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WTO and Its Success in Jordan Essay

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Updated: Aug 30th, 2021

Introduction: WTO Principles in Jordan

Globalization seems to have taken its toll on business and economy all over the world. For those states that have not been included into the WTO, it is becoming increasingly hard to provide its citizens with decent opportunities in education and career (Ekins & Voituriez 2012).

However, joining the WTO also means facing a number of challenges.

Despite the success and opportunities that entering the WTO is bound to bring to Jordan entrepreneurs, the state is obviously going to suffer a crisis caused by the necessity to comply with the standards of the organization, which the Gravity Model is bound to help with.

Discussion: The Essence of Economic Growth


Jordan is primarily known for its scarce resources (El-Naser 2009). As a result, the state owns much money to its current business partners.

With better logistics strategy, Jordanian entrepreneurs could focus on improving their companies’ performance; however, at present, most money goes for transportation and delivery of the products.

As a result, the state is in huge debt to its business partners (Oxford Business Group 2009). However, by entering the WTO, the state authorities hope to raise the public and private entrepreneurships’ revenues (Ibpusa 2009).


As it has been stressed, the Jordanian government is going to implement the Gravity Model, which presupposes that Jordan will have to pick its business partners based not only on the influence that the latter have in the WTO, but also on the distance between the two states (van Bergeijk & Brakman 2010).


It is expected that participation in the WTO and trading in the realm of the global market will bring Jordan economic success: “for a small country such as Jordan, liberalizing the economy and integration into the world market could offer the best prospect to overcome the limited scale of the domestic economy and to help increase productivity through specialization” (Saqfalhait 2012, p. 180).

Analysis: The Success of the Gravity Model

Positive effects

Despite the rapid change that the economy of Jordan was to be exposed to, there has been a lot of improvement in the business sphere of the state.

As the existing reports show, private entrepreneurship was finally given another chance to grow, and the problem of unemployment in public and private organizations was partially solved.

In addition, employees were finally provided with more options for personal and professional growth (Carroll 2003).

However, these are not the only positive effects that the agreement with the WTO brought Jordan and its businessmen. In addition to the chances for small and medium entrepreneurship (SME) development, the opportunities for the state economy in general emerged (Fawzy 2002).


Perhaps, one of the most impressive positive effects that the introduction of the WTO principles into the economic strategies of Jordan has had on the country’s economy concerns the opportunities that the Jordan entrepreneurs, as well as the state government, have in front of them.

By joining the WTO system, Jordan has become a member of the worldwide trade process, therefore, increasing its chances on not only getting investments from foreign states, but also starting partnership with major foreign companies and expanding some of the most efficient Jordan entrepreneurships into international corporations (Lucas 2006).


However, by accepting the WTO basic guidelines and becoming a part of the global trade system, the state authorities have also exposed the Jordan economy to an incredibly competitive environment, therefore, making its major companies especially vulnerable to the high-grossing rivals from other states (Malkawi 2006).

Apart from high competition rates, Jordan will also have to face the challenge of rearranging some of its businesses so that they could fit into the global trade environment.

The process of adapting towards the new rules is not going to be easy and will most certainly take considerable time (Tomaria 2008).

Negative effects

Sadly enough, by signing the agreement with the WTO, Jordan authorities have also had certain negative effects on the state economy.

Every change occurring to a state triggers certain problems, since, to get adjusted to this change both in political and economical field, state officials need much time, money and effort (Hassan & Al-Saci 2004). (Mitchell 2005).

Nevertheless, due to the reasonable steps undertaken by the Jordan government, it can be assumed that the state economy is out of danger at present. Still, a brief overview of the current threats and the means to handle them is still required (Mitchell 2005).


As it has been stressed above, most of the issues that the Jordanian business people and entrepreneurs are having at present can be considered temporary and will be solved as soon as the process of adapting towards the new WTO principles is over (Center for International Private Enterprise 2010).

However, other issues need an urgent solution, which calls for certain measures to be taken.

To start with, it is clear that the Jordanian SMEs require help from the government or foreign investors in order to become competitive in the new environment (International Monetary Fund 2004).

Even with the quality of the production raised, there are still a lot of issues to be solved, especially the ones concerning technology and the availability of resources. As a result, it is crucial that SMEs should be provided with support from the government, i.e., better loan options in banks, etc.

Current issues and their solutions

When it comes to the evaluation of the major blocks standing in the way of Jordan entering the global market, the concern regarding the national debt must be mentioned.

Indeed, according to the recent calculations, the debt that Jordan acquired due to the overseas borrowings made in 1980 reached drastic proportions in merely several years (International Monetary Fund 2008).

To solve the given problem, Jordan had to improve its economy, which could be carried out by allowing SMEs develop. The Jordan parliament, however, preferred another means to solve the situation, which concerned cutting the national budget.

These endeavors to replenish the national economy and get out of the debt, however, did not lead to any fruitful results:

There was a realization that, for a small country such as Jordan, liberalizing the economy and integration into the world market could offer the best prospect to overcome the limited scale of the domestic economy and to help increase productivity through specialization. (Saqfalhait 2012, p. 180)

Therefore, it was clear that restructuring the national economy by accepting the WTO rules and joining the process of international trade seemed much like a perfect way out of the given problem to the Jordanian authorities.

