US embassy cable - 04AMMAN4252

UNCLAS SECTION 01 OF 05 AMMAN 004252 
 
SIPDIS 
 
SENSITIVE 
 
USDOC 4520/ITA/MAC/ONE/WIEGLER 
STATE FOR NEA/ARN, EB/CBA 
STATE ALSO FOR EB/TPP/MTA/IPC  P. QUIGLEY AND S. WILSON 
PASS TO USTR  C. NOVELLI AND E. SAUMS 
 
E.O. 12958:  N/A 
TAGS: ETRD, KTIA, KIPR, PREL, JO 
SUBJECT: JORDAN TRADE MINISTRY ON FTA JOINT COMMITTEE AGENDA 
 
REFS: (A)  Schedlbauer-Gnehm-Hale email (05/08/04) 
(B)Amman 2574 
(C)Amman 2494 
 
SENSITIVE BUT UNCLASSIFIED.  PROTECT ACCORDINGLY. FOR USG 
USE ONLY. NOT FOR RELEASE ON THE INTERNET. 
 
1.  This is an action request.  See last para. 
 
2.  (SBU)  SUMMARY:  Ministry of Industry and Trade senior 
officials briefed embassy on the proposed agenda for the 
June 8 Free Trade Agreement Joint Committee meeting (the 
JC). A key change is the GOJ's likely submission of a 
revised list of goods for which they are seeking accelerated 
ted 
tariff reductions; the list may not be ready until soon 
before the JC.  Other new items included a request to 
discuss Non-Agricultural Market Access; and to hear 
presentations from USAID on technical assistance related to 
customs, on overall bilateral assistance, and on trade 
capacity building (particularly in the garments and textiles 
sector).  The GOJ omitted the U.S. Bio-terrorism Act and 
tourism from the proposed agenda.  GOJ counterparts offered 
suggestions for timing on a proposed agenda meeting their 
general agreement on sequence.  The GOJ has not yet informed 
us of details related to its expressed continued interest in 
raising Iraq Reconstruction and also on presenting plans to 
promote investment.  The GOJ requests minutes be made of the 
JC.  We are still awaiting a formal delegation list, but are 
assured that JABA will lead the private sector during a 
proposed lunch.  Embassy requests Washington's concurrence 
with the proposed agenda to submit to DPM Halaiqa for his 
agreement after his return from Morocco on May 30.  END 
SUMMARY. 
 
3. (SBU)  GOJ senior trade officials Amer Hadidi and Maha 
Ali on May 26 concluded discussions begun early May on the 
proposed JC agenda, settling on six general topics they had 
proposed (generally tracking refs A and C).  They 
anticipated a brief ceremonial opening to the JC -- 
expressing the hope that USTR Zoellick would participate - 
but focused their comments on the JC content.  On protocol 
issues, such as deciding who takes the lead on any given 
subject, Hadidi suggested that the JC remain informal, 
allowing the topic at hand to be the guide.  This report 
outlines and explains the proposed agenda according to each 
of the six main points.  (See full proposed agenda, 
including proposed timing, in para 25.) 
 
General Discussion 
------------------ 
 
4.  (SBU) The GOJ believes that a general review by the USTR 
on all FTAs worldwide - including but not limited to Middle 
East FTAS and the proposed MEFTA - would help the GOJ 
J 
better understand its options with the bilateral FTA. 
Having just concluded an FTA with Singapore, for example, 
the GOJ would like to explore possibilities of negotiating a 
new annex or protocol among the three nations that would 
allow accumulation of content on a preferential basis for 
goods jointly produced by Jordan and Singapore. 
 
5.  (SBU)  The GOJ proposes to follow with an update on its 
trade agreements, including the newly concluded Jordan- 
Singapore FTA and the GOJ's amended agreement with Israel 
allowing for a QIZ-like arrangement with the EU. 
 
