US embassy cable - 03AMMAN4185

C O N F I D E N T I A L SECTION 01 OF 02 AMMAN 004185 
 
SIPDIS 
 
SENSITIVE 
 
STATE PASS USTR FOR CATHY NOVELLI 
USDOC FOR 4520/ITA/MAC/ONE/DAS WILLIAMSON 
 
E.O. 12958: DECL: 07/07/2013 
TAGS: ETRD, PREL, SN, JO 
SUBJECT: JORDAN/SINGAPORE:  US FTA PARTNERS LINK UP? 
 
 
Classified By: Ambassador Edward W. Gnehm, reasons 1.5 (b,d) 
 
1.  (u)  This is a joint Embassy Singapor/Embassy Amman cable. 
 
2.  (sbu)  Summary:  Singapore Trade Minister George Yeo 
passed King Abdullah a letter from Prime Minister Goh Chok 
Yong on the margins of the World Economic Forum proposing a 
Free Trade Agreement between Jordan and Singapore. 
Jordanian officials have been warmly receptive to the 
proposal, which they see as offering future opportunities for 
cooperation in a diverse range of economic sectors, from 
textiles to tourism to info tech.   Singapore trade officials 
say an FTA with Jordan can support liberalization efforts in 
the Middle East.   Another, unstated, objective may be to 
reassure Singapore's Muslim minority of the government's 
concern for their middle eastern co-religionists, especially 
after Singapore's public endorsement of Operation Iraqi 
Freedom.   In the short term, the effects of any FTA will 
probably be modest, as trade between the two countries 
currently stands at only about $26 million.   Singapore has 
completed or is negotiating bilateral FTAs with a diverse 
range of countries, including Japan, New Zealand, Australia, 
the European Free Trade Association, the US, Mexico, Canada, 
India, and Chile.  End summary. 
 
3.  (u)  In an audience with King Abdullah on the margins of 
the Dead Sea World Economic Forum June 23, Singapore Trade 
Minister George Yeo presented a letter from Singapore's PM 
Goh proposing a bilateral free trade agreement with Jordan. 
According to Jordanian press reports, the agreement would 
include an investment framework agreement and would 
facilitate cooperation in e-government, information 
technology, port management, and tourism, and would remove 
barriers to trade in both goods and services.  The agreement 
between a current and a future U.S. FTA partner would be 
Jordan's first with an East Asian country, as well as 
Singapore's first with a country in the Middle East. 
 
4.  (sbu)  Jordanian officials have been cautiously positive 
about the proposal.  Trade Minister Salah Bashir told Amman 
ECON/C that such an agreement with a major global IT player 
could open the door to IT investments or joint ventures with 
Singaporean partners, as well as technology transfer 
possibilities.  Bashir cautioned, though, that any FTA with 
Singapore would have to include strong anti-circumvention 
mechanisms, to guard against the agreement being exploited 
for the surreptitious entry of Chinese goods into Singapore, 
Jordan, or the U.S. 
 
5.  (C)  A senior Singapore trade official told Singapore 
acting E/P Couns that the Middle East is an important region, 
but one where Singapore's economic engagement has been 
minimal. The official said an FTA with Jordan would help to 
correct this, and could act as a catalyst for further 
liberalization elsewhere in the region.   He said Yeo had 
briefed USTR Zoellick on the initiative.  Separately, Yeo 
commented to acting E/P Couns that a possible FTA with Jordan 
had initially been raised by then USTR Barshefsky, when the 
U.S. and Singapore were planning to use the US-Jordan FTA as 
a model for the US-Singapore FTA.  Yeo said he had asked 
Singapore's Ambassador to Washington to "let Charlene know 
that we're doing this." 
 
6.  (C)  Comment:  Current Jordan-Singapore trade is very 
small, about $26 million annually.  Nevertheless, there is a 
certain logic to the initiative:  Jordan likes to picture 
itself as the "Singapore of the Middle East," having, to some 
extent, modeled its open trade and investment policies on 
Singapore's.  The key difference is that Jordan is not 
surrounded by large, relatively prosperous neighbors.  Jordan 
has also focused its investment promotion activities on 
companies, often high-tech firms from Asia, wanting to use 
Jordan's FTA with the U.S. and Partnership Agreement with the 
EU as hubs for access to these large consumer markets.  An 
FTA with Singapore could build on this in Asia. 
 
7.  (C)  Comment continued:  While a Jordan FTA might also 
improve Singapore's access to Middle East markets as progress 
is made on a regional FTA and on cumulation agreements within 
the region, Singapore more likely views its offer as a 
political tool - a way to show the country's Muslim minority 
that the government, despite strong public support for the 
war against Saddam Hussein and defense links to Israel, is 
concerned about promoting economic prosperity among Muslims 
in the middle east.   Singapore is unlikely to be too 
ambitious with an FTA with Jordan; most of Singapore's 
existing FTAs, with the exception of that with the US (and to 
some extent that with Australia), offer little new 
liberalization beyond the status quo.   End comment. 
GNEHM