Identifier
Created
Classification
Origin
07AMMAN3814
2007-09-13 14:42:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Amman
Cable title:  

UPDATE ON U.S.-JORDAN TRADE ISSUES

Tags:  ETRD ECON EAGR WTRO JO 
pdf how-to read a cable
VZCZCXRO6683
RR RUEHBC RUEHDE RUEHKUK RUEHROV
DE RUEHAM #3814/01 2561442
ZNR UUUUU ZZH
R 131442Z SEP 07
FM AMEMBASSY AMMAN
TO RUEHC/SECSTATE WASHDC 0312
INFO RUEHEE/ARAB LEAGUE COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHRC/USDA WASHDC
UNCLAS SECTION 01 OF 02 AMMAN 003814 

SIPDIS

SENSITIVE
SIPDIS

STATE PLEASE PASS TO USTR (NED SAUMS, JEAN GRIER)
STATE FOR EEB, NEA/RA, AND NEA/ELA
CAIRO FOR AGCOUNS

E.O. 12958: N/A
TAGS: ETRD ECON EAGR WTRO JO
SUBJECT: UPDATE ON U.S.-JORDAN TRADE ISSUES

Refs: A) Pisani-Grier Email 9/10/07
B) Pisani-Saums Baltzan Email 6/15/07
C) 06 Amman 7770
D) 06 Amman 7676
E) 03 Amman 8359

SENSITIVE BUT UNCLASSIFIED. NOT FOR DISTRIBUTION OUTSIDE USG.

UNCLAS SECTION 01 OF 02 AMMAN 003814

SIPDIS

SENSITIVE
SIPDIS

STATE PLEASE PASS TO USTR (NED SAUMS, JEAN GRIER)
STATE FOR EEB, NEA/RA, AND NEA/ELA
CAIRO FOR AGCOUNS

E.O. 12958: N/A
TAGS: ETRD ECON EAGR WTRO JO
SUBJECT: UPDATE ON U.S.-JORDAN TRADE ISSUES

Refs: A) Pisani-Grier Email 9/10/07
B) Pisani-Saums Baltzan Email 6/15/07
C) 06 Amman 7770
D) 06 Amman 7676
E) 03 Amman 8359

SENSITIVE BUT UNCLASSIFIED. NOT FOR DISTRIBUTION OUTSIDE USG.


1. (U) This message contains action request for State, USDA, and
USTR; please see paragraphs 5, 7, 10, and 15.


2. (U) Summary: The Government of Jordan (GOJ) seeks responses to
several trade proposals under the rubric of the U.S.-Jordan Free
Trade Agreement (FTA),as well as flexibility on a few multilateral
trade issues. The GOJ would like to receive a response on its
proposal for regional rules-of-origin cumulation, and begin the
process of USDA pest risk analysis for Jordan's strawberries. The
GOJ plans to participate in the October meeting of the Government
Procurement Agreement (GPA) Committee, and intends to submit to USTR
a revised offer for informal review by September 21. Jordan would
also like flexibility in the upcoming World Trade Organization (WTO)
negotiations in agriculture. The Ministry of Industry and Trade
(MOIT) continues to examine the Caterpillar case, agreeing that the
producer's sales agent does not need to be in the United States but
indicating that the company may not have provided sufficient
documentation to prove that the goods did not enter the commerce of
an intermediate country. Post requests proposals for the date of
the next JC meeting to take place in Washington. End Summary.

Regional Cumulation of Origin
--------------


3. (U) During a September 11 meeting with Econoff, Maha Ali,
Director of the Foreign Trade Policy Directorate in MOIT, discussed
various trade policy issues, many of which were raised during the
September 2006 Joint Committee (JC) meeting for the U.S.-Jordan FTA
and require USG action (Ref C). Per Ref C and the October 10, 2006
letter to A/USTR Donnelly by former Minister of Industry and Trade
Sharif al-Zu'bi, MOIT continues to request feedback on the Jordanian
concept paper on regional cumulation of origin submitted within the
context of the JC. Specifically, the GOJ has proposed
implementation of Article 13 of Annex 2.2 of the FTA through

introducing a cumulation regime covering the United States, Jordan
and other Middle East and North African (MENA) countries under which
materials that are products of these countries would be counted for
purposes of satisfying the origin requirement under the FTA. At a
later stage, countries in other regions, such as Singapore, with
which Jordan has a Free Trade Agreement, could be considered in the
regional cumulation regime.


4. (SBU) Ali also indicated that Jordan and Israel have been
discussing possible negative consequences for the Israeli-Jordanian
trade relationship and its ancillary political benefits if the QIZ
concept peters out in 2010, when tariffs will be zeroed out under
the U.S.-Jordan FTA (see Ref E). To address these concerns, Ali
said that Israel and Jordan plan to submit a joint letter to the USG
regarding cumulation of content in Jordanian goods with Israeli
inputs.


