JORDAN TRADE MINISTRY ON FTA JOINT COMMITTEE AGENDA

UNCLAS SECTION 01 OF 05 AMMAN 004252

SIPDIS

SENSITIVE

USDOC 4520/ITA/MAC/ONE/WIEGLER
STATE FOR NEA/ARN, EB/CBA
STATE ALSO FOR EB/TPP/MTA/IPC P. QUIGLEY AND S. WILSON
PASS TO USTR C. NOVELLI AND E. SAUMS

E.O. 12958: N/A
TAGS: ETRD KTIA KIPR PREL JO
SUBJECT: JORDAN TRADE MINISTRY ON FTA JOINT COMMITTEE AGENDA

REFS: (A) Schedlbauer-Gnehm-Hale email (05/08/04)
(B)Amman 2574
(C)Amman 2494

SENSITIVE BUT UNCLASSIFIED. PROTECT ACCORDINGLY. FOR USG
USE ONLY. NOT FOR RELEASE ON THE INTERNET.


1. This is an action request. See last para.


2. (SBU) SUMMARY: Ministry of Industry and Trade senior
officials briefed embassy on the proposed agenda for the
June 8 Free Trade Agreement Joint Committee meeting (the
JC). A key change is the GOJ's likely submission of a
revised list of goods for which they are seeking accelerated
ted
tariff reductions; the list may not be ready until soon
before the JC. Other new items included a request to
discuss Non-Agricultural Market Access; and to hear
presentations from USAID on technical assistance related to
customs, on overall bilateral assistance, and on trade
capacity building (particularly in the garments and textiles
sector). The GOJ omitted the U.S. Bio-terrorism Act and
tourism from the proposed agenda. GOJ counterparts offered
suggestions for timing on a proposed agenda meeting their
general agreement on sequence. The GOJ has not yet informed
us of details related to its expressed continued interest in
raising Iraq Reconstruction and also on presenting plans to
promote investment. The GOJ requests minutes be made of the
JC. We are still awaiting a formal delegation list, but are
assured that JABA will lead the private sector during a
proposed lunch. Embassy requests Washington's concurrence
with the proposed agenda to submit to DPM Halaiqa for his
agreement after his return from Morocco on May 30. END
SUMMARY.


3. (SBU) GOJ senior trade officials Amer Hadidi and Maha
Ali on May 26 concluded discussions begun early May on the
proposed JC agenda, settling on six general topics they had
proposed (generally tracking refs A and C). They
anticipated a brief ceremonial opening to the JC --
expressing the hope that USTR Zoellick would participate -
but focused their comments on the JC content. On protocol
issues, such as deciding who takes the lead on any given
subject, Hadidi suggested that the JC remain informal,
allowing the topic at hand to be the guide. This report
outlines and explains the proposed agenda according to each
of the six main points. (See full proposed agenda,
including proposed timing, in para 25.)

General Discussion
--------------


4. (SBU) The GOJ believes that a general review by the USTR
on all FTAs worldwide - including but not limited to Middle
East FTAS and the proposed MEFTA - would help the GOJ
J
better understand its options with the bilateral FTA.
Having just concluded an FTA with Singapore, for example,
the GOJ would like to explore possibilities of negotiating a
new annex or protocol among the three nations that would
allow accumulation of content on a preferential basis for
goods jointly produced by Jordan and Singapore.


5. (SBU) The GOJ proposes to follow with an update on its
trade agreements, including the newly concluded Jordan-
Singapore FTA and the GOJ's amended agreement with Israel
allowing for a QIZ-like arrangement with the EU.


6. (SBU) Hadidi said that the GOJ would lead off on a
discussion of the end of the Multi-Fiber Agreement and its
potential effects on Jordan's emerging garments industry.
The GOJ would expect the USG to respond. (NOTE: Hadidi
mentioned again that A/USTR Cathy Novelli had said last year
that some future events would probably impact on China's
potential dominance of the U.S. apparel market in a world
without quotas. He hoped the USG presentation would explain
what else might be in the offing, in addition to safeguards
measures taken against China in the past few months. END
NOTE.)


7. (SBU) On WTO-related issues, Maha Ali asked for a
discussion on "WTO Ongoing Negotiations" saying that the
GOJ would like to raise Non-Agricultural Market Access
(NAMA),particularly the sectoral initiative as it relates
to textiles and garments.