6.  (SBU)  Hadidi said that the GOJ would lead off on a 
discussion of the end of the Multi-Fiber Agreement and its 
potential effects on Jordan's emerging garments industry. 
The GOJ would expect the USG to respond.  (NOTE:  Hadidi 
mentioned again that A/USTR Cathy Novelli had said last year 
that some future events would probably impact on China's 
potential dominance of the U.S. apparel market in a world 
without quotas.  He hoped the USG presentation would explain 
what else might be in the offing, in addition to safeguards 
measures taken against China in the past few months. END 
NOTE.) 
 
7.  (SBU)  On WTO-related issues, Maha Ali asked for a 
discussion on "WTO Ongoing Negotiations" saying that the 
GOJ would like to raise Non-Agricultural Market Access 
(NAMA), particularly the sectoral initiative as it relates 
to textiles and garments. 
 
8.  (SBU)  As both the U.S. and the GOJ are required to file 
submissions to the WTO on the bilateral FTA, Hadidi said 
that it would be useful for the delegations to agree on how 
to coordinate this work. (USG to lead off.) 
 
9.  (SBU)  On Jordan's GPA submission to the WTO, Ali said 
that if a new, revised entity offer is made in the WTO this 
summer, the multilateral GPA could well solve the GOJ's 
problems with "Buy America" provisions in the U.S.  In the 
meantime, she implied that to satisfy domestic constituents 
the GOJ might ask for a waiver under the FTA of "Buy 
America."  Hadidi asked if the U.S. had ever given such 
waivers.  (Ambassador has made clear to DPM Halaiqa that 
such a waiver was unlikely to be granted.) 
 
U.S.-Jordan FTA 
--------------- 
 
10. (SBU)  Hadidi explained that close to half of the items 
included on Jordan's original list of goods for which it was 
seeking accelerated reduction of tariffs were "subject to 
dismantling."  (Another MOIT sources said that a number of 
listed tariff items were going to be zeroed out in 2005.) 
Given this circumstance, the GOJ was revising its list of 
requested reductions, said Hadidi.  The GOJ hoped to get the 
list to the USG by next week, he said.  At the JC, he would 
expect the GOJ to go through the new list, explaining its 
requests.  Acknowledging that such a request would require 
time-consuming consultations by USTR with U.S. domestic 
constituencies, Hadidi expressed the hope that USTR would at 
least join in a discussion in principle about the items on 
the list. 
 
11.  (SBU)  On rules of origin (ROO), Hadidi explained that 
the GOJ was seeking a brief exchange on the provisions in 
the FTA calling for further bilateral consultations on ROO. 
 DPM Halaiqa and the USG head of delegation might quickly 
give their blessing to such technical talks, he said.  In 
the context of the preferential treatments offered by the 
FTA, the GOJ saw approved side-meetings (held at a later 
time, after the JC) as a way to iron out any additional 
protocols making possible Jordan's accumulation of content 
with "adjacent nations" such as Israel, Iraq and the 
Palestinian Authority (Article 13 of the FTA ROO Protocol) 
and with nations such as Singapore and Morocco. 
 
12.  (SBU)  USTR's proposal to discuss both Jordanian and 
Egyptian QIZs is acceptable to the GOJ.  The GOJ might 
respond briefly, but to date, the Ministry of Trade has 
taken the view that Jordan is a full competitor in the 
global marketplace and would attempt to meet the challenge 
of any Egyptian QIZs.  The GOJ might make reference to 
Jordan's advanced economic reforms and commitment to meet 
international labor standards, but Embassy does not 
contemplate this being a long reply. 
 
FTA Implementation 
------------------ 
 
13.  (SBU)  We propose to cap the morning session with the 
report on the Environmental Forum preparatory meeting 
(embassy environmental HUB's preferred language), which will 
have been held on June 7.  Earlier embassy meetings 
established that GOJ Minister of Environment Alia Bouran 
would make the lead presentation in preparation for a 
proposed JC Environmental Forum in the fall.  Hadidi 
mentioned debt swap as one possible topic, although He was 
uncertain of the details.  (Email traffic between embassy 
and State Bureau of Oceans, Environmental and Scientific 
Affairs lays out the plan for this session.) 
 