5. (U) ACTION REQUESTED: Post requests an update on the status of
the USG review of the regional cumulation proposal and any related
talking points, particularly with regards to the issue outlined in
paragraph 4.

Request for USDA Pest Risk Analysis
--------------


6. (U) As proposed in the JC, Ali noted that Jordan agreed to give
strawberries priority as the first commodity to undergo the detailed
pest risk analysis (PRA - Ref D). She requested that USDA begin the
PRA process as soon as possible, noting that such certification is
key for accessing the U.S. market, diversifying exports, and
attracting investment. Post's Foreign Agricultural Service (FAS)
Specialist has also received multiple inquiries from other GOJ
interlocutors, including the Economic Advisor at the Royal Hashemite
Court, as to what is hindering this process.


7. (U) ACTION REQUESTED: Post requests that USDA follow up with
APHIS Center for Plant Health Science and Technology and the
Jordanian Ministry of Agriculture to initiate the PRA process.

Caterpillar Case
--------------


8. (SBU) Per Ref A, the U.S. company Caterpillar has raised
concerns about the Jordan Customs Department's (JCD) denial of FTA

AMMAN 00003814 002 OF 002


preferential treatment for U.S.-origin goods that have been shipped
out of regional offices, particularly in Europe. Mahmood
al-Rashdan, the Head of Trade Agreements and Rule of Origin Section
in JCD, told Econoff June 12 that the Customs House verbally denied
entry on the basis of Article 8(c)(ii) in Annex 2.2 of the FTA,
claiming that the shipping documents did not list Jordan as the
final destination, the producer's sales agent must be in the United
States, and Caterpillar could not provide the necessary
documentation to prove that the goods had not entered the "commerce
of an intermediate country."


9. (SBU) In response to a diplomatic note asking for further GOJ
clarification of the Caterpillar case and similar complaints raised
by other U.S. companies, Ali told Econoff that MOIT determined that
the producer's sales agent does not/not need to be in the United
States and would instruct JCD accordingly. Ali believes, however,
that there may be grounds for denial if the company cannot provide
the proper documentation to show that the goods have not entered the
commerce of an intermediate country. Ali promised to follow up with
JCD to specify which documents are being required and whether the
requirements would apply to every shipment via an intermediate
country.


10. (U) ACTION REQUESTED: Post requests USTR guidance on
requirements to meet Article 8(c)(ii) in Annex 2.2 of the FTA.

Coming soon: GPA Revised Offer
--------------


11. (U) Ali confirmed that Jordan will attend the next meeting of
the GPA committee in October (Ref A). A national GPA committee is
scheduled to meet on September 16 to review a revised offer based on
the June discussions. Pending committee approval, Ali said Jordan
will provide the draft revised offer to the United States for
review. Ali commented that the MOIT will push for lower off-set
provisions and the other concessions, but the GOJ would not be able
to sign on to a phase-out unless the GPA Committee approves a SME
proposal that would be applied when the thresholds and price
preferences have ended. The USAID-funded SABEQ has offered
assistance with drafting the SME proposal.

Request for Flexibility in WTO Agriculture Negotiations
-------------- --------------


12. (U) Regarding the September WTO negotiations on agriculture and
NAMA (market access for non-agricultural goods),Ali reiterated the
request to give Jordan flexibility in implementing modalities on
specific provisions to cut tariffs, given that Jordan is in the
unique position of having recently acceded to the WTO and being
considered a Small and Vulnerable Economy (SVE). She also indicated
that Jordan supported the U.S. position on food aid, and would like
the possibility of benefiting from both in-kind and cash assistance.


DAMAN Officially Ended
--------------


13. (U) Ali confirmed that the DAMAN pre-shipment inspection
program officially ended September 1, and the GOJ will inform the
WTO accordingly (Ref C). She said that the Jordan Institution of
Standards and Metrology (JISM) plans to implement a new market
surveillance system, pending parliamentary approval of new
amendments to the 2000 Standards and Metrology Law (No. 22),and
would provide more details on the system shortly. COMMENT: Embassy
will follow up with MOIT and JISM to obtain further information on
the system and will report septel. END COMMENT.

Next Joint Committee Meeting
--------------


14. (U) In a previous, separate meeting, MOIT Secretary General
Montaser Oklah told Econoffs that Jordan would not be able to hold
the next Joint Committee meeting until after Ramadan and
parliamentary elections. The earliest possible date would be
December 2007.


15. (U) ACTION REQUESTED: Post requests date proposals for the
next JC meeting in Washington.

Visit Amman's Classified Web Site at
http://www.state.gov.sgov.gov/p/nea/amman/

HALE