8. (SBU) As both the U.S. and the GOJ are required to file
submissions to the WTO on the bilateral FTA, Hadidi said
that it would be useful for the delegations to agree on how
to coordinate this work. (USG to lead off.)


9. (SBU) On Jordan's GPA submission to the WTO, Ali said
that if a new, revised entity offer is made in the WTO this
summer, the multilateral GPA could well solve the GOJ's
problems with "Buy America" provisions in the U.S. In the
meantime, she implied that to satisfy domestic constituents
the GOJ might ask for a waiver under the FTA of "Buy
America." Hadidi asked if the U.S. had ever given such
waivers. (Ambassador has made clear to DPM Halaiqa that
such a waiver was unlikely to be granted.)

U.S.-Jordan FTA
--------------


10. (SBU) Hadidi explained that close to half of the items
included on Jordan's original list of goods for which it was
seeking accelerated reduction of tariffs were "subject to
dismantling." (Another MOIT sources said that a number of
listed tariff items were going to be zeroed out in 2005.)
Given this circumstance, the GOJ was revising its list of
requested reductions, said Hadidi. The GOJ hoped to get the
list to the USG by next week, he said. At the JC, he would
expect the GOJ to go through the new list, explaining its
requests. Acknowledging that such a request would require
time-consuming consultations by USTR with U.S. domestic
constituencies, Hadidi expressed the hope that USTR would at
least join in a discussion in principle about the items on
the list.


11. (SBU) On rules of origin (ROO),Hadidi explained that
the GOJ was seeking a brief exchange on the provisions in
the FTA calling for further bilateral consultations on ROO.
DPM Halaiqa and the USG head of delegation might quickly
give their blessing to such technical talks, he said. In
the context of the preferential treatments offered by the
FTA, the GOJ saw approved side-meetings (held at a later
time, after the JC) as a way to iron out any additional
protocols making possible Jordan's accumulation of content
with "adjacent nations" such as Israel, Iraq and the
Palestinian Authority (Article 13 of the FTA ROO Protocol)
and with nations such as Singapore and Morocco.


12. (SBU) USTR's proposal to discuss both Jordanian and
Egyptian QIZs is acceptable to the GOJ. The GOJ might
respond briefly, but to date, the Ministry of Trade has
taken the view that Jordan is a full competitor in the
global marketplace and would attempt to meet the challenge
of any Egyptian QIZs. The GOJ might make reference to
Jordan's advanced economic reforms and commitment to meet
international labor standards, but Embassy does not
contemplate this being a long reply.

FTA Implementation
--------------


13. (SBU) We propose to cap the morning session with the
report on the Environmental Forum preparatory meeting
(embassy environmental HUB's preferred language),which will
have been held on June 7. Earlier embassy meetings
established that GOJ Minister of Environment Alia Bouran
would make the lead presentation in preparation for a
proposed JC Environmental Forum in the fall. Hadidi
mentioned debt swap as one possible topic, although He was
uncertain of the details. (Email traffic between embassy
and State Bureau of Oceans, Environmental and Scientific
Affairs lays out the plan for this session.)

Luncheon
--------------


14. (SBU) Embassy has passed JABA contact information to
USTR to follow up the lunch hosted by the U.S-Jordan
Business Alliance. Embassy Commercial Section is in contact
with the Department of Commerce to add two U.S.
representatives from sectors affected by DAMAN, possibly
from the U.S. automotive and IT sectors. MOIT has asked
that JABA be in the lead for the GOJ private sector at the
lunch, so that there is no confusion with the separate trade
delegation going on to Chicago. JABA may raise some of the
issues already part of the JC agenda, such as E1/E2 visas
and participation by Jordanian manufacturers in the Customs-
Trade Partnership Against Terrorism (C-TPAT),mindful not to
have needless repetition. JABA may raise the DAMAN program
from the point of view of importers and may also discuss its
leading role as the home of the "FTA Unit" (an information
and consulting center to assist importers and exporters
effectively use the FTA, based at JABA but funded by
multiple Jordanian industrial and commercial associations as
well as USAID). If the U.S. Bio-Terrorism Act comes up at
all, this might be the venue, as one Jordanian company lost
its food shipment over Christmas and believes the new
regulations may have been partially responsible. Although
JABA will just have concluded elections, current Chairman
Azzam Schweihat is slated to lead the GOJ's JC private
sector delegation, accompanied by and Rose Al-Issi, CEO of
JABA. Also attending will be Mr. Samer Asfour of the Amman
World Trade Center; Ms. Hanan Sboul, Secretary General of
the Jordan Association of Manufacturers of Pharmaceuticals
and Medical Appliances (JAPM); and Mr. Jad Makdah, President
of CJC shirt manufacturers and a board member of the Amman
Chamber of Industry.

