US embassy cable - 03AMMAN6178

UNCLAS AMMAN 006178 
 
SIPDIS 
 
SENSITIVE 
 
USTR FOR SAUMS 
USDOC 4520/ITA/MAC/ONE/PTHANOS 
TREASURY FOR ABIGAIL DEMOPULOS 
 
E.O. 12958: N/A 
TAGS: ETRD, EFIN, ETTC, IZ, JO 
SUBJECT: JORDAN'S EXPORTS TO IRAQ EXCEED TRADITIONAL 
PRE-WAR LEVELS, BUT NOT AT PREFERENTIAL ACCESS LEVELS OF 
2001-2002 
 
REF: AMMAN 00106 
 
SENSITIVE BUT UNCLASSIFIED.  PROTECT ACCORDINGLY. 
 
1.  (U)   A Ministry of Industry and Trade (MOIT) source 
provided embassy with  the latest summary of Jordanian export 
statistics to Iraq showing a strong  rebound in the 
wide-ranging trade to levels in excess of those in the 
1995-2000  period.  Amer al-Hadidi, MOIT Director of 
Industrial Development reported that  the export of Jordanian 
products to Iraq reached 93 million Jordanian Dinars  (JD) 
(USD 131 million) during the five-month period between April 
20 and  September 23.  The MOIT focused on the period after 
major hostilities had  ceased.  By comparison, in the first 
two months of 2003, Jordanian exports to  Iraq were at 36.6 
million JD (USD 51.7 million). Al-Hadidi stated that goods 
must have at least 40 percent value added in Jordan to 
qualify as national  exports.  UN-sponsored Oil for Food 
Program (OFF) items are considered  "re-exports"--as are 
items being shipped in the heavy transit trade now going 
through Aqaba to Iraq--and are not included in these 
statistics. 
 
2.  (SBU)  At an average of USD 26.2 million per month, these 
new export  figures exceed the comparable figure in 1995-2000 
of about USD 14 million a  month.  In 2001, Jordan's exports 
to Iraq took off (reftel), when the value of  goods exported 
to Iraq topped out at USD 422 million for the year. 
Al-Hadidi  reported that, in 2002, Jordan exported 311.9 
million JD (USD 440 million) in  goods to Iraq, or an average 
of USD 36.6 million a month. 
 
3.  (SBU)  COMMENT:  Jordan's preferential access to Iraq in 
2001-2002 was part  of the former Iraqi regime's efforts to 
cultivate economic dependence among  Jordanian industries in 
what appeared to be an effort to gain influence and  reap 
political benefits.  That trade connection has disappeared 
and, although  we do not yet have product breakouts, the 
traditional Jordanian exports to Iraq  under the former oil 
for goods protocol are not participating in post-war  export 
flows.  Al-Hadidi said most of the recent gains were from 
consumer  products, particularly alcohol and tobacco.  These 
new trade figures  demonstrate the advantage Jordan has from 
its proximity to and experience in  the Iraq market. 
 
4.  (U) Baghdad minimize considered. 
GNEHM