JORDAN HINTS AN FTA WAIVER FROM DAMAN PROGRAM WILL

UNCLAS AMMAN 003425

SIPDIS

NOFORN
SENSITIVE

USTR FOR C. NOVELLI AND E. SAUMS

E.O.: 12958: N/A
TAGS: ETRD PREL KTIA JO
SUBJECT: JORDAN HINTS AN FTA WAIVER FROM DAMAN PROGRAM WILL
NOT FLY

REF: AMMAN 2790

SENSITIVE BUT UNCLASSIFIED/NOFORN. FOR USG USE ONLY.


1. (SBU) Post this week received a letter from Deputy Prime
Minister Halaiqa, dated April 29, which attempts to walk the
cat back from a previous exchange with the Ambassador
(reftel) in which Halaiqa had been forward-leaning,
suggesting that exemption of U.S.-origin imports from the
DAMAN pre-shipment inspection program might be possible under
the FTA. (Post is faxing a copy of the three-page letter to
NEA/ARN.) The letter acknowledges a "request to be
exempted", but outlines why the DAMAN program is consistent
with the WTO principles. The letter states that DAMAN does
not constitute an impediment to exporting U.S. shipments to
the Jordanian market. (NOTE: Post will provide separately a
point-by-point analysis of the letter, showing why we think
DAMAN is both a barrier to existing trade, especially in
automobiles, and blocks market access to would-be U.S.
exporters, as seen in one graphic example in reftel. END
NOTE.)


2. (SBU) The letter concludes, however, by reinforcing DPM
Halaiqa's more positive assurances from exchanges earlier
this year that the Government of Jordan is committed to
facilitating trade flows and enhancing trade relations, and
will continue to discuss with the U.S. the DAMAN issue.


3. (SBU/NF) COMMENT: The letter echoes what some at the
working level have been saying privately: the GOJ cannot
find a way to waive the U.S. from DAMAN without violating WTO
rules against discrimination. We believe that the intent of
the letter is to convey this message formally, without saying
so explicitly. We will see Halaiqa at the earliest
opportunity to raise DAMAN's inconsistency with the bilateral
Free Trade Agreement (FTA). Following that conversation, we
will provide recommendations on handling this issue at the
early June FTA Joint Committee (JC) meeting.
HALE