FTA Implementation
--------------


15. (SBU) Under the Customs heading, we propose to discuss
the current levels of customs technical assistance funded by
USAID through the AMIR program, including good work on risk-
based assessment of imports. This would lead into a
discussion of the DAMAN program. Dr. Ahmad Hindawi, the
Jordan Institute of Standards director who runs DAMAN, will
be part of the GOJ delegation. (On June 3, JABA will hold a
needs assessment on DAMAN with the private sector, in
preparation for its own domestic advocacy against certain
problem areas of the pre-shipment inspection program.)


16. (SBU) The GOJ is prepared to make brief presentations
on labor issues and to answer questions posed about the
situation, especially in the QIZs. The Ministry of Labor
worked on the USDOL-funded projects led by ILO; an MOIT
delegate may review information provided by Jordan's MOL on
the child labor program.


17. (SBU) A MOIT official will talk about Jordan's
internet treaties accessions and plans for patents and
trademarks treaties and protocols and will also likely brief
on copyright law amendments. The GOJ would expect a USG
response and/or questions. The GOJ proposes that the USG
lead on IPR enforcement efforts, citing our specific
concerns, to which the GOJ would respond. Embassy
recommends a sub-topic on protections for pharmaceuticals
(which the GOJ is prepared to discuss, if we take the lead).
We are still consulting with PhRMA on Jordan's narrow, 12-
month window for drug patent registrations and on the
FosaMax drug copy case. (NOTE: Jordan hosts a WIPO
conference on IPR June 1-3, to be attended by Susan Finston
of PhRMA's Washington office.)


18. (SBU) The E1/E2 treaty trader/investor visa appears to
be a soluble problem (nor has it been a source of friction).
Embassy has confirmed that Jordan presently is issuing an
equivalent, renewable visa valid for 12 months, multiple
entries. Upon Department authorization, U.S. visa-issuing
posts would be able to issue E1/E2 visas of the same
validity and entries as an interim solution. Further, we
believe that there is sufficient political will on the GOJ
side to explore eventually making this a five-year,
multiple-entry visa on a reciprocal basis, in accordance
with Department standards. We believe at least one large
exporter will apply for this visa.

Reconstruction of Iraq
--------------


19. (SBU) DPM Halaiqa reportedly expressed a tentative
interest in the reconstruction of Iraq. The MOIT could not
give us any particulars and will discuss further with the
DPM. If the agenda item remains without further
elaboration, the MOIT said they would expect the USG-led
discussion to be brief, unless there were significant new
developments. (NOTE: If the FTA Implementation session
goes long in the afternoon, we could make up time here.)

Technical Cooperation
--------------


20. (SBU) The GOJ has requested presentations from the USG
on various aspects of the bilateral assistance program, most
particularly as it affects trade capacity building, and
especially in the garments sector. The USAID mission plans
to send a representative to make the presentation to the JC.
The GOJ cabinet recently approved Jordan's national strategy
for the textiles and garments sector and Jordan wants to
enhance trade facilitation in this area. (COMMENT: This is
designed to be another opportunity for the GOJ to make known
its assistance needs. We were told the Jordan Investment
Board might make a pitch and that the GOJ might pass on a
Customs Department request for technical assistance related
to rules of origin. END COMMENT.)

Other Issues
--------------

21. (SBU) Jordan is prepared to respond to our concerns
about bans on certain food imports. Embassy advised that
our concern about shelf life was to seek a briefing on the
status of implementation of WTO-compliant rules and
regulations. (NOTE: If still a concern, MOIT requests us to
provide in advance specifics on the issues.) Based on
advice received from the USAID AMIR program, the MOIT is
expressing renewed interest in a double taxation treaty.
DPM Halaiqa would like a further briefing if the GOJ would
not have to divulge as much information as originally
thought. The U.S.-Turkey tax treaty, Article 26, was cited
as an example of a potentially feasible agreement. Reem
Badran of the Jordan Investment Board may make a
presentation on investment; MOIT is checking further on
this.


22. (SBU) Petra Engineering, which ships over 500
containers to the U.S. per year would like to take part in
the C-TPAT program, facilitating speedy entry to containers
for vetted, secure companies. We explained to GOJ
counterparts that this is a by-invitation-only arrangement
run by USDHS Customs and Border Protection. The GOJ would
like to learn more about the program and seek assistance to
get Petra a place at the C-TPAT table.

