JORDAN AGREES TO POSITIVE STEPS TO FACILITATE

UNCLAS SECTION 01 OF 02 AMMAN 002850

SIPDIS

SENSITIVE

STATE PASS TO USTR

E.O. 12958: N/A
TAGS: ETRD PREL KTIA JO
SUBJECT: JORDAN AGREES TO POSITIVE STEPS TO FACILITATE
TRADE, LIMIT DAMAN PROGRAM

REF: 04 USDOC 05774

SENSITIVE BUT UNCLASSIFIED. FOR USG USE ONLY.


1. (SBU) SUMMARY: In a call on Minister of Industry and
Trade Ahmad Hindawi April 4, Commerce Assistant Secretary
William Lash was briefed on Jordan's latest positive
responses to USG concerns (reftel) regarding trade barriers
created by Jordan's DAMAN product conformity program.
Hindawi promised to implement suppliers' declarations of
conformity and to use a risk assessment system at the border,
in lieu of the current intensive pre-shipment or border
inspections of imports into Jordan. A/S Lash welcomed these
responses, and praised Jordan for its fast-growing trade
under Qualifying Industrial Zone (QIZ) agreement with Israel
and the U.S., as well as the bilateral Free Trade Agreement
(FTA). Lash also noted progress made by Jordan on
intellectual property rights and urged even more IPR law
enforcement to enhance Jordan's reputation for building a
knowledge-based economy attractive to foreign investors.
Both officials expressed amazement at the large turnout for
the Rebuild Iraq 2005 exhibition held in Amman April 4-7,
which has given Amman some of its highest hotel occupancy
rates in the last few years. END SUMMARY.

GOJ Reminder on Tariff Reduction Acceleration
--------------


2. (SBU) In a brief meeting at the Ministry of Industry and
Trade during a break in the Rebuild Iraq 2005 trade show,
Hindawi said that while the bilateral trade relationship had
its issues, overall trade was booming and there was hope for
continued growth in the future. He reminded A/S Lash of
Jordan's outstanding requests for the acceleration of tariff
reductions under the FTA and its call for a review of the
Israel-Jordan QIZ arrangement so that it is more nearly
equivalent to the Israel-Egypt QIZ agreement signed last
December 10. At the same time, Hindawi noted that Jordanian
QIZs would continue to improve their competitiveness and seek
to produce more "high-end" and niche products than Egypt
could. A/S Lash noted that the USTR was handling the GOJ's
requests on trade. He also praised Jordan for its
competitive strategy and encouraged Jordan to diversify its
productive capacity away from garments, especially in the
wake of the end of the Multi-Fibre Arrangement.

Two Positive Steps on DAMAN
--------------


3. (SBU) Hindawi launched without prompting into his
government's response to expressed U.S. concerns (reftel)
regarding trade inhibiting pre-shipment inspection regimes
connected with the DAMAN product conformity program. He said
that, based on concerns outlined in Charge's January 9
demarche on DAMAN, the GOJ had agreed in principle to
recognize Suppliers' Declaration of Conformity (SDOC) to
standards. A second step would be the implementation next
month of a risk assessment system at Jordan's borders that
would take into account the low risk associated with certain
countries of product origin (NOTE: To date, no U.S.-origin
products have registered in the monitoring system run by the
French contractor Bureau Veritas under a contract with the
Jordan Institute of Standards and Metrology (JISM),hence the
risk is zero. END NOTE.) Earlier, Jordan had devised a risk
system to include factors such as product, importer, and
exporter but not country of origin. He said the GOJ was
making a commitment to this new effort to allow products into
the market; after importation they could be inspected. In a
conversation on the margins of the meeting, JISM Director
General Yaseen Khayyat told Emboff that the details of these
two new initiatives had not been worked out, promising to
provide them as they became available. But Hindawi
emphasized the decisions had been made.


4. (SBU) Lash expressed appreciation for the GOJ's
willingness to solve mutual problems, including the growing
U.S. trade deficit with Jordan. Noting Jordan's lack of
standards labs, and low human capacity, Hindawi appealed for
U.S. technical assistance to raise JISM's overall performance
and to create in Jordan a legal liability system that it was
virtually lacking. A/S Lash mentioned assistance from such
groups as the American Trial Lawyers Association (ATLA).
Post will follow up with JISM to obtain their wish-list of
potential assistance needs.

IPR
---


5. (SBU) A/S Lash noted Jordan has made great progress on
IPR, pointing to its newly amended Copyright Law (NOTE: now
the law of the land as of March 31, to be reported septel).
Enforcement was just as important as the laws, said A/S Lash,
and as Jordan increased productivity and gained jobs through
a knowledge-based economy, these types of legal reforms would
attract investors who had confidence in the system. He urged
the GOJ to continue this positive trend. Dr. Hindawi said
that the GOJ was doing what it could to move forward on IPR.


6. (SBU) The Rebuild Iraq 2005 exhibition was so big, said
Hindawi, that he had to spend two hours going through it at a
fast walk, without stopping. A/S Lash replied that this kind
of success showed how important Jordan was as a gateway to
Iraq. (NOTE: Hotel occupancy rates were at near-record
highs during the exhibition, with at least one Hotel boasting
98 percent occupancy. Finding a hotel room became nearly
impossible for late-comers.) Both noted in particular the
impressive turnout of Iraqi business people.


7. (SBU) COMMENT: These two proposals are a good step
forward and a positive response to reftel demarche, but the
proof will be in the pudding. Post will look into the
details of the risk assessment and SDOC initiatives and
follow up as needed.
HALE