Jordan 2009 National Trade Estimate

UNCLAS AMMAN 003022


STATE FOR EEB/TPP/BTA AND NEA/ELA
STATE PASS TO USTR FOR GBLUE

E.O. 12958: N/A
TAGS: ETRD ECON EFIN JO
SUBJECT: Jordan 2009 National Trade Estimate

Ref: State 88685


1. Per reftel, below is the text of Jordan's 2009 National Trade
Estimate, also sent, as requested, to USTR as a Microsoft Word
document.


2. Begin Text:

TRADE SUMMARY

The U.S. goods trade deficit with Jordan was $261 million in the
first 11 months of FY 08, a decrease of $248 million from $509
million in the first 11 months of FY 07, owing to an increase in
U.S. exports to Jordan and a decline in imports from Jordan, due, in
part, to a global decline in textile trades. U.S. goods exported in
the same periods of FY 08 and FY 07 were $807.5 million and 724.9
million respectively, representing an increase of 11.4 per cent.
Correspondingly U.S. imports from Jordan were $1.07 billion, down
13.4 per cent. Jordan is currently the 77th largest export market
for U.S. goods.

Note: Source of Data USITC; Rank is based on January - August 2008.


The United States-Jordan Free Trade Agreement
--------------

Under the terms of the United States-Jordan Free Trade Area
Agreement (FTA) which entered into force on December 17, 2001, the
United States and Jordan agreed to phased tariff reductions
culminating in the complete elimination of duties on all products by

2010.

IMPORT POLICIES

Tariffs
--------------

Jordan's simple average applied tariff is approximately 11 percent,
down from 13 percent in 2006, with a maximum rate of 180 percent on
certain agricultural products. Most raw materials and intermediate
goods used in industry have been zero-rated. Tariffs between the
United States and Jordan are being eliminated as per the terms of
the FTA.

The Jordan General Sales Tax law allows the government to impose a
"Special Tax" at the time of importation or local production.

Agriculture
--------------

U.S. agricultural exports to Jordan were $129.6 million in 2007.
Top U.S. agricultural exports consist of grains (corn, rice, and
wheat respectively),soybean cake, processed and canned food,
condiments, vegetable oil, almonds and poultry (both live and
carcasses). Under the terms of the FTA, import duties and other
trade barriers between Jordan and the United States must be phased
out by 2010. Tariffs less than 5 percent have already been
eliminated. Jordan excludes certain imports from the FTA's direct
customs tariff relief, notably poultry, dairy products, and apples.

Certain non-tariff barriers impact U.S. exports to Jordan. Jordan
selectively imposes sanitary and phytosanitary measures on meat and
poultry, effectively creating non-tariff barriers on imports of
these products. In 2006, Jordan banned the importation of beef and
live bovine animals from all U.S. states after the announcement of
the discovery of a single case of Bovine Spongiform Encephalopathy
(BSE) in Alabama. The subsequent partial lifting of the ban was
accompanied by strict conditions that only allow boneless uncooked
and unprocessed meat, in addition to many other limitations that
have proven difficult to meet by both U.S. exporters and Jordanian
importers. Import licenses, or advance approvals to import goods,
are required for specific food and agricultural goods. The
authorities granting such licenses and approvals include the
Ministry of Agriculture, and the Ministry of Health.

Import License and Pre-Shipment Inspection
--------------

In addition to the special requirements for certain agricultural
products, Jordan requires that importers of commercial goods be
registered traders or commercial entities. The Ministry of Industry
and Trade occasionally issues directives requiring import licenses
for certain goods or categories of goods.

Jordan ended in September 2007, a pre-shipment inspection program
(the Daman Program) administered through the Jordan Institute of
Standards and Metrology (JISM) which the United States considered to
be a non-tariff trade barrier. The Daman Program has not been
replaced.

STANDARDS, TESTING, LABELING AND CERTIFICATION

JISM is shifting the focus of its compliance inspection activities
for imported and locally-produced goods from ports of entry to a
market surveillance system. JISM issues and routinely updates
standards for approximately 1,300 products. JISM has licensed
several laboratories to test for compliance with applicable
standards.

JISM's current product standards reflect existing U.S. standards.
Although JISM worked with EU agencies to review its standards and
incorporated new sets of standards, JISM's director has assured the
United States that any changes would not be biased against U.S.
standards, also considered international standards.

JISM also issues and enforces labeling requirements.

GOVERNMENT PROCUREMENT

In 2002, Jordan commenced its accession to the WTO Government
Procurement Agreement (GPA),with the submission of its initial
entity offer. Subsequently, Jordan submitted revised entity offers
in 2004, 2006, and 2007. Currently, foreign investors can bid on
government-commissioned research and development programs for which
international or mixed bidders are eligible. Alternatively, foreign
bidders can bid on such programs with a Jordanian partner. This
requirement will be dropped when Jordan accedes to the GPA.