Luncheon 
-------- 
 
14.  (SBU)  Embassy has passed JABA contact information to 
USTR to follow up the lunch hosted by the U.S-Jordan 
Business Alliance.  Embassy Commercial Section is in contact 
with the Department of Commerce to add two U.S. 
representatives from sectors affected by DAMAN, possibly 
from the U.S. automotive and IT sectors.  MOIT has asked 
that JABA be in the lead for the GOJ private sector at the 
lunch, so that there is no confusion with the separate trade 
delegation going on to Chicago.  JABA may raise some of the 
issues already part of the JC agenda, such as E1/E2 visas 
and participation by Jordanian manufacturers in the Customs- 
Trade Partnership Against Terrorism (C-TPAT), mindful not to 
have needless repetition.  JABA may raise the DAMAN program 
from the point of view of importers and may also discuss its 
leading role as the home of the "FTA Unit" (an information 
and consulting center to assist importers and exporters 
effectively use the FTA, based at JABA but funded by 
multiple Jordanian industrial and commercial associations as 
well as USAID).  If the U.S. Bio-Terrorism Act comes up at 
all, this might be the venue, as one Jordanian company lost 
its food shipment over Christmas and believes the new 
regulations may have been partially responsible.  Although 
JABA will just have concluded elections, current Chairman 
Azzam Schweihat is slated to lead the GOJ's JC private 
sector delegation, accompanied by and Rose Al-Issi, CEO of 
JABA.  Also attending will be Mr. Samer Asfour of the Amman 
World Trade Center;  Ms. Hanan Sboul, Secretary General of 
the Jordan Association of Manufacturers of Pharmaceuticals 
and Medical Appliances (JAPM); and Mr. Jad Makdah, President 
of CJC shirt manufacturers and a board member of the Amman 
Chamber of Industry. 
 
FTA Implementation 
------------------ 
 
15. (SBU)  Under the Customs heading, we propose to discuss 
the current levels of customs technical assistance funded by 
USAID through the AMIR program, including good work on risk- 
based assessment of imports.  This would lead into a 
discussion of the DAMAN program.  Dr. Ahmad Hindawi, the 
Jordan Institute of Standards director who runs DAMAN, will 
be part of the GOJ delegation.  (On June 3, JABA will hold a 
needs assessment on DAMAN with the private sector, in 
preparation for its own domestic advocacy against certain 
problem areas of the pre-shipment inspection program.) 
 
16.  (SBU)  The GOJ is prepared to make brief presentations 
on labor issues and to answer questions posed about the 
situation, especially in the QIZs.  The Ministry of Labor 
worked on the USDOL-funded projects led by ILO;  an MOIT 
delegate may review information provided by Jordan's MOL on 
the child labor program. 
 
17.  (SBU)  A MOIT official will talk about Jordan's 
internet treaties accessions and plans for patents and 
trademarks treaties and protocols and will also likely brief 
on copyright law amendments.  The GOJ would expect a USG 
response and/or questions. The GOJ proposes that the USG 
lead on IPR enforcement efforts, citing our specific 
concerns, to which the GOJ would respond.  Embassy 
recommends a sub-topic on protections for pharmaceuticals 
(which the GOJ is prepared to discuss, if we take the lead). 
 We are still consulting with PhRMA on Jordan's  narrow, 12- 
month window for drug patent registrations and on the 
FosaMax drug copy case.  (NOTE:  Jordan hosts a WIPO 
conference on IPR June 1-3, to be attended by Susan Finston 
of PhRMA's Washington office.) 
 
