US embassy cable - 03AMMAN6961

UNCLAS SECTION 01 OF 03 AMMAN 006961 
 
SIPDIS 
 
SENSITIVE 
 
USDOC FOR ITA/MAC/MWILLIAMSON 
USDOC FOR ITA/MAC/ONE/PTHANOS 
USTR FOR NED SAUMS 
 
E.O. 12958: N/A 
TAGS: ETRD, PREL, IZ, JO, EFTA 
SUBJECT: AJEX EXPO 2003 SELLS JORDAN AS GATEWAY TO IRAQ AND 
REGION; KEEPS UP BUZZ ON JORDAN'S QIZ AND FTA ACCESS TO 
U.S. MARKET 
 
 
SENSITIVE BUT UNCLASSIFIED.  HANDLE ACCORDINGLY. 
 
1.  (SBU)   SUMMARY.  The American Jordanian EXPO 2003 drew 
900 participants to its opening plenary on October 22, 
focused on the Iraq transit trade, and pitched Jordan as the 
"gateway" to Iraq and other markets in the region.  Sessions 
on the U.S.-Jordan Free Trade Agreement and qualifying 
industrial zones (QIZs) put the spotlight on Jordan as a 
platform to export to the U.S.  Lead speakers from the United 
States included Department of Commerce DAS Molly Williamson 
and Ambassador Gnehm.  Sir Jeremy Greenstock, representing 
CPA, spoke on "Iraq for the Iraqis" to a rapt, 
standing-room-only audience.  The conference-exhibition 
featured 52 trade booths selling products from the U.S. and 
Jordan, but also included businesses from Iraq seeking trade 
or investment.  As a vehicle for more private sector focus on 
Iraq, AJEX was a success, drawing participants from China, 
Russia, Canada, Europe, and South Africa.  As a venue to 
pitch Jordan and its American FTA advantages, including 
American products now competitively priced in Jordan, AJEX 
got mixed reviews.  Jordanian officials know how to "stay on 
message", but the message may need a re-write or a few new 
messengers.  Aside from a few high-level speakers, the 
American representation at AJEX lacked depth.  If AJEX is to 
survive into a third year as evidence of U.S. support for 
Jordan's economic reform agenda and path to export-led 
growth, more Americans, including officials, will have to 
show up next time.  END SUMMARY. 
 
Many Parts, Including a Talk on Iraq for the Iraqis 
--------------------------------------------- ------ 
 
2.  (U)  AJEX kicked off the evening of October 21 with a 
reception sponsored by the Embassy and JABA, the American 
Chamber of Commerce in Jordan.  Some 100 speakers and guests 
heard the Ambassador preview the conference, and introduce 
key American guests.  The Ambassador took the opportunity to 
spotlight American products to be exhibited at the show, 
noting that more U.S.-made consumer goods were more widely 
available in Jordan at reasonable prices, thanks to the FTA. 
 
3.  (U)  The Oct. 22-23 conference saw three panels on trade 
and investment in Jordan as an access point to the U.S. and 
other markets, three panels on Iraq and Jordan as a gateway 
to this opening market, and a more general panel discussion 
on outsourcing in Jordan. 
 
4.  (SBU)  Jeremy Greenstock's keynote address on "Iraq for 
the Iraqis" held the packed room spellbound for 45 minutes 
with a recitation on CPA goals in Iraq, what would be 
required to make Iraq truly a country led by and for Iraqis, 
the current security situation and prospects for improvement, 
along with factors business-persons might weigh as they 
considered getting into Iraq.  Greenstock opened the 
on-background remarks with a discussion of UNSC 1511 and an 
initial goal of delivering Iraq back to the Iraqis within 
2004.  He said that the basic steps included writing a 
constitution and holding a constitutional referendum, 
followed by elections and a new government taking over. 
There were variations on this basic scheme, he averred, and 
variations on timing.  He also noted that the enemies of a 
reformed Iraq were ever-present and not to be treated 
lightly, but that the Iraqi people were coming to realize the 
true nature of these enemies.  Noting that the security 
situation could be represented by a jagged line upward, 
Greenstock asked businesses to make a calculation weighing 
the need to get into the market early versus some security 
risk.  He noted that Iraqis would give no credit to 
"fair-weather friends" and urged an attitude of confidence in 
the future tinged by realism about the present.  Once 
businesses entered Iraq in numbers, he concluded, it would do 
Iraq a power of good, and eventually lead to many more 
positive developments and to business success. 
 
