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. 
 
¶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