Dropped Topics
--------------


23. (SBU) The U.S. Bio-terrorism Act and tourism in Jordan
were not raised again by the MOIT. They did not express an
interest in pursuing these topics.

Logistics
--------------


24. (SBU) When the MOIT responds with a final list of
delegates, Embassy will fax it to the Department. An
invitation to the JC, citing venue would be welcomed by the
GOJ, as would any additional information on the proposed
luncheon. Embassy plans to send the DCM, USAID Economic
Opportunities Office Director, and Economic Officer to
attend the JC. MOIT's Hadidi and Ali expressed an interest
in having formal minutes for the JC meeting. Hadidi
recalled that there were no minutes from the December 2002
JC, and this gap was remarked upon by officials back home.
It is a regular GOJ practice to have minutes for official
meetings, he added. (COMMENT: If USTR agrees, Embassy
recommends the USG supply professional-level transcription
for the JC, obtaining agreement in advance that the
resultant product would be "informal minutes." Although
an additional resource demand, arranging these informal
minutes would enable us to resolve any differences of view
regarding the outcome of the JC. END COMMENT.)

Proposed Agenda
--------------


25. (U) BEGIN TEXT OF PROPOSED AGENDA

NOTE: Following each item is lead presenter (and follow-on,
as appropriate),as tentatively agreed with the GOJ.

MORNING SESSION


1. GENERAL DISCUSSION (1 hour)
-- Status of U.S. FTA's worldwide, including in ME
and MEFTA - USG
-- Update on Jordan's Trade Agreements and related economic
developments - GOJ
-- The MFA and the future of the world textiles and
garments trade GOJ, USG
-- WTO-related issues
- WTO ongoing negotiations GOJ, USG
- Discussion on coordinating submissions on FTA to
WTO - USG, GOJ
- Brief on Jordan's GPA submission to WTO - GOJ



2. THE U.S.-JORDAN FTA (1 hour)
-- Jordan's revised request to accelerate tariff reductions
under FTA - GOJ, USG
-- Brief discussion of rules of origin and accumulation of
content - GOJ, USG
-- QIZ's - USG, GOJ


3. FTA IMPLEMENTATION (= hour)
-- Environment report of USG/GOJ Environmental Forum
preparatory meeting GOJ, USG


LUNCH (1 = hours)
-- Hosted by U.S.-Jordan Business Alliance with private
ate
sector participants
-- During last half hour, a moderator will lead discussion
with private sector
- Each private sector head will give a very brief
presentation
-Moderator to oversee Q&A between private sectors and
governments

AFTERNOON SESSION


3. FTA IMPLEMENTATION (continued) (1 hour)
-- Customs (USG, GOJ)
- Technical assistance to Jordan USG, GOJ
- DAMAN pre-shipment inspection program USG, GOJ
-- Labor
- Labor issues in QIZs GOJ, USG
- Status of MOL/ILO projects in Jordan GOJ, USG
-- IPR
- Legal framework, including convention and treaty
obligations GOJ, USG
- Jordanian copyright law amendments GOJ, USG
- Enforcement efforts USG, GOJ
- Protections for pharmaceuticals USG, GOJ
-- E1/E2 Treaty Trader/Investor visas USG, GOJ



4. RECONSTRUCTION OF IRAQ
(tentative; GOJ to add subtopics) (= hour)
-- Access to Iraqi market - USG



5. TECHNICAL COOPERATION (= hour)
-- Overall bilateral assistance program - USG
ram - USG
-- USAID's trade facilitation program USG, GOJ
-- Assistance to facilitate trade in garments and
textiles GOJ, USG



6. OTHER ISSUES (= hour)
-- Agriculture
- GOJ's BSE ban (beef) and avian influenza
ban (chicken) USG, GOJ
- Implementation of WTO-compliant shelf life regulations
for foods USG, GOJ
-- Double taxation GOJ, USG
-- Investment GOJ (tentative)
-- Private Sector Issues
- CTPAT program participation for Jordanian manufacturing
firms - USG, GOJ



26. (SBU) ACTION REQUEST: Embassy requests Department's
concurrence with a final proposed JC agenda to pass to the
Government of Jordan to seek DPM Halaiqa's final agreement
after his return from Morocco on Sunday, May 30.

GNEHM
GNEHM