Workshop Provides "How To" Advice on Maximizing the

UNCLAS SECTION 01 OF 02 AMMAN 001765

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TAGS: ETRD ECON EAGR WTRO JO
SUBJECT: Workshop Provides "How To" Advice on Maximizing the
U.S.-Jordan Free Trade Agreement

Ref: A) Amman 813


1. (SBU) Summary: The U.S. Foreign Commercial Service (FCS),in
coordination with the USAID-funded Jordanian Business Development
Center, held a practical workshop June 3-4 for importers and
exporters on how to maximize the U.S.-Jordan Free Trade Agreement
(FTA). Approximately 120 participants from the public and private
sectors attended, including over 80 companies, many of which were
small and medium sized enterprises (SMEs). A U.S. Commerce expert
also gave a separate presentation on rules of origin and harmonized
tariff codes to Jordanian Customs officials, which highlighted some
of the differences between the U.S. and Jordan Customs services. In
particular, Jordan Customs tends to examine goods on a
shipment-by-shipment basis, rather than looking at the importers'
record in totality, and views shipments under the FTA as high risk
for duty evasion that require more in-depth inspections. Extensive
and positive local press coverage of the event highlighted issues of
concern to the business community. End Summary.

FTA Workshop Gives Practical Guidance
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2. (U) The private sector in Jordan has often expressed the need
for more practical training on importing from and exporting to the
U.S. (ref A). In response to such requests, FCS brought together
U.S. and Jordanian trade and customs experts to deliver a workshop
on "How to Maximize the U.S.-Jordan Free Trade Agreement." In
keynote speeches, the Ambassador and Minister of Industry and Trade
Amer Hadidi highlighted the need for Jordanian companies to
diversify exports and to increase consumer and manufacturer choice
through more imports of high quality American goods. The Vice
Chairman of Hikma Pharmaceuticals also shared his company's best
practices in exporting to the U.S., including the need to invest in
order to make money and deliver promised goods on time.


3. (U) U.S. experts included an International Trade Specialist from
the U.S. Export Assistance Center of the Commerce Department, who
reviewed the FTA rules of origin and ways to determine harmonized
tariff codes. The Director of the North Texas International Trade
Center Small Business Development Center advised Jordanian companies
on how to become export-ready and conduct business with the U.S.,
highlighting the need and available tools for in-depth research in
order to better understand the U.S. market. S/he also reviewed the
regulatory environment, and culture. The Chief of the Trade
Operations Entry Branch III at U.S. Customs and Border Protection
(CBP) in Newark also provided practical information for the
processes and types of documents required by CBP when exporting
goods to the U.S. under the FTA.

Cumbersome Jordan Customs Procedures
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4. (SBU) During a presentation by a representative from the Jordan
Customs Department (JCD),many of the private sector participants
who import U.S. goods expressed frustration with the JCD procedures.
Complaints included JCD doing more in-depth inspections for each
FTA shipment, rather than looking at the track record for the
importer. JCD acknowledged that over 50% of shipments under the
FTA, or any of Jordan's other free trade agreements, would be sent
to the "red" lane for extensive document and physical inspections,
while the other 50% would go to the "green" or "yellow" lanes. JCD
explained that there is greater risk that some importers might try
to evade duties by claiming FTA preferential treatment for
non-originating goods that are co-mingled with U.S. origin goods,
which is seen frequently in shipments coming into Jordan.


5. (SBU) In a separate session with the U.S. Commerce and CBP
experts, JCD officials also expressed frustration that the FTA did
not require a certificate of origin, unlike the Jordan-EU

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Association Agreement, which made it more difficult for JCD to
confirm country of origin. While CBP is moving towards a paperless
system, JCD hoped that companies would provide better, hard-copy
documentation, further suggesting that perhaps Chambers of Commerce
in the U.S. could certify origin of goods. JCD also confirmed that,
in contrast to CBP which focuses on the totality of an importer's
record, Jordan Customs functions on an entry-by-entry basis. By
approaching each entry as a unique event with no relation to other
entries or the account as a whole, there is little context for the
issues that arise. Also, because there does not appear to be
significant dialogue with the company, customs officials in the
clearance houses are sometimes unaware of the "normal business
practices" used by multi-nationals, such as warehousing spare parts
in bonded facilities in third countries.

Positive Media Coverage
--------------


6. (U) Local broadcast, print, and online media outlets carried
positive, substantive coverage of the workshop. The coverage and
reporting were dominated by issues of concern to business
professionals. Given that much of the media discussion to date has
been focused on issues of concern to government officials, this
change is a positive one, and may mark a transition in the public
understanding of our economic ties.

Comment
--------------


7. (SBU) Based on the positive feedback received from participants,
the workshop was a success in providing practical information and
opening up new networks for companies interested in exporting from
or importing to the U.S. For example, after participating in the
workshop, the head of the Jordanian furniture association is now
working with FCS to send its members on an International Buyers'
Program in the U.S. Post is considering replicating the seminar in
other parts of the country. The event also highlighted how Jordan
and U.S. Customs approach the import process differently. Although
Jordan Customs has stated that revenue is not a primary concern, it
behaves as a revenue-collecting rather enforcement entity. The
incentive structure also gives bonuses to customs officers who catch
violations, encouraging a high volume of inspections and requests
for documents that do not always seem relevant. The inspection
regime and documentation requirements have often slowed the entry of
U.S. goods and at times, placed Jordan at odds with requirements
under the FTA. Post aims to work with Jordan Customs to effect a
needed change in philosophy so that customs procedures enforce the
law while providing minimal disruption to trade.

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