VZCZCXYZ0036
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 
 
¶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