The UAE-Jordan Comprehensive Economic Partnership Agreement (“CEPA”) comes into force

In detail

The  CEPA makes commitments in multiple areas such as trade in goods and services, rules of origin (“RoOs”)*, customs and trade facilitation, technical barriers to trade (“TBT”), sanitary and phytosanitary standards ("SPS"), digital trade, investment, intellectual property ("IP"), trade remedies, dispute settlement ("DS"), small and medium-sized enterprises ("SMEs"), and economic cooperation.​

Notable benefits of the CEPA for the UAE and Jordan include:

1. Free Zone Goods​

While the GAFTA Agreement does not provide explicit guidance on the treatment of goods originating from free zones, in practice this has often posed challenges for free zones manufacturers and traders seeking preferential access under GAFTA. In contrast, the UAE-Jordan CEPA marks a significant shift by clearly allowing goods manufactured in free zones to benefit from preferential tariff treatment, provided they satisfy the CEPA RoOs.

This development reinforces customs certainty by formally recognising the eligibility of qualifying free zone originating goods for preferential tariff treatment, thereby expanding the operational scope for free zone manufacturers and enhancing their integration into the bilateral preferential trade framework.

2. Elimination or Reduction on Tariffs for Trade in Goods​

Under the UAE–Jordan CEPA, both countries have agreed to adopt the same preferential tariff treatment currently applied under the GAFTA Agreement for originating goods traded between them. As a result, all customs duties on such goods will be eliminated (i.e., 0%) from the date the agreement enters into force (15 May 2025), maintaining goods trade liberalization at levels exceeding 98% of tariff items and covering over 99.5% of UAE exports to Jordan.

However, this tariff elimination does not apply to goods that are prohibited from importation, circulation, or use in either country due to health, religious, environmental, or security reasons, which constitute approximately 2% of tariff items*.

3. Customs and Trade Facilitation​

In alignment with the World Trade Organisation ("WTO"), including its Trade Facilitation Agreement ("TFA"), and the guidelines of the World Customs Organisation ("WCO"), the CEPA introduces measures to facilitate cross-border trade and ensure efficient customs procedures. These include issuing customs rulings prior to import and adopting international best practices in customs management.

Additionally, the CEPA promotes cooperation on customs and trade facilitation through commitments to conclude a mutual administrative assistance agreement for Authorized Economic Operator ("AEO") programs. These arrangements aim to streamline cross-border procedures, enhance supply chain security, and improve risk-based targeting by offering trusted traders reduced inspections and expedited customs clearance.

4. Trade in Services​

Jordan has offered market access to the UAE across broad service sectors, including professional, financial, logistics, maritime, travel and tourism, and air transport services. The agreement also allows for the temporary presence of business visitors and intra-corporate transferees from both countries to supply services in each other’s markets.

5. Additional provisions adopted by CEPA​

Beyond preferential tariff treatment for free zone goods, the agreement includes several other provisions that benefit exporters, importers, and service providers in both countries. These include:​

• Enhanced cooperation on technical barriers to trade ("TBT"), ensuring that technical regulations (e.g., product size, weight, packaging, ingredients, marking, labeling) and conformity assessment procedures (e.g., sampling, testing, inspection, accreditation) are non-discriminatory and do not create unnecessary obstacles to trade.​

• Promotion of trade opportunities for SMEs, including support for digital trade, improved access to information, and collaboration to identify new commercial opportunities.​