COMMERCE A/S LASH RAISES TRADE ISSUES WITH DPM

UNCLAS SECTION 01 OF 03 AMMAN 000585

SIPDIS

SENSITIVE

STATE FOR NEA/ARN
USDOC 4520/ITA/MAC/OME/NWIEGLER
PASS TO USTR - E. SAUMS

E.O. 12958: N/A
TAGS: ETRD KIPR JO WTO
SUBJECT: COMMERCE A/S LASH RAISES TRADE ISSUES WITH DPM
HALAIQA

REF: A. AMMAN 460

B. 03 AMMAN 7182

C. 03 AMMAN 6449

D. 03 USDOC 3249 (27 JUNE 2003)

SENSITIVE BUT UNCLASSIFIED. FOR USG USE ONLY.


1. (SBU) SUMMARY: Department of Commerce Assistant
Secretary William Lash and Ambassador Gnehm met January 10

SIPDIS
with Deputy Prime Minister and Minister of Industry and Trade
Mohammad Halaiqa to review bilateral trade issues and discuss
the prospects for Jordanian companies doing business in Iraq.
While praising Jordan as a model of trade relations and
economic reform in the region, A/S Lash raised key
intellectual property rights (IPR) issues of concern to U.S.
industries. He also called on the Government of Jordan (GOJ)
to re-think its DAMAN pre-shipment inspection program (Refs),
which could block market access. Halaiqa showed
understanding of the issues and agreed to a follow-on meeting
with the GOJ agency sponsoring the DAMAN program. Halaiqa
expressed his appreciation for the fact that Jordanian
companies could compete for $18 billion in Iraq
reconstruction contracts, and asserted that the GOJ would
help facilitate these and Jordanian-Iraqi joint ventures in
an effort to assist Iraq over the long term. END SUMMARY.


2. (U) A/S Lash and the Ambassador called on DPM Halaiqa at
his Prime Ministry office. They were accompanied by Fred L.
Schwien of the Office of the Secretary, Department of
Commerce; Laurie Farris, Embassy Amman Commercial Counselor;
Naomi Wiegler, International Trade Administration, Department
of Commerce; and Greg Lawless, Economic Officer (notetaker).
The atmosphere was informal on a Saturday afternoon (when
most offices are closed). DPM Halaiqa displayed the full
range of his character as a warm host, a proud champion of
economic reform, a committed and well-informed trade partner,
and an excited participant in the January 11-13 Iraq OUTREACH
2004 trade show, which he planned to kick off that evening.

Jordan as a Model; IPR Issues
--------------


3. (SBU) A/S Lash, noting that Jordan was a model of trade
liberalization and economic reform in the region, said the
overall trade relationship was good and that the U.S. was
looking forward to expanding our partnership. Halaiqa
interjected with a story about the U.S. Arab Economic Forum
held in Detroit last September. When Arab League Secretary
General Amr Moussa spoke he did not even mention Jordan, said
Halaiqa, who later went up to Moussa to let him know that he
had noticed. Halaiqa said with a grin that he told Moussa
Jordan didn't mind the lack of an AL endorsement because
Jordan didn't need it. A/S Lash responded that both he and
State Department Assistant Secretary for Economic and
Business Affairs Wayne had talked about promoting the
Jordanian model of economic reform.


4. (U) With such a strong bilateral relationship, continued
A/S Lash, the USG wants to do more, including to see that new
copyright legislation is passed by the GOJ. There are IPR
issues regarding information technology (IT) and also with
phonograms and the USG would like to see new legislation in
these two areas. Of course, he continued, when everyone is
using licensed software, life is simple. IPR enforcement is
another area where the USG has an interest, said A/S Lash who
offered to help with an awareness campaign that derives from
U.S.-based industries. The USG would follow up on this and
could supply some information, if needed, he continued,
noting that concerned industries would have a vested interest
in an awareness campaign.


5. (SBU) DPM Halaiqa replied that the GOJ had done some
work on copyright legislation, recently having reviewed the
issue with Ambassador Gnehm (Ref A). Everything should be
fine in this area and the U.S. should be happy about it, he
averred. The GOJ had made commitments regarding use of
licensed software, he noted (FTA, Article 4, para 15; see
Reftel A regarding a new effort by the GOJ to circulate a
notice on authorized use of software). This is very
important to the GOJ, because credibility is very important;
the GOJ does what it says, he noted. To attract investors it
is also important to fulfill commitments, he said. Noting
that bureaucracy and lack of resources hamper the GOJ's
efforts, the good intentions are there, he added. The GOJ
could use some help in IPR, although lawyers in the private
sector sometimes consult. The USAID program on Achievement
in Market Friendly Initiatives and Results (AMIR) was another
source of assistance, he said. He would let the USG know if
further assistance was needed on IPR.
DAMAN - The Trade Barrier Keeps Growing
--------------


