The consultant performed a benchmarking study to assess the strategic positioning of the Jordanian garment sector measured against regional and international markets.  This study enabled the consultant to conduct a SWOT analysis, which will be considered as the base for drafting the appropriate recommendations. 

The findings from the international market analysis indicate that the EU and the USA are the highest importers of apparel manufactured in developing countries. Hence the consultant considers Jordan to have an advantage due to the trade agreements existing with the latter countries.  The agreements allow products manufactured in Jordan to enter the EU and the USA duty and quota free under the Association Agreement signed with the EU and the QIZ/FTA agreements signed with the USA.

This trend equally applies on imports of Israel and the Gulf countries where Jordan could or has already promoted bilateral free trade agreements covering the garment sector.

Markets targeted for export development are:

·         The USA and the EU countries,

·         The Gulf Countries and Israel provided that bilateral free trade agreement include tax exemptions on garments.

The global trend in the delocalisation of labour intensive production processes is evident in the EU and the USA.  This delocalisation creates a demand on developing countries to play the role of production suppliers. This is also evident in Singapore, Korea and Israel where production prices are sharply increasing, confirming the trend of delocalisation of production from these countries to lower labour-cost countries. Singapore, Korea and Israel have, in recent years, witnessed sharp increase in labour costs (monthly salary in these countries is higher than USD 1000).

The clothing industry’s shift to delocalisation can be mainly attributed to the labour- intensive nature of the industry, and the comparative disadvantage of most northern EU countries in terms of labour cost. Thus Jordan’s foreign investment promotion policies should consider the garment sector and the related trend in delocalisation as a major opportunity for attracting foreign investments.

Target countries for foreign investment promotion are those experiencing delocalisation such as: EU, USA, the Gulf countries, Israel, South Korea, Taiwan, Hong Kong, and Singapore.

Leading exporting countries to EU market are: Low-cost, medium-distance countries supplying medium fashion products, sometimes made as OPT like Turkey, Morocco, Tunisia, and Eastern Europe (Romania, Hungary, Bulgaria, Czech Republic and Poland), and low-labour cost, far-distance countries such as China and India.

Leading exporting countries to the USA market are: Mexico, China, South Korea, Taiwan and Hong Kong.

As a first stage and over the coming four to five years Jordan garment manufacturing industry should benefit from the QIZ/FTA agreements signed with the USA, and the Association Agreement signed with the EU to promote exports and foreign investments.

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