18.  (SBU)  The E1/E2 treaty trader/investor visa appears to 
be a soluble problem (nor has it been a source of friction). 
 Embassy has confirmed that Jordan presently is issuing an 
equivalent, renewable visa valid for 12 months, multiple 
entries.  Upon Department authorization, U.S. visa-issuing 
posts would be able to issue E1/E2 visas of the same 
validity and entries as an interim solution.  Further, we 
believe that there is sufficient political will on the GOJ 
side to explore eventually making this a five-year, 
multiple-entry visa on a reciprocal basis, in accordance 
with Department standards.  We believe at least one large 
exporter will apply for this visa. 
 
Reconstruction of Iraq 
----------------------- 
 
19.  (SBU)  DPM Halaiqa reportedly expressed a tentative 
interest in the reconstruction of Iraq.  The MOIT could not 
give us any particulars and will discuss further with the 
DPM.  If the agenda item remains without further 
elaboration, the MOIT said they would expect the USG-led 
discussion to be brief, unless there were significant new 
developments.  (NOTE:  If the FTA Implementation session 
goes long in the afternoon, we could make up time here.) 
 
Technical Cooperation 
--------------------- 
 
20.  (SBU)  The GOJ has requested presentations from the USG 
on various aspects of the bilateral assistance program, most 
particularly as it affects trade capacity building, and 
especially in the garments sector.  The USAID mission plans 
to send a representative to make the presentation to the JC. 
The GOJ cabinet recently approved Jordan's national strategy 
for the textiles and garments sector and Jordan wants to 
enhance trade facilitation in this area.  (COMMENT:  This is 
designed to be another opportunity for the GOJ to make known 
its assistance needs.  We were told the Jordan Investment 
Board might make a pitch and that the GOJ might pass on a 
Customs Department request for technical assistance related 
to rules of origin. END COMMENT.) 
 
Other Issues 
------------ 
21.  (SBU) Jordan is prepared to respond to our concerns 
about bans on certain food imports.  Embassy advised that 
our concern about shelf life was to seek a briefing on the 
status of implementation of WTO-compliant rules and 
regulations. (NOTE: If still a concern, MOIT requests us to 
provide in advance specifics on the issues.)  Based on 
advice received from the USAID AMIR program, the MOIT is 
expressing renewed interest in a double taxation treaty. 
DPM Halaiqa would like a further briefing if the GOJ would 
not have to divulge as much information as originally 
thought.  The U.S.-Turkey tax treaty, Article 26, was cited 
as an example of a potentially feasible agreement.  Reem 
Badran of the Jordan Investment Board may make a 
presentation on investment;  MOIT is checking further on 
this. 
 
22.  (SBU)  Petra Engineering, which ships over 500 
containers to the U.S. per year would like to take part in 
the C-TPAT program, facilitating speedy entry to containers 
for vetted, secure companies.  We explained to GOJ 
counterparts that this is a by-invitation-only arrangement 
run by USDHS Customs and Border Protection.  The GOJ would 
like to learn more about the program and seek assistance to 
get Petra a place at the C-TPAT table. 
 
Dropped Topics 
-------------- 
 
23. (SBU)  The U.S. Bio-terrorism Act and tourism in Jordan 
were not raised again by the MOIT.  They did not express an 
interest in pursuing these topics. 
 
Logistics 
---------- 
 
24.  (SBU)  When the MOIT responds with a final list of 
delegates, Embassy will fax it to the Department.  An 
invitation to the JC, citing venue would be welcomed by the 
GOJ, as would any additional information on the proposed 
luncheon.  Embassy plans to send the DCM, USAID Economic 
Opportunities Office Director, and Economic Officer to 
attend the JC.  MOIT's Hadidi and Ali expressed an interest 
in having formal minutes for the JC meeting.  Hadidi 
recalled that there were no minutes from the December 2002 
JC, and this gap was remarked upon by officials back home. 
It is a regular GOJ practice to have minutes for official 
meetings, he added.  (COMMENT:  If USTR agrees, Embassy 
recommends the USG supply professional-level transcription 
for the JC, obtaining agreement in advance that the 
resultant product would be "informal minutes."  Although 
an additional resource demand, arranging these informal 
minutes would enable us to resolve any differences of view 
regarding the outcome of the JC.  END COMMENT.) 
 
