Globalization: Threat or Opportunity?
Globalization, variation and Increasing demand on products and services has encouraged a lot of companies, large and small, to implement policies and strategies into their businesses plans to sustain and protect themselves against competitors. Especially those, foreign competitors. Also to give them the ability and power to get in the global competition.
In Jordan there are many policies and strategies that local companies adopted it to success both internally and externally. The business owners have the responsibility to protect their companies and their personal assets by using these policies and strategic plans to be well on a way to hassle-free future.
When Jordan became a member of the World Trade Organization (WTO) on 11/4/2000, which resulted in many structural changes, such as creation of the National Production Protection Directorate in the Ministry of Industry and Trade to be the qualified authority to implement the WTO agreements on protection. In the same ministry there are Directorate of Foreign Trade Policies which is responsible to follow-up to the international trade and economic agreements and bilateral trade agreements between Jordan and other countries, monitoring and developing it to the strengthening of the Jordanian economy and its development.
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Policies that protect and support the local companies in Jordan
The Anti-Dumping is one of the trade treatments offered by the World Trade Organization (WTO) to member to dealing with harmful and unfair trade pursuit. The National Production Protection Directorate in the Jordanian Ministry of Industry and Trade works through legislation to protect the national production represented by the Law of Protection of National Production No. 21 of 2004 and the Anti-Dumping and Subsidies Law No. 26 of 2003 to provide protection to local producers who suffer from the damage caused by the importation of the prices by means of appropriate measures to protect them.
Dumping occurs when foreign manufacturers export their products to the Hashemite Kingdom at prices below their normal value (the price of selling these products in their local market). If the export price is below the normal value after making the necessary settlement, the dumping will be fact. The settlement are intended to compare the export price with the normal value at the same trade level, which is usually the sale price of the manufactory door (product) in the country of export.
As a solution to combat the dumping of the market and to protect it, there are some elements are required, for example, the presence of a local industry producing a commodity similar to the commodity being imported, also the occurrence of dumping, provided that the margin of dumping is not less than 2% , the occurrence of an increase in imports that are totally or relatively in comparison to domestic production (provided imports are not marginal) and be sure that damage or threat of damage to local producers. Finally, causal link between damage to local producers and the increase in dumped imports, which manes the main cause of damage is increased imports.
Subsidies and Countervailing Measures is one of the techniques that (WTO) has provided to Member States to address harmful practices in trade. Its aims to prevent governments from using subsidies that have negative effects on international trade, the adoption of policies to support industrial production in particular, Supported and prohibited forms of support.
The concept of support is the financial contribution provided by the government or a public body in the state with the benefit of the subsidy granted, where the benefit arises by receiving the recipient financial contribution better than the conditions prevailing in the market.
“National Production Protection Directorate, Jordanian Ministry of Industry and Trade website”
For example, the Jordanian Agricultural Credit Corporation, support Jordanian farmers to meet seasonal agricultural circumstances.
Product Diversity, there are a large number of local businesses, each one chooses products, not on a national sales plan, but on their own interests and the needs of their local customers, so there are a huge range of product choices. “Mitchell, 2012”
Replacement of the local product as an alternative to the imported product to existing industrial companies, where many raw materials or intermediate products are imported from outside the Kingdom despite the possibility of Jordanian factories capable of producing those materials and / or need a little support to be able to produce and supply them . Which means that we are not needed to the importation.
Encouraging national industries and increasing their competitiveness by raising their administrative and productive capacities and helping them acquire modern technologies that contribute to the production of modern high quality products, reduce energy consumption, reduce production costs and compete with products of other countries.
The process of expanding business opportunities through additional market potential of an existing product. Broadening might be accomplished by going into extra markets. Regularly the item might be enhanced, modified or changed, or new advertising exercises are created, which implies unexpected to the importation, and chipping away at a neighborhood item by expanding the nearby network trust and mindfulness.
Provincial Development Fund supports projects in governorates of the Kingdom in addition to the establishment of an industrial city in all governorates of the Kingdom. Granting facilities on industrial lands in remote industrial areas to support local projects. Safeguarding assigned industrial grounds for industrial uses. The Plan recognizes that industrial zoned land provides a safe haven for industrial businesses where their operations are less likely to impinge on other. we can measure that as a kind of supporting and protection policies.
The development of an electronic database to enhance and enable national networking opportunities to make local partnerships. Studies have demonstrated the need to develop this rule because SMEs are not aware of the opportunities for linkages with large firms, nor are large companies aware of backward linkages opportunities with local suppliers.
To promote the national linkages program to raise awareness about the importance of local partnership and its impact on competitiveness and increase profits, as well as creating investment opportunities to develop new products.
Industries are fundamentally based and largely to the concept (time economics) where governments provide protection for enterprises /emerging industries that have high value from the point of view of the community.
Governments provide protection while emphasizing that the protection provided to these institutions or industries is temporary. It will not last forever, but will rise at some point in the future because this protection is provided (whether it is maintenance or an expense). Therefore, it is the right of the community to generate revenue on its own socially is an investment. Investment, mostly in the form of taxes (future) or lower prices.
And to developed countries, but also to developed countries protection of emerging industries is not limited to protection in developed countries, high-value industries, such as computer and aeronautical industries and research projects, are offered and development. It must be remembered that providing cash support to protect high value-added industries is the best solution compared to the imposition of customs duties in a small market and open such as Jordan does not create distortions on the production or consumption side.
However, for easy collection of fees If the institution, industry or sector, and specifically intended to support popular acceptance. So the provision of cash support is not the case in part for foreigners, customs duties are used instead of cash support. Of the policies adopted to support the local industries, directives of the Jordanian Prime Minister to public sector institutions and oblige them not to resort to buying any non-domestic products and dealing exclusively with local products.
There is also a system imposed by the Jordanian Investment Authority to regulate foreign investment, where certain ratios were imposed for the volume of investments in each sector separately and that the share of the Jordanian investor is more than 60% of the size of the capital.