6. (SBU) A/S Lash asserted that whenever he has seen
pre-shipment inspection regimes, they have always presented
trade problems. Usually these programs are seen in least
developed countries, in Latin America and Africa, he
continued. The DAMAN program sponsored by the Jordan
Institute of Standards and Metrology (JISM) was such a
program, though A/S Lash acknowledged the concerns raised by
a JISM study that showed that current border controls did not
adequately assure consumer and environmental safety.
Nonetheless, he continued, there was no evidence of any
consumer damage from U.S.-manufactured products. The DAMAN
program was discriminatory in that it did not apply to
Jordanian products and the potential inspections slowed down
trade flows, he concluded.


7. (SBU) DPM Halaiqa responded that the GOJ did not mean
for DAMAN to be a trade barrier or discriminatory. It would
be applied to domestic industries soon, he said. The GOJ
wants trade to be smooth. Since notifying the WTO about the
program, the GOJ has not received a formal complaint, he
added. He said that he would examine the volume of trade
affected and the time that it was taking. If there was a
problem, he would take action, he said. (NOTE: French firm
Bureau Veritas, which runs the DAMAN program, told the
Embassy that only certain industries are targeted for the
first half of 2004 under a limited licensing program. BV
Regional Manager Andrew Yell has not committed to a set
timeline by which a the domestic program, originally set to
start in 2007, would be up and running, saying only that BV
is "working with the government." On volumes, BV told the
Embassy that about USD 3 million in U.S. goods have been
affected over the first four months, including about USD 1
million in new automobiles. However, this does not include
GM cars from South Korea, which is the third most affected
country in the program, after Japan and China. END NOTE.)


8. (SBU) A/S Lash said that the USG compiles an estimate of
trade barriers. It is a big book that is now being assembled
and the interagency process will be looking at Jordan. DPM
Halaiqa agreed with A/S Lash that Jordan would not want to be
listed for trade barriers, especially as an FTA partner.
Another form of barrier in the DAMAN system, A/S Lash
continued, was the mis-use of standards, including those used
for IT products and for automobiles. The USG recognized
multiple international standards, he said, but the
combination of EU standards used in DAMAN and the small
presence of BV labs in the U.S. did not help our exporters.
Others in the USG delegation raised the fees U.S. exporters
had to pay and the "real problems" posed by EU standards in
the DAMAN program.


9. (SBU) DPM Halaiqa replied that DAMAN applies to only 40
items and if a manufacturer has a certified product they only
have to submit the paperwork to Bureau Veritas. This could
benefit the U.S. The GOJ is importing more goods from Asia
which are of very poor quality, he averred. The standards
are "a mix" of European and other standards he said. (NOTE:
In a January 8 briefing to the diplomatic community by Bureau
Veritas, Andrew Yell revealed that Jordan will be expanding
the DAMAN program to include other electronics, electronic
parts, and medical equipment, among other product categories.
END NOTE.)


10. (SBU) A/S Lash said that the use of multiple standards
was acceptable so long as they were standards openly
developed and used. Expressing the hope that there was not a
perceived rift on this issue, A/S Lash said that some nations
use standards as a way to block market access or steal market
share. That and the extra paperwork and fees required by
DAMAN would mean that U.S. exporters will complain to
Secretary Evans, who will then ask A/S Lash to fix the

SIPDIS
problem. He hoped that the issue could be addressed before
that happened, he said.


11. (U) DPM Halaiqa said that he would arrange to have a
meeting between a U.S. representative and JISM Director
General Ahmad Hindawi, in Halaiqa's presence, so that the
issue could be clarified. The Ambassador thanked DPM Halaiqa
for this offer, saying that he knew that the DPM would work
on the issue from the right point of view.

Iraq Reconstruction
--------------

12. (SBU) In an exchange on Jordan's role in Iraq's
reconstruction DPM Halaiqa expressed appreciation for U.S.
support in such endeavors as the Iraq OUTREACH 2004 trade
show, but noted that follow-up was key. He also referred to
an MOIT program identifying potential U.S. company partners
and matching Jordanian firms, which was receiving a good
response. A side effort of the GOJ, he said, was to
encourage Jordanian companies to join with Iraqi firms. The
target is to work with Iraqis as sub-sub-contractors, he
said, in an effort to assist Iraq over the long term.


13. (U) This cable has been cleared by Assistant Secretary
Lash.
GNEHM