Gerges also said that Turkish President Recep Tayyip Erdogan had gone out of his way to take sides, which he said was an example of how Turkey had not recognized “the limits of its influence.”
He added: “Jordan has been trying to walk a tightrope between its close relations with its Arab allies, and Turkey as a non Arab state. And this has now proven to be untenable. “The straw that broke the camel’s back is Turkey’s row with the Gulf over Qatar, which is a huge issue for the Arab states.”
Last year, a group of Turkish servicemen arrived at a base in southern Doha in accordance with an agreement signed between Qatar and Turkey in 2014.
The Turkish military held their first drills at the Tariq bin Ziyad military base in August 2017. It was reported that Ankara deployed yet more troops to Qatar’s Al-Udeid Air Base in December, but in February 2018 Turkey refuted claims that Ankara had sent additional military forces.
The suspension of the FTA comes a month after a visit by the Turkish foreign minister and top officials to Jordan, where they discussed political and economic relations.
Petra said that Jordan was in the process of evaluating all FTAs that may not have resulted in the envisioned benefits to the national economy.
Turkey and the UAE last week clashed in a separate incident when a senior UAE official tweeted that Turkey’s policy toward the Arab states was not reasonable and advised it to respect their sovereignty.
“It is no secret that Arab-Turkish relations aren’t in their best state,” UAE Minister of State for Foreign Affairs Anwar Gargash tweeted.
“In order to return to balance, Ankara has to respect Arab sovereignty and deal with its neighbors with wisdom and rationality,” he said.
The two countries were drawn into a different quarrel in December over a retweet by the Emirati foreign minister that Erdogan called an insult.
Sheikh Abdullah bin Zayed, UAE minister of foreign affairs and international cooperation, shared a tweet at the time that accused Turkish troops of looting the holy city of Madinah a century ago, prompting Erdogan to lash out saying that the minister had been spoiled by oil money.
Turkey then renamed the street in Ankara where the UAE Embassy is located after the Ottoman military commander who Sheikh Abdullah had appeared to criticize.
Last year, Turkey exported goods and products worth $672 million to Jordan, mainly composed of textile and furniture; while Jordan mostly exports fertilizers to Turkey worth of $78 million. Turkey’s direct investments to the country stand at about $300 million.
Currently, Turkey has 24 FTAs with various countries, including Palestine, Egypt, the Palestinian Authority and Israel, while the FTA with Syria was suspended in 2011 due to the civil war. The FTA with Lebanon awaits the Lebanese parliament’s approval. The FTAs abolish customs duties between the contracting parties.
Ali Bakeer, an Ankara-based political analyst and researcher, believes that the Jordanian decision is purely economic and has nothing to do with any political issue; because it is suspended and not canceled.
But Esen Caglar, managing director of Policy Analytics Lab, a think tank and consultancy based in Ankara, said Jordan’s decision to suspend the FTA between the two countries was bad economic policy.
“Jordan is a small economy. It should be a small open economy if it wants to improve the welfare of its citizens and competitiveness of its producers,” Caglar told Arab News.
“The way of protecting its national economy is not by taking such measures, but by increasing competitiveness of its sectors. Jordan also needs to improve its investment environment and make it more predictable and cheaper to do business” he added.
Salameh Darawi, editor of the economic website Al Maqar, told Arab News that the trade deal was not providing the promised Turkish investment in Jordan. “The deal had two parts: One investment in IT and in mining industries, and the other free trade.”
While there is no disagreement that Turkey has not invested in Jordan, there are mixed opinions as to the benefits of the free trade deal. “While the trade balance is in favor of Turkey, it is not clear if subsidized Turkish goods have flooded the local market to the degree that it has hurt local products,” Darawi told Arab News.
Issam Murad, the head of the Amman Chamber of Commerce, however, responded in a statement by saying that “stopping free trade with Turkey will hurt the commercial and service sectors.” The statement further noted that “many investments, deals and agreements were made based on this agreement and all of these commercial entities who worked on the basis of an existence of a valid agreement will be hurt.”