R 191222Z NOV 08
FM USMISSION GENEVA
TO SECSTATE WASHDC 7500
INFO WORLD TRADE ORGANIZATION COLLECTIVE
USDOC WASHDC
DEPT OF AGRICULTURE WASHINGTON DC

UNCLAS GENEVA 000985 
 
 
EEB/TPP/MTAA FOR CRAFT 
USDA/FAS/ITP, MTND 
USDOC FOR ITA 
 
E.O. 12958: N/A 
TAGS: ETRD WTRO USTR JO
 
SUBJECT:    November 2008 Trade Policy Review of Jordan 
 
¶1.  SUMMARY:  WTO Members conducted the Trade Policy Review of 
Jordan on November 10 and 12, 2008.  Jordan's Minister of Industry 
and Trade Al-Hadidi stressed the importance the country attaches for 
its first TPR and stated its top priority is to improve its business 
climate in order to unleash its growth potential.  Al-Hadidi stated 
that Jordan is developing a national trade strategy to further 
diversify exports, a new industrial policy to increase the 
competitiveness of SMEs, and a new investment strategy to streamline 
administrative procedures.  Other Members highlighted the importance 
of FDI in Jordan's economy and the need to further improve the 
business climate to encourage more investment.  Canada and the EC 
both spoke favorably about Jordan's recent progress in GPA accession 
and criticized Jordan's SPS measures relating to beef imports.  END 
SUMMARY. 
 
Statement of the United States 
 
¶2.  The representative of the United States made the following 
remarks: 
 
¶3.  "Thank you, Chair.  The United States is pleased to participate 
in Jordan's first Trade Policy Review (TPR) since it joined the WTO 
in 2000.  The U.S. delegation warmly welcomes Jordan's Minister of 
Industry and Trade Amer Al-Hadidi, Ambassador Breizat, and the rest 
of Jordan's delegation.  The government of Jordan's informative 
report helped us understand developments in Jordan's trade policy 
regime and practices since its WTO accession.  The Secretariat's 
report was similarly informative and comprehensive.  I would also 
thank Mr. Teepu Khan (of Pakistan) for his meaningful contributions 
as discussant." 
 
¶4.  "The United States and Jordan have enjoyed close relations for 
six decades, with 2009 marking the 60th anniversary of such ties. 
United States-Jordan cooperation spans many of the economic and 
security issues confronting the Middle East and the world." 
 
¶5.  "Since 1952 the United States has worked closely with Jordan to 
improve the lives of Jordanian citizens.  U.S. total development 
assistance exceeds $5 billion (since 1952) and has funded a range of 
projects such as health care, education, construction to increase 
water availability, and support for microeconomic policy shifts 
toward the free market.  Jordan signed a Threshold Agreement with 
the Millennium Challenge Corporation (MCC) in October 2006, and the 
MCC subsequently deemed Jordan to be eligible for a Compact 
Agreement in recognition of the country's progress on economic, 
social, and political reform indicators.  In December 2007, the MCC 
Board of Directors re-selected Jordan to be eligible for MCC Compact 
funding.  We commend the government of Jordan for this notable 
achievement." 
 
¶6.  "Both the Secretariat's and Jordanian government reports 
indicate that Jordan is pursuing a strategy of trade liberalization 
at the multilateral, regional, and bilateral levels.  The United 
States commends Jordan's great strides, following its accession to 
the WTO, to reform its economy and liberalize its trade regime.  As 
the Secretariat notes, Jordan's economy has shown resilience in a 
challenging external environment and is likely to remain vulnerable 
to international prices for energy and food.  But, the Secretariat 
notes, Jordan is addressing these and other structural problems 
(including water shortage) through a policy agenda in which 
privatization, investment, and trade liberalization play key roles. 
This is a policy direction that the United States welcomes and 
encourages.  Jordan developed a new energy strategy in 2007 that 
aims to develop more indigenous and renewable energy sources, 
including oil shale, nuclear energy, wind, and solar power.  Fuel 
subsidies were eliminated in 2008.  We recognize the value of these 
formidable efforts, especially for a small economy so dependent on 
external resources." 
 