However, it appears that, to handle the situation regarding the debt that Jordan is currently in, the state needs the assistance from international partners (El-Said & Becker 2001).

The given tactics will allow for not only attracting more investors, who can possibly help the Jordanian SMEs take off the ground and become successful international enterprises, but will also allow for the exchange of experience and the introduction of new business strategies into the Jordanian companies, both public and private (Stevenson 2010).

The last, but definitely not the least goal that the introduction of the WTO principles will help the state to accomplish concerns the upgrade in the qualifications of the labor force, which, according to the recently acquired information, has rather dated skills and needs to update them so that the performance of the staff could be up to the WTO standards (Masiejewski, Mansur, & Alonso-Gamo 1990).

The aforementioned challenges can be faced and dealt with efficiently once the principles of the Multinational Trading System are firmly integrated into the Jordan economy (Bindi & Angelescu 2012).

By adopting a flexible system of government procurement, the Jordanian authorities will be able to get the public and private companies into the process of integration with the multinational trading system (Chauffour & Maur 2011).

Conclusion: Multinational Trading System

As it has been stressed, the process of entering the multinational trading system will not flow impeccably perfect; on the contrary, with the debt that the Jordanian government has at present, it can be assumed that Jordanian entrepreneurs will have a number of issues in finding business partners, as well as customers to promote their services to. However, these issues can be dealt with.

Multinational Trading System might be a bit of a challenge, with all the regulations and the high standards that every state has to uphold to.

However, the opportunities that the members of the WTO can enjoy definitely compensate for the pressure of competition and the need to keep an eye on upgrading business strategies.

Recommendations: What Can Be Improved

The process of Jordan integrating into the world market is most likely to result in the state having certain economical issues at first.

Seeing how the Jordanian SMEs need further development, which also requires financial resources, it will be necessary to attract partners who could invest into the Jordanian SMEs and public companies development, as well as the training of the staff.

Consequently, it would be wrong to assume that the state is going to pay its debt immediately and recover from the losses that it has been taking for the last few decades.

Therefore, the only possible solution for Jordan at present is to figure out how to adapt to the requirements set by the WTO and encourage the growth of the state SMEs, which the Gravity Model can allow for.

Reference List

Bindi, F & Angelescu, I 2012, The foreign policy of the European Union: assessing Europe’s role in the world (2nd ed.), The Brookings Institution, Washington, DC.

Carroll, K B 2003, Business as usual: Economic reform in Jordan, Lexington Books, Lanham, MD.

Center for International Private Enterprise 2010, Strategies for policy reform (vol. 2): Engaging entrepreneurs in democratic governance, CIPE, Washington, DC.

Chauffour, J-P & Maur, J-C 2011, Preferential trade agreement policies for development, The World Bank, Washington, DC.

Ekins, P & Voituriez, T 2012, Trade, globalization and sustainability impact assessment, Earthscan, Sterling, VA.

El-Naser, H 2009, Management of scarce water resources: A Middle Eastern experience, MIT University Press, Billerica, MA.

El-Said, H & Becker, K 2001, Management and international business issues in Jordan, Routledge, New York, NY.

Fawzy, S 2002, Globalization and firm competitiveness in Middle East, World Bank Publications, Washington, DC.

Hassan, F M A & Al-Saci D 2004, Jordan: Supporting stable development in a challenging region, World Bank Publications, Washington, DC.

Ibpusa 2009, Islamic financial institutions, Intel Business Publications, Washington, DC.

International Monetary Fund 2004, Jordan: 2004, International Monetary Fund, Washington, DC.

International Monetary Fund 2008, Jordan: 2008, International Monetary Fund, Washington, DC.

Lucas, R E 2006, Institutions and the politics of survival in Jordan, State University of New York Press, Albany, NY.

Malkawi, B H 2006, Jordan and the World trading system: A case study, American University Library, Washington, DC.

Masiejewski, E, Mansur, A S, & Alonso-Gamo, P 1990, Jordan – strategy for adjustment and growth, International Monetary Fund Publication Services, Washington, DC.

Mitchell, A D 2005, Challenges and prospects for the WTO, Cameron May, London, UK.

Oxford Business Group 2009, The report: Jordan 2009. Oxford Business Group, Oxford, UK.

Saqfalhait, N 2012, ‘Jordan WTO accession: A quantitative investigation and estimation of a gravity model,’ Applied Econometrics and International Development, vol. 12 no. 2, pp. 180–196.

Stevenson, L 2010. Private sector and enterprise development: fostering growth in the Middle East and North Africa, Edward Elgar, Northampton, MA.

Tomaria, R V 2008, Legacy of a rentier state: Reforming Jordan’s energy, water and telecommunications sectors, University of California Press, Berkeley, CA.

Van Bergeijk, P G A, & Brakman, S 2010, The gravity model in international trade: advances and applications, Cambridge University Press, Cambridge, UK.

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