US embassy cable - 02AMMAN6517

UNCLAS AMMAN 006517 
 
SIPDIS 
 
STATE FOR E AND EB/CBA - MERMOUD 
STATE PASS USTR FOR NED SAUMS 
COMMERCE FOR 4520/ITA/MAC/ONE/LOBERG 
 
E.O. 12958: N/A 
TAGS: ETRD, EINV, BEXP, IS, JO 
SUBJECT: JORDAN'S QIZ MANAGERS SEEKING CONFERENCE DURING 
FTA JC 
 
REF: A. AMMAN 1892 
     B. AMMAN 5485 
 
1.  (u)  Summary:  Building on U/S Larson's visit to Amman 
last month, QIZ park managers and GOJ officials are proposing 
an investment promotion event to coincide with the December 
11-12 FTA Joint Commission meeting in Washington.  We believe 
such an event could help encourage both new QIZ investment 
and encourage the diversification of Jordan's economy away 
from dependence on Iraq.  We are prepared to assist in 
planning for any such event.  End Summary. 
 
2.  (u)  In the past two weeks, we have been approached by 
QIZ park managers Halim Salfiti (Al Tajammouat), Jack Khayyat 
(Al Dulayl), and Amr Majali (Irbid/Kerak/Aqaba), as well as 
by Jordan Investment Board Director Reem Badran and QIZ 
"forefather" Omar Salah, about the possibility of setting up 
a QIZ-related event to take advantage of the planned FTA 
Joint Commission meeting in Washington in mid December.  They 
picture an event similar in structure and goals to an event 
they attempted unsuccessfully to launch in Jordan earlier 
this year (reftel).  They propose a U.S. Government-hosted 
conference with either CEO's or Sourcing/Buying VP's from 
major U.S. retailers, along with senior representatives from 
the U.S. Association of Importers of Textile and Apparel 
Products (USAITA).  Such an event, they believe, will not 
only encourage more sourcing from Jordan, but will also 
provide the positive PR necessary to coax additional 
third-country investment in the QIZ's. 
 
3.  (u)  As discussed during U/S Larson's visit to Amman and 
Omar Salah's meeting in Washington with DoS Business 
Coordinator Mermoud, such an event would provide a forum to 
address particular concerns U.S. companies have, either as 
buyers or investors, regarding political risk factors in 
Jordan - specifically, how the Intifada and the prospect of 
war in Iraq are affecting QIZ production, and how the GOJ and 
park managers plan to mitigate those impacts.  While a number 
of U.S. retailers are represented in the QIZ's, a number of 
influential companies (notably GAP, Inc. and Victoria's 
Secret) have cited these political risks as a primary reason 
 
SIPDIS 
for withholding orders and investment. 
 
4.  (u)  Minister of Industry and Trade Salah al Bashir, who 
will lead the Jordanian delegation to the Joint Commission, 
supports this initiative.  We continue to believe in the 
concept to encourage and bolster the QIZ initiative, which 
has been successful beyond expectations, but still can make 
greater contributions to Jordan's economic growth (ref b). 
Given the current uncertainties about the economic fallout of 
possible military action in Iraq, such an event would be a 
timely complement to the official JC meetings.  It would also 
provide substantive press coverage for the FTA/JC and real 
business opportunities in the QIZ's.  In particular, QIZ 
managers will be able to pitch major retailers who have been 
reluctant to begin operations in Jordan because of their 
concerns about possible disruptions in supply resulting from 
either coalition activity in Iraq or an exacerbation of the 
Israeli-Palestinian conflict. 
 
5.  (u)  We think a meeting at the State Department chaired 
by U/S Larson and Minister Bashir would be a natural 
follow-up to the Under Secretary's visit to Jordan and would 
provide the pull necessary to bring major garment retailer 
CEO's and/or senior VP's, along with senior representatives 
from USAITA, to the table.  We would be happy to help put 
such a conference together. 
GNEHM