¶7.  "The U.S.-Jordan Free Trade Agreement (FTA) entered into effect 
in December 2001.  It was the United States' third free trade 
agreement, and the first ever with an Arab state.  The Jordan FTA 
achieves significant and extensive liberalization across a wide 
spectrum of trade issues.  It will eliminate all tariff and 
non-tariff barriers to bilateral trade in virtually all industrial 
goods and agricultural products within ten years." 
 
¶8.  "The United States and Jordan have gained from our expanding 
economic relationship.  Looking back to 1999, at a time when the 
United States was working to support Jordan's accession to the WTO, 
Jordan's goods exports to the United States were $31 million.  Our 
bilateral goods trade that year totaled $307 million.  By 
comparison, our total bilateral goods trade in 2007 totaled $2.2 
billion, a 500 percent increase over 1999." 
 
¶9.  "U.S. goods imports from Jordan totaled $1.3 billion in 2007, a 
6.6 percent decrease ($93 million) from 2006.  But, U.S. goods 
imports from Jordan are up 480 percent from their 2001 Pre-FTA 
level.  We note that since the FTA's implementation, non-textile FTA 
exports from Jordan continue to grow, topping more than $150 million 
in 2007.  The growth in Jordan's FTA exports demonstrates the FTA's 
important role in helping Jordan diversify its economy. 
Furthermore, the Jordanian Government reports that more than 50,000 
jobs have been created by Jordan's expanding trade with the United 
States; and foreign direct investment, hugely important to Jordan's 
economic growth, rose from more than $600 million in 1995 to greater 
than $2 billion in 2007." 
 
¶10.  "While the FTA is a key part of the United States-Jordan 
economic relationship, it is just one component of close bilateral 
economic cooperation that began in earnest with joint efforts on 
Jordan's accession to the WTO in 2000.  U.S. efforts to support 
Jordan's rapid and successful WTO accession were followed on the 
bilateral front by the conclusion of the United States-Jordan Trade 
and Investment Framework Agreement and a Bilateral Investment 
Treaty. Agreements like these help bolster Jordan's efforts to 
diversify its economy and promote growth, and at the same time 
reduce reliance on exports of phosphates, potash, and textiles; 
overseas remittances; and foreign aid.  The government of Jordan has 
emphasized information technology (IT) as a growth sector.  In fact, 
as the government states, Jordan has signed the WTO Information 
Technology Agreement (ITA).  Tourism is seen as another promising 
growth sector." 
 
¶11.  "As the Secretariat suggests, 'Jordan could gain from further 
dismantling its tariff and non-tariff barriers to trade. 
Rationalization of the MFN tariff through the reduction of tariff 
bands and rates should help reduce the distortions that result from 
Jordan's proliferating investment incentives regime.  Furthermore, 
Jordan is subsidizing exports through income tax exemptions.'  We 
take this opportunity to remind Jordan of the WTO General Council 
decision to grant a conditional extension for maintaining these 
export subsidies until 2015 at the latest.  This deadline is 
serious, and we hope that Jordan and others are taking preparatory 
steps now to honor that deadline." 
 
¶12.  "The government, in its report, states that 'Integration with 
the international trading system is ...an important element of 
Jordan's overall economic growth strategy.'  This is a welcome 
statement, as is the statement that the 'Government of Jordan 
recognizes and supports the importance of maintaining and 
strengthening the central role of the WTO in coordinating trade 
policies of its Members.' I would like to commend Jordan for its 
efforts in negotiating accession to the Plurilateral Agreement on 
Government Procurement.  We appreciate the progress that has been 
made in its GPA accession and are hopeful that it can be completed 
this year.  Jordan's accession will demonstrate the flexibilities of 
the revised GPA for developing countries.  We are, of course, 
willing to continue to work with you to complete your accession.  On 
intellectual property rights, we appreciate the effort that the 
Government of Jordan has made to update its copyright legislation to 
strengthen its protection and enforcement.  We urge Jordan to 
undertake the same efforts for trademark legislation." 
 