A Networking Part 
----------------- 
 
5.  (U)  Networking sessions and the trade exhibits promoted 
discussions among Iraqi businesses and authorities and 
potential trading partners and investors. CPA authorities 
were part of panels on accessing the Iraqi market, Iraq's 
economic and legal institutions, and Iraq's business climate. 
 CPA contracting officials and other CPA officials were 
heavily booked during these break-out sessions. 
 
Parts for Jordanian Officials 
----------------------------- 
 
6.  (U)  Speaking on behalf of King Abdullah II, Deputy Prime 
Minister Mohammad Halaiqa highlighted the "New Jordan":  a 
meeting place in the region, a gateway to the region's 
markets, and a place for ideas to flourish.  He noted the 
heavy regime of economic reforms the nation had undergone in 
the years before and since WTO accession in 2000, and the key 
role the private sector now played in partnership with the 
government.  Echoing the king's words, Halaiqa said that now 
Jordan must "deliver and perform" on its promise.  There was 
"more to do" he said to make Jordan a more prosperous and 
progressive place to do business.  Other GOJ speakers spoke 
of Jordan's attractive Qualifying Industrial Zones, which 
with Israeli content qualified for duty-free and quota-free 
access to the U.S. market.  Other GOJ officials outlined the 
QIZ success story to date (from zero exports in 1997 to a 
projected $500 million in exports to the U.S. in 2003), and 
how QIZs and the new Aqaba Special Economic Zone are set up. 
 
A Part for American Officials 
------------------------------ 
 
7.  (U)  Commerce DAS Williamson hailed Jordan's "tremendous 
flowering" as the first Arab country with an FTA.  Jordan's 
steady economic growth and its transparency and 
competitiveness make it a leader in the region.  Jordan's 
progress also reflects hope for a new era in the region and a 
new relationship with the U.S., she said.  DAS Williamson 
reprised the goals of the Middle East Partnership Initiative 
(MEPI), for which Jordan could be held up as a model.  New 
FTAs in the region would be harmonious and compatible, she 
said.  She praised Jordan's growth in the bilateral 
relationship.  Ambassador Gnehm in closing remarks reviewed 
the bilateral trade relationship, including strong growth in 
non-QIZ trade which may reach $100 million in 2003.  He 
reviewed other aspects of a deepening and widening 
relationship, from FMF and IMET in mil-to-mil ties, to 
Fulbright exchanges and cultural programs, to cooperation on 
counter-terrorism issues. 
 
But A Conference Less than the Sum of its Parts 
------------------------------------------- 
 
8.  (SBU)  COMMENT:  Despite its success in promoting private 
sector participation in Iraq -- or perhaps because of it -- 
the AJEX conference was less successful in getting across 
Jordan's basic appeal as a place to invest for the long term. 
 The two messages are fundamentally different: Iraq's appeal 
is as a potentially high payoff (and high risk) market; 
Jordan's advantage is as a reformed, market-oriented economy 
with access to regional Arab markets, unique QIZ and FTA 
access to the U.S. market, and proximity to Europe.  AJEX 
promoters went all out to attract American participation, 
including with letters to key U.S. CEOs from the Royal Court. 
 The response was disappointing.  A competing 
Jordan-sponsored event in Washington the week before no doubt 
deflected would-be travellers.  Potential U.S. participants, 
including officials, will have to show more support if AJEX 
is to survive into a third year. 
GNEHM