|Our tech economy in the making - The FTA opportunity
|Looking through the agreement and what it entails, it's quite amazing that tech-investments haven't started 'raining' on Jordan already!|
If we've been working so hard for a year and a half, or so, to attract information technology investments to Jordan, and if the government and private sector have a somewhat 'smooth' partnership in this respect, why haven't we seen any results yet?
For a start, it takes time. More than a year or two for sure.
However, there are ways to speed it up. One of those is the American-Jordanian Free Trade Agreement (FTA), signed some months ago which provides Jordan with the privileges of being a US free trade partner; something that is quite valuable for any IT software, hardware or service producer planning to enter the biggest tech market in the world-which, in spite of the tech slowdown, still accounts for 36 percent of global IT spending.
The FTA has seven major sections tackling tariff elimination on virtually all trade between the two countries, full access to the US services market, intellectual property rights, electronic commerce, labor provisions, environmental provisions, consultation and dispute settlement.
Looking through the agreement and what it entails, it's quite amazing that tech-investments haven't started 'raining' on Jordan already!
Apparently, Jordan can engage in 'quota free' business with the US, meaning that the quantity of Jordanian exports, or any product that originates from Jordan, is not limited by a certain amount.
Can you imagine what that could mean for some South Korean or Japanese computer manufacturers?
For decades, they've faced the limitation of specific percentages, or allocations, set for them by the US authorities regarding the total value of exports allowed annually.
If such a PC or component manufacturer were to set up a factory in Jordan, then it wouldn't have to adhere to that allotted amount.
The possibilities are very enticing, considering that over half the PCs sold in the US are assembled, and that the components of those PCs arrive from Asian countries like Taiwan and Korea.
Every year, most tech-product exporting countries in Asia hit their 'quota ceiling', and already achieve considerable profits because they are selling to such a large market as the United States.
A bigger slice of the US market should be a good enough reason to establish a factory, facility or even simple production line in Jordan.
By persevering in communicating these benefits to foreign investors and multi-national IT companies, some big names will set-up shop in Jordan, and not just in the form of 'representation offices' which we've become so used to! Actual PC, component and peripherals production will get started, Jordanian's will work in these factories, technology will be transferred and Jordan's tech economy will be en route to what it deserves to achieve, given the dedication, talent and hard work of locals in the fields of IT.
Israel was given a similar agreement with the US back in 1985. Just look at the massive size of tech investments in Israel which have been accumulated since then.
What's more, Israel's position as a technology exporter today is a result of such free trade agreements. They received a 16 year head-start on us, but that doesn't mean we can't catch up and beat their achievements. We will.