¶13.  "Finally, we note that the Government of Jordan 'considers the 
success of the DDA negotiations as paramount for its own prosperity 
and for the region's and the global economy's prospects'.  Let me 
say that the United States will continue to work with Jordan to 
strengthen and deepen our relationship and to achieve an ambitious 
result in the Doha negotiations.  That is, a result that includes 
new market access in services, industrial goods and agriculture, 
which could further enhance opportunities for Jordan to expand its 
exports and its export markets.  The United States looks forward to 
working with Jordan toward bringing the Round to a successful 
conclusion.  And we wish you a successful TPR.  Thank you." 
 
Chairperson's Summary Remarks 
 
¶14.  The Chairman, Ambassador Agah of Nigeria summarized the meeting 
as follows: 
 
¶15.  "This first Trade Policy Review of the Hashemite Kingdom of 
Jordan has allowed us to improve our understanding of its trade and 
related policies, and the developments since its accession to the 
WTO in 2000.  Our discussions have greatly benefited from the 
participation of H.E. Amer Al-Hadidi, Minister of Industry and 
Trade, and his delegation.  We are also grateful for the 
contribution of our discussant, Mr. Teepu Khan, and for the full 
engagement of many Members." 
 
¶16.  "Members commended Jordan on its impressive economic 
performance in spite of a challenging external environment.  High 
real GDP growth, relatively low inflation, and a declining public 
debt are the fruits of an ambitious economic reform programme 
centred on structural reforms and trade liberalization. While 
Jordan's measures to liberalize its investment regime were welcomed, 
it was also noted that foreign investment remains restricted in 
certain activities, notably transport services.  Members encouraged 
Jordan to improve its business environment, strengthen 
competitiveness and further open up its economy, with a view to 
diversifying it." 
 
¶17.  "Members recognized Jordan's commitment to the WTO, including 
the current round of trade negotiations.  They also acknowledged 
Jordan's participation in various regional and bilateral trade 
agreements.  It was noted that the reduction of bound tariff rates, 
and further simplification and rationalization of Jordan's tariff 
regime should contribute to better resource allocation.  Some 
Members encouraged Jordan to reform its government procurement 
regime, and looked forward to its accession to the plurilateral 
Agreement on Government Procurement.  Clarification was sought on 
why a penalty is charged at customs when importers fail to present 
an importer card and as to why not all importers were eligible for 
an importer card." 
 
¶18.  "A number of concerns were also raised, notably with regard to 
certain aspects of Jordan's SPS regime, compliance with notification 
obligations under the WTO, customs procedures (including customs 
formalities), import prohibitions and licensing, price controls, and 
internal taxation.  Members also asked questions with respect to 
technical barriers to trade;  intellectual property;  agriculture; 
energy;  manufacturing (including textiles and clothing);  and 
services.  Jordan was reminded of its commitment to phase out export 
subsidies by 2015 at the latest.  Some Members also urged that 
trade-related technical assistance be provided to Jordan." 
 
¶19.  "Members expressed their appreciation for the responses 
provided by the Jordanian delegation to questions that were posed 
during the review exercise, and looked forward to receiving written 
answers to any outstanding questions within one month." 
 
¶20.  "In conclusion, Members congratulated Jordan on the positive 
economic results it has achieved since its WTO accession.  They 
encouraged Jordan to pursue its reforms and improve its multilateral 
commitments on goods and services, with a view to enhancing the 
transparency and predictability of its trade regime, and adherence 
to WTO principles.  Members could help by keeping their markets open 
for products and services of interest to Jordan." 
 
¶21.  "Once again, I thank Members for their active participation in 
the first Trade Policy Review of Jordan and the Secretariat for the 
excellent report.  I also thank the interpreters for their usual and 
efficient good work." 
 
ALLGEIER