MIDDLE EAST TRADE INITIATIVE ASSESSMENT - JORDAN

C O N F I D E N T I A L AMMAN 003099

SIPDIS

STATE PASS USTR FOR DOUG BELL

E.O. 12958: DECL: 05/22/2013
TAGS: ETRD ECON EINV JO
SUBJECT: MIDDLE EAST TRADE INITIATIVE ASSESSMENT - JORDAN

REF: A. STATE 135263

B. AMMAN 2786

Classified By: Ambassador Edward W. Gnehm, reasons 1.5 (b,d)


1. (c) Senior Jordanian officials issued strongly
supportive statements both in public and in private following
the President's May 9 announcement regarding the Middle East
Trade Initiative. In comments repeated privately to the
Ambassador (ref b),Planning Minister Bassem Awadallah told
the Jordan Times he welcomed the move, and expressed hope
that the initiative would stimulate long-dormant inter-Arab
trade. When asked his views about Jordan losing its "special
relationship" with the U.S. as the only Arab country with an
FTA and QIZ status, Awadallah noted that "the age of
mercantilism is over,", and reiterated that any initiative
that enlivened the regional economy would be to Jordan's
benefit.


2. (c) Trade Minister Salah al Bashir has made similar
remarks in meetings with Emboffs, going so far as to say that
an FTA for Egypt would be "the best thing" for Jordan. He,
like Awadallah, believes that the initiative should increase
economic growth and activity both within the region and with
the U.S., and concludes that prosperous neighbors will offer
the best opportunities to create a more prosperous Jordan.


3. (c) These initial reactions indicate strong support for
the President's initiative. As a country that has made
significant progress, often at great political risk, on its
economic reform agenda, Jordan already benefits from most of
the programs on offer through the initiative. The GOJ will
hope to play a leadership role in helping to roll out the
initiative, and may even want to offer technical assistance
to other countries in the region that need to upgrade
legislation or procedures. To that end, the GOJ might
support programs under the initiative that factor in
capacity-building opportunities for rejuvenating inter-Arab
trade. Jordan would likely be particularly interested in
docking agreements and cumulation clauses that would spur
trade with other countries in the region.


4. (c) While we expect strong support from Jordan for this
initiative, we also expect some degree of sensitivity. The
GOJ will expect new beneficiaries of U.S. preference programs
and agreements - whether QIZ's, FTA's, BIT's, or assistance
with WTO accession - to be held to the same high political
and economic standards to which Jordan was held in
negotiating its own agreements. Thus, for example, they will
expect any new QIZ agreements to require 11.7% Israeli
content in finished goods, the highest (i.e., "TRIPS-plus")
protections for intellectual property rights, especially in
the pharmaceutical field, and minimal product category
exclusions for tariff reduction schedules under new FTA's.
If it appears that neighboring countries are getting "easier"
terms, the GOJ will argue vociferously that other countries
should have to meet the same standards that Jordan attained
when it secured its original agreements.
GNEHM