FTA's lead to savings of 37% in apparel manufacturing costs

04 Feb '09

3 min read

The Garments and Textiles Sector in Jordan; is the largest industrial sector in the Kingdom and is growing rapidly with more than 100 ready made garment factories employing more than 55,000 workers, located in 6 different industrial zones.

The sector has access to major markets in the US and the EU. It targets high Full On Board FOB (full package) products and other products with high customs duties in order to make use of the custom reductions under the preferential Free Trade Agreement and QIZ agreement. The sector also provides requirement and training programs.

Advantages of producing in Jordan lie in the fact that Jordan has been a member of the World Trade Organization (WTO) since 2000. It has signed two Duty and Quota Free access agreements with the US; namely the Free Trade Agreement (FTA) and the Qualifying Industrial Zone (QIZ) agreement.

These two agreements allow the importing of raw materials from any part of the world to Jordan free of duties, and exporting the finish goods to the US market free of both quotas and duty, which can save up to 37% of total product cost. It is also worth mentioning that the QIZ plays a big role in promoting peace in the region.

In addition to the two agreements with the US, Jordan has signed other bilateral trade agreements with European countries and others.

Garment and Textile factories have the ability to produce several types of knitted, woven and tricot items for men, women, boys and girls. Clothing includes tops and bottoms, casual, sports and classic wear such as Jeans (Denim) trousers, shorts, polo shirts, suits, sweaters, leggings, underwear, and many other styles, made from a variety of materials and compositions such as Jersey, Jersey with spandex, fleece, polar fleece, denims, twills, cotton, synthetics, mixture of both, wool and acrylic compositions.

The sector's factories are committed to producing all items with high quality, proven cost and unbeatable service. Through using quality levels of 2.5 and 4.0, inspections are carried out during and after the manufacturing and finishing processes to ensure retail quality performance is improved and sales are enhanced.

All factories use facilities and technical capabilities which include state of the art well ventilated facilities and garment equipment.

Awareness of the social compliance:
As of March 2007, the Government of Jordan published its Action Plan to improve its labor administration and labor compliance systems. The Action Plan focuses on , firstly, improving working conditions through inspection and compliance assistance, secondly, enhancing institutional capacity for labor administration and law enforcement, and lastly increasing employment opportunities for Jordanians. All three focus areas are of a significant importance to the apparel sector.

The Government of Jordan regards employers and workers as partners. As a result, Jordan is well on its way to becoming a model for labor administration and compliance for the region.

Shipping lead-time to the US:
Exports to the US go through two main sea ports in the Middle East; namely Aqaba and Haifa, allowing less than three weeks time to reach the East Coast for time efficiency solutions. These two sea ports are ranked amongst the quickest suppliers to the East Coast. Major Customers from USA & EU are currently producing in Jordan.

Jordan Garments, Accesories & Textile Exporters Association

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