EXPORT SUBSIDIES

All exporters are granted the following incentives:

-- Net profits generated from most export revenueQare fully exempt
from income tax. The mining sector is excluded, as are exports
governed by specific trade protocols and foreign debt repayment
schemes. Under the WTO, the tax exemption was initially set to
expire on January 1, 2008, but upon the request of Jordan, the WTO
granted an extension through December 2015, subject to an annual
review by the WTO.

-- Foreign inputs used in the production of exports are exempt from
customs duties and sales taxes; all additional import fees are
assessed on a reimbursable basis.

INTELLECTUAL PROPERTY RIGHTS (IPR) PROTECTION

Prior to its accession to the WTO, Jordan passed several new laws to
improve protection of intellectual property rights (IPR),patents,
copyrights, and trademarks. These laws, which were passed to
implement the WTO Agreement on Trade-Related Aspects of Intellectual
Property Rights (TRIPS),now protect trade secrets, industrial
designs, plant varieties and semiconductor chip designs. The IPR
regime requires registration of patents and trademarks. Copyrights
may be registered with the National Library, a part of the Ministry
of Culture, though it is not obligatory and does not affect rights
under the law. New Plant Varieties (NPV) are registered with the
NPV Registrar of the Ministry of Agriculture. Patents must be
registered with the Registrar of Patents and Trademarks at the
Ministry of Industry and Trade. Jordan's cabinet has issued a
decision to join the Patent Cooperation Treaty and the protocol
relating to the Madrid Agreement Concerning the Registration of
Marks, but accession and ratification are still pending.

Jordan's pharmaceutical industry generally abides by the new Patent
Law. In addition, by signing the
FTA, Jordan committed to even stronger enforcement of IPR. It
acceded to the World Intellectual Property Organization (WIPO)
treaties on copyrights (WCT) and performances and phonographs
(WPPT). The United States is working together with Jordan to address
concerns that Jordan needs to strengthen its protection of
undisclosed information against unfair commercial use for
pharmaceutical products, as well as other U.S. concerns regarding
Jordan's implementation of its FTA commitments.

Jordan's record on IPR enforcement has improved. Enforcement
mechanisms and legal procedures, however, are still not fully
effective and are in need of further refinement. As a result, the
government's record on IPR protection remains mixed. Jordan has
worked in 2008 on amendments to its copyright regulations and to the
law governing the organization responsible for trademarks to meet
international obligations and standards. A sizeable portion of
videos and software sold in the marketplace, however, remain
pirated. Enforcement action against audio/video and software piracy
is growing in quantity and improving in its targeting capability,
but successful prosecution of piracy cases remains inconsistent. In
2008, Jordan issued its first software piracy jail sentence. The
number of trademark and copyright violation cases referred to the
courts has also increased. Jordan has been in attendance at several
recent Anti-Counterfeiting Trade Agreement (ACTA) meetings and
continues to discuss formally joining the ACTA negotiation.

SERVICES BARRIERS

As part of its WTO commitments, Jordan agreed to allow unlimited
market access in telecommunications services no later than January

1, 2005. Nevertheless, the now privatized Orange (Jordan Telecom)
still enjoys a de-facto monopoly of land lines and the internet
gateway.

INVESTMENT BARRIERS

The government continues to revamp its investment promotion system.
It is re-examining investment incentives with the consolidation of
all investment promotion activities under a renewed Jordan
Investment Board (JIB). These developments will likely lead to
expanded investment opportunities in Jordan for U.S. investors.

Jordan's investment laws treat foreign and local investors equally,
with the following exceptions (as per regulation No. 54 of 2000,
entitled "Non Jordanian Investments Promotion Regulation"):

-- Under the terms of the United States-Jordan FTA, ownership of
periodical publications is restricted to Jordanian natural persons
or Jordanian juridical entities wholly owned by Jordanians;

-- Under the same agreement, foreign investors are limited to 60
percent ownership in printing/publishing and in aircraft or vessel
maintenance and repair services; and

-- Also under the FTA, foreign investors are limited to 50 percent
ownership in a specified list of businesses and services.

In general, foreign investors may not have whole or partial
ownership of investigation and security services, sports clubs
(except for health clubs),stone quarrying for construction
purposes, customs clearance services, and land transportation of
passengers and cargo using trucks, buses and taxis.

While Jordanian laws set limitations on foreign ownership in certain
sectors, the laws also allow for the government to grant exceptions
to these limitations where it deems appropriate. This exception
policy is viewed as being too selective by some potential U.S.
investors.

The FTA Annex 3.1 has a complete listing of limitations on
investments and may be found at http://www.ustr.gov.

ELECTRONIC COMMERCE

Jordan has some legislation regulating electronic commerce, although
there has yet to emerge a clear body of regulations and tax laws
covering electronic commerce transactions. Legislation that allows
for and regulates electronic signatures is still needed. Jordan does
not impose tariffs on electronic transactions.

End text.

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