AMENDED JORDAN-ISRAEL QIZ AGREEMENT

C O N F I D E N T I A L AMMAN 008228

SIPDIS

STATE PLEASE PASS TO USTR
STATE FOR NEA FRONT OFFICE, NEA/ELA, NEA/IPA
STATE ALSO FOR EB/TPP/ABT
COMMERCE/ITA/OTEXA - M. D'ANDREA

E.O. 12958: DECL: 10/17/2015
TAGS: ETRD KTEX ECON PREL IS JO
SUBJECT: AMENDED JORDAN-ISRAEL QIZ AGREEMENT

REF: A. MAZZE-SAUMS-LAWLESS EMAIL (10/14/05)

B. AMMAN 7793

C. TEL AVIV 5077

D. AMMAN 4440

Classified By: CDA DANIEL RUBINSTEIN FOR REASONS 1.4 (B) AND (D)


1. (C) Ministry of Industry and Trade official Baha'a
Al-Armouti passed to Econoff October 17 the initialed
amendments to the 1997 Israel-Jordan Qualifying Industrial
Zone Agreement. The changes reflect mutual understandings
reached in September (Ref B). Armouti explained that the
amendments to the agreement - and a proposed new Annex A -
change the QIZ audit mechanism to a quarterly system that
mirrors a QIZ agreement reached earlier between Israel and
Egypt, except that the required Israeli content in Jordanian
manufactured goods is stipulated to be eight percent, with no
carry-forward provision (Ref B). NOTE: According to Armouti,
arrangements must be made between buyers and sellers
regarding any Israeli goods purchased by Jordanian
manufacturers with the intent to contribute to the eight
percent content but not subsequently used. The amounts for
these goods cannot be held in escrow in quarterly audit
accounts, to be applied to content in the next quarter. END
NOTE.


2. (SBU) Post expects that a copy of the amended agreement
will be formally forwarded to USTR under a cover letter from
the Israeli and Jordanian trade ministers, seeking USG
concurrence. Post is forwarding a copy of the initialed text
to NEA/ELA and to USTR.


3. (SBU) Post conveyed to relevant GoJ officials the
technical suggestions by U.S. Customs and Border Protection
(Ref A) for a smooth-running system of lists of approved QIZ
companies, with the preliminary understanding that these
logistical issues would not need to be incorporated into the
amended QIZ Agreement text. Please advise if there is
additional information desired by Washington agencies
regarding the amendments in advance of the final USG decision
regarding this revised agreement.
RUBINSTEIN