US embassy cable - 05AMMAN2850

UNCLAS SECTION 01 OF 02 AMMAN 002850 
 
SIPDIS 
 
SENSITIVE 
 
STATE PASS TO USTR 
 
E.O. 12958: N/A 
TAGS: ETRD, PREL, KTIA, JO 
SUBJECT: JORDAN AGREES TO POSITIVE STEPS TO FACILITATE 
TRADE, LIMIT DAMAN PROGRAM 
 
REF: 04 USDOC 05774 
 
 SENSITIVE BUT UNCLASSIFIED.  FOR USG USE ONLY. 
 
1.  (SBU)  SUMMARY:  In a call on Minister of Industry and 
Trade Ahmad Hindawi April 4, Commerce Assistant Secretary 
William Lash was briefed on Jordan's latest positive 
responses to USG concerns (reftel) regarding trade barriers 
created by Jordan's DAMAN product conformity program. 
Hindawi promised to implement suppliers' declarations of 
conformity and to use a risk assessment system at the border, 
in lieu of the current intensive pre-shipment or border 
inspections of imports into Jordan.  A/S Lash welcomed these 
responses, and praised Jordan for its fast-growing trade 
under Qualifying Industrial Zone (QIZ) agreement with Israel 
and the U.S., as well as the bilateral Free Trade Agreement 
(FTA).  Lash also noted progress made by Jordan on 
intellectual property rights and urged even more IPR law 
enforcement to enhance Jordan's reputation for building a 
knowledge-based economy attractive to foreign investors. 
Both officials expressed amazement at the large turnout for 
the Rebuild Iraq 2005 exhibition held in Amman April 4-7, 
which has given Amman some of its highest hotel occupancy 
rates in the last few years.  END SUMMARY. 
 
GOJ Reminder on Tariff Reduction Acceleration 
--------------------------------------------- 
 
2.  (SBU)  In a brief meeting at the Ministry of Industry and 
Trade during a break in the Rebuild Iraq 2005 trade show, 
Hindawi said that while the bilateral trade relationship had 
its issues, overall trade was booming and there was hope for 
continued growth in the future.  He reminded A/S Lash of 
Jordan's outstanding requests for the acceleration of tariff 
reductions under the FTA and its call for a review of the 
Israel-Jordan QIZ arrangement so that it is more nearly 
equivalent to the Israel-Egypt QIZ agreement signed last 
December 10.  At the same time, Hindawi noted that Jordanian 
QIZs would continue to improve their competitiveness and seek 
to produce more "high-end" and niche products than Egypt 
could.  A/S Lash noted that the USTR was handling the GOJ's 
requests on trade.  He also praised Jordan for its 
competitive strategy and encouraged Jordan to diversify its 
productive capacity away from garments, especially in the 
wake of the end of the Multi-Fibre Arrangement. 
 
Two Positive Steps on DAMAN 
--------------------------- 
 
3.  (SBU)  Hindawi launched without prompting into his 
government's response to expressed U.S. concerns (reftel) 
regarding trade inhibiting pre-shipment inspection regimes 
connected with the DAMAN product conformity program.  He said 
that, based on concerns outlined in Charge's January 9 
demarche on DAMAN, the GOJ had agreed in principle to 
recognize Suppliers' Declaration of Conformity (SDOC) to 
standards.  A second step would be the implementation next 
month of a risk assessment system at Jordan's borders that 
would take into account the low risk associated with certain 
countries of product origin (NOTE:  To date, no U.S.-origin 
products have registered in the monitoring system run by the 
French contractor Bureau Veritas under a contract with the 
Jordan Institute of Standards and Metrology (JISM), hence the 
risk is zero.  END NOTE.)  Earlier, Jordan had devised a risk 
system to include factors such as product, importer, and 
exporter but not country of origin.  He said the GOJ was 
making a commitment to this new effort to allow products into 
the market;  after importation they could be inspected.  In a 
conversation on the margins of the meeting, JISM Director 
General Yaseen Khayyat told Emboff that the details of these 
two new initiatives had not been worked out, promising to 
provide them as they became available.  But Hindawi 
emphasized the decisions had been made. 
 
4.  (SBU)  Lash expressed appreciation for the GOJ's 
willingness to solve mutual problems, including the growing 
U.S. trade deficit with Jordan.  Noting Jordan's lack of 
standards labs, and low human capacity, Hindawi appealed for 
U.S. technical assistance to raise JISM's overall performance 
and to create in Jordan a legal liability system that it was 
virtually lacking.  A/S Lash mentioned assistance from such 
groups as the American Trial Lawyers Association (ATLA). 
Post will follow up with JISM to obtain their wish-list of 
potential assistance needs. 
 
IPR 
--- 
 
5.  (SBU)  A/S Lash noted Jordan has made great progress on 
IPR, pointing to its newly amended Copyright Law (NOTE:  now 
the law of the land as of March 31, to be reported septel). 
Enforcement was just as important as the laws, said A/S Lash, 
and as Jordan increased productivity and gained jobs through 
a knowledge-based economy, these types of legal reforms would 
attract investors who had confidence in the system.  He urged 
the GOJ to continue this positive trend.  Dr. Hindawi said 
that the GOJ was doing what it could to move forward on IPR. 
 
6.  (SBU)  The Rebuild Iraq 2005 exhibition was so big, said 
Hindawi, that he had to spend two hours going through it at a 
fast walk, without stopping.  A/S Lash replied that this kind 
of success showed how important Jordan was as a gateway to 
Iraq.  (NOTE:  Hotel occupancy rates were at near-record 
highs during the exhibition, with at least one Hotel boasting 
98 percent occupancy.  Finding a hotel room became nearly 
impossible for late-comers.)  Both noted in particular the 
impressive turnout of Iraqi business people. 
 
7.  (SBU)  COMMENT:  These two proposals are a good step 
forward and a positive response to reftel demarche, but the 
proof will be in the pudding.  Post will look into the 
details of the risk assessment and SDOC initiatives and 
follow up as needed. 
HALE