Identifier
Created
Classification
Origin
06AMMAN4653
2006-06-22 16:40:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Amman
Cable title:  

JORDAN SEEKS U.S. SUPPORT IN DOHA ROUND FOR MORE

Tags:  ETRD ECON KTEX PREL JO 
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PP RUEHWEB

DE RUEHAM #4653/01 1731640
ZNR UUUUU ZZH
P 221640Z JUN 06
FM AMEMBASSY AMMAN
TO RUEHC/SECSTATE WASHDC PRIORITY 1633
INFO RUEHGV/USMISSION GENEVA PRIORITY 0533
UNCLAS AMMAN 004653 

SIPDIS

SENSITIVE
SIPDIS

STATE PASS TO USTR

E.O. 12958: N/A
TAGS: ETRD ECON KTEX PREL JO
SUBJECT: JORDAN SEEKS U.S. SUPPORT IN DOHA ROUND FOR MORE
COEFFICIENT POINTS AS A RECENTLY ACCEDING MEMBER, AND FOR
GARMENT TARIFF HARMONIZATION PROPOSAL

UNCLAS AMMAN 004653

SIPDIS

SENSITIVE
SIPDIS

STATE PASS TO USTR

E.O. 12958: N/A
TAGS: ETRD ECON KTEX PREL JO
SUBJECT: JORDAN SEEKS U.S. SUPPORT IN DOHA ROUND FOR MORE
COEFFICIENT POINTS AS A RECENTLY ACCEDING MEMBER, AND FOR
GARMENT TARIFF HARMONIZATION PROPOSAL


1. (SBU) SUMMARY: In a letter to the Ambassador received
June 18, Jordan's Minister of Industry and Trade sought U.S.
government support on two positions the GoJ has staked out
with other groups of developing nations in the WTO Doha Round
of trade negotiations. The key issues for Jordan are
proposed tariff reductions in the non-agricultural product
market access (NAMA) discussions, and a Turkish initiative on
harmonizing textile and garment tariff reductions. END
SUMMARY.


2. (SBU) Jordan is seeking U.S. support for its two
positions outlined in the letter reproduced below, noting its
own support for U.S. positions in the WTO on IPR,
Geographical Indications, Trade Policy Reviews, and in the
work of the Regional Trade Agreements Committee.

BEGIN TEXT OF LETTER FROM THE MINISTER OF INDUSTRY AND TRADE:

Complimentary salutation

...the Doha Round negotiations in the World Trade
Organization (WTO) is in a vital stage especially after the
WTO 6th Ministerial Conference which took place last December
in Hong Kong, China. In this regard, I would like to
reassure you that Jordan is seriously committed to
participate effectively in the current round of negotiations,
in harmony with the economic and trade policies adopted by
Jordan taking into consideration that the outcomes of such
negotiations should have a positive impact on our economy as
a developing country and a recently acceded member to the
WTO. Jordan looks with much hope to the support of its
trading partners especially those with whom we share common
interests and long-standing relationships on the bilateral
and multilateral levels like the United States of America
which we consider as a partner for development. Jordan has
been always supporting U.S. proposals in trade issues such as
Intellectual Property and Geographical Indications
Extensions, Trade Policy Reviews, and the work taking place
in the Regional Trade Agreements Committee in the WTO
building on our belief that such strong ties should be
translated into real benefits for both of our countries.

The Doha Round is approaching a serious track particularly in

the negotiations on the non-agricultural products where
efforts are concentrating on determining the coefficients for
the tariff reduction formula and the scope of goods on which
the formula will be applied. Jordan has serious concerns in
these negotiations mainly in the following areas:

-- As a recently acceding member (RAM) to the WTO, Jordan has
provided extensive liberalization commitments upon its
accession recognized by Doha Ministerial Declaration
(Paragraph 9). To this effect RAM's are eligible for special
and differential treatment in the current round pursuant to
the Hong Kong, China Declaration. Recent talks and informal
consultations in the WTO have shown that members are willing
to add only 5 points to the formula coefficient that will be
agree upon by members for developing countries, Jordan's
expectations for the treatment to be granted to RAM's is far
more than that. If such scenarios were applied Jordan's
government budget will be extremely affected by the outcome
of this round and accordingly economic development efforts in
the country will be seriously affected due to the loss in
customs revenues.

-- Garment sector in Jordan represents about one-third of the
Jordanian exports and is considered the highest exportable
product in Jordan in terms of growth rate generating a
significant number of employment opportunities. Since
January 2005 due to the expiration of the WTO Agreement on
Textiles and Clothing the Jordanian garments industry has
been, and will be affected negatively by the unfair
competition with other countries if the same tariff formula
coefficient will be applied on this sector, as this will
result in reduction of customs duties applied by major export
markets (the United States and the European Union) on the
garment sector and accordingly preferences in export markets
will be eroded by granting similar preferences to other
countries with which Jordanian industry can not compete.

Jordan seeks the support of the United States of America in
the above mentioned negotiating areas: granting RAM's a
minimum of 15 points to be added to developing countries
coefficient taking into consideration the country's share in
world trade to be eligible for such treatment, and to support
the garment and textile sector harmonization initiative which
would be vital for supporting the Jordanian economy as a
whole.



Complimentary close

END TEXT OF LETTER


3. (SBU) NOTE: The GoJ is referring to the Doha Round "Swiss
Formula" for reducing tariffs across the board, which a GoJ
trade official told Econoff was estimated to reduce customs
revenues to the government by 40 percent if implemented
according to the current formula. Last year, Jordan
collected about 275 million Jordanian Dinars ($388 million)
in revenues from customs tariffs, or 10.7 percent of all
government revenues. COMMENT: Due to the high price of
subsidized oil, Jordan has a severe budget deficit problem
and would likely find it difficult to make up the revenues
lost from significantly reduced customs tariffs. In
addition, the government does not have the technical
expertise to accurately assess the macroeconomic impact of
tariff reductions on Jordan's economy. END COMMENT.


4. (SBU) Jordan joins Turkey and four other nations at the
WTO in promoting the textiles harmonization initiative,
whereby certain garment line items are not reduced and others
are, in an exercise to maintain an equivalent "average"
reduction in such tariffs. Jordan seeks to maintain the
tariff advantage for certain garment tariff items under the
preferential treatment offered by the U.S.-Jordan Free Trade
Agreement. COMMENT: In the difficult current Jordanian
economic context, the GOJ's desire to maintain at least some
portion of the 55,000 jobs in the garment sector that have
been created due to the FTA preferential treatment is
understandable, notwithstanding the USG goal to move to a
tariff-free regime over time. END COMMENT.
Rubinstein