Interview with Mr. M.M. Khourma

Face2Face
Mr. M.M. Khourma
Mr. M.M. Khourma
Chairman
Jordan Garments, Accessories, & Textiles Exporters’ Association (JGATE)
Jordan Garments, Accessories, & Textiles Exporters’ Association (JGATE)

Face2Face wishes a great year ahead, Mr. Khourma! During the Face2Face talk with JGATE in the year 2009, we learnt that T&C industry contributes vital share in Jordanian economy. Is the story same for current times too?

The Garment sector became a major component of the Jordan national exports figures since its existence beginning 1995. The peak was in 2006; the sector exports reached USD 1,181,000,095. There came a slight drop in 2010 but the sector managed to maintain the one billion figure reaching USD 1000,110,000, and the current figures indicate the total exports (2011) from the sector is to cross the one billion dollar figures amounting to 17-20% of the total national exports. In recent past, an independent study made by Professor Brown from Tufts University, reveals that the value added of the Jordanian garment sector is 36%.

Interesting. To learn better about the sector, can you please provide us the growth pattern that it has followed for last 2 years, for these years have seen critical times?

Export figures in 2008 were USD 926mn, with a drop of about 19% in 2009 due to world economic crises. This was followed by an increase of about 33% in 2010 due to stock replenishment in the US market.

Well as the globalization is here to stay increasing competition, Sir, if asked – how competitive is Jordan as MENA country in T&C sector, what would be your comments?

Jordan signed the QIZ agreement with the US in late last century, followed in December 2000 with the signing of the Free Trade Agreement (FTA) with the US, which came into full effect in 2010. Both agreements gave Jordan a competitive edge in the market by allowing Jordan made products including garments to enter the US market duty free and quota free. That is besides the fact that Jordan was able to provide a stable and secured environment for investment in an unsettled region, which was enough of the reason for investment to migrate to Jordan especially after what is called the Arab Spring. I would like to mention that Jordan also signed two other FTAs in 2010: one which is considered to be a great opportunity to enter the EU market for the Jordanian garment industry, was signed with Turkey, and the other FTA was signed with Canada, which again will give the sector and Jordan a variety of markets.

Kindly also share with us updates on the Qualifying Industrial Zone -QIZ, about which you mentioned in your previous comments?

As I mentioned earlier the QIZ agreement was signed with the United States in 1998 designating thirteen QIZs in Jordan. The purpose of this trade initiative has been to support the prosperity and stability in the Middle East by encouraging regional economic integration. For an article made in a QIZ to gain duty-free entry, QIZ factories must add at least 35 percent to the value of the article in orders. This 35 percent minimum content figure can include value added in Jordan, Egypt, United States or Israel. The signing of the Jordan-US FTA in December 2000 changed the rules of origin and maintained the same benefits. In this case any article made in Jordan (inside or outside QIZ) adding 35 percent local component will gain Duty Free entry to the US market. After Jordan-US FTA (Dec 2000), a very high percentage of the exports figures now is based on the FTA and very little on the QIZ. This is mainly due to the fact that most of the components that factories used to obtain from Israel are currently manufactured locally and at lucrative prices.
Published on: 09/01/2012

DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.

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