Proposed Agenda 
--------------- 
 
25. (U)  BEGIN TEXT OF PROPOSED AGENDA 
 
NOTE:  Following each item is lead presenter (and follow-on, 
as appropriate), as tentatively agreed with the GOJ. 
 
MORNING SESSION 
 
1. GENERAL DISCUSSION (1 hour) 
--  Status of U.S. FTA's worldwide, including in ME 
         and MEFTA - USG 
--  Update on Jordan's Trade Agreements and related economic 
developments - GOJ 
--  The MFA and the future of the world textiles and 
garments trade  GOJ, USG 
--  WTO-related issues 
   - WTO ongoing negotiations  GOJ, USG 
   - Discussion on coordinating submissions on FTA to 
       WTO - USG, GOJ 
   - Brief on Jordan's GPA submission to WTO - GOJ 
 
 
2. THE U.S.-JORDAN FTA (1 hour) 
--  Jordan's revised request to accelerate tariff reductions 
under FTA - GOJ, USG 
--  Brief discussion of rules of origin and accumulation of 
content - GOJ, USG 
-- QIZ's - USG, GOJ 
 
3.  FTA IMPLEMENTATION (= hour) 
--  Environment  report of USG/GOJ Environmental Forum 
preparatory meeting  GOJ, USG 
 
 
LUNCH  (1 = hours) 
-- Hosted by U.S.-Jordan Business Alliance with private 
ate 
sector participants 
-- During last half hour, a moderator will lead discussion 
with private sector 
   - Each private sector head will give a very brief 
presentation 
-Moderator to oversee Q&A between private sectors and 
        governments 
 
AFTERNOON SESSION 
 
3. FTA IMPLEMENTATION (continued) (1 hour) 
-- Customs (USG, GOJ) 
   - Technical assistance to Jordan  USG, GOJ 
   - DAMAN pre-shipment inspection program  USG, GOJ 
--  Labor 
   - Labor issues in QIZs  GOJ, USG 
   - Status of MOL/ILO projects in Jordan  GOJ, USG 
--  IPR 
   - Legal framework, including convention and treaty 
     obligations  GOJ, USG 
   - Jordanian copyright law amendments  GOJ, USG 
   - Enforcement efforts  USG, GOJ 
   - Protections for pharmaceuticals  USG, GOJ 
-- E1/E2 Treaty Trader/Investor visas  USG, GOJ 
 
 
4. RECONSTRUCTION OF IRAQ 
(tentative; GOJ to add subtopics) (= hour) 
--  Access to Iraqi market - USG 
 
 
5. TECHNICAL COOPERATION (= hour) 
-- Overall bilateral assistance program - USG 
ram - USG 
-- USAID's trade facilitation program USG, GOJ 
-- Assistance to facilitate trade in garments and 
      textiles  GOJ, USG 
 
 
6. OTHER ISSUES (= hour) 
-- Agriculture 
   - GOJ's BSE ban (beef) and avian influenza 
        ban (chicken)  USG, GOJ 
   - Implementation of WTO-compliant shelf life regulations 
        for foods  USG, GOJ 
-- Double taxation  GOJ, USG 
-- Investment  GOJ (tentative) 
-- Private Sector Issues 
   - CTPAT program participation for Jordanian manufacturing 
        firms - USG, GOJ 
 
 
26.  (SBU)  ACTION REQUEST:  Embassy requests Department's 
concurrence with a final proposed JC agenda to pass to the 
Government of Jordan to seek DPM Halaiqa's final agreement 
after his return from Morocco on Sunday, May 30. 
 
GNEHM 
GNEHM