VZCZCXRO7733
PP RUEHBC RUEHDA RUEHDE RUEHDH RUEHIHL RUEHKUK
DE RUEHAM #1053 1261252
ZNR UUUUU ZZH
P 061252Z MAY 09
FM AMEMBASSY AMMAN
TO RUEHC/SECSTATE WASHDC PRIORITY 5034
INFO RUCNRAQ/IRAQ COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS AMMAN 001053 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EEB, NEA/ELA, AND NEA-I 
STATE PLEASE PASS TO USTR (SFRANCESKI) 
 
E.O. 12958: N/A 
TAGS: ETRD ECON EIND ELTN JO IZ
SUBJECT: Exports to Iraq Increased 52 Percent in Early 2009, But 
Primarily Due to Re-exports or Transit Goods 
 
Ref: Amman 672 
 
¶1. (SBU) Jordan's Department of Statistics (DOS) announced exports 
to Iraq rose to JD 117.9 million (USD 166.5 million) for 
January-February 2009, up 52.1 percent from JD 77.5 million (USD 
109.5 million) during the same period in 2008.  This accounted for 
approximately 15 percent of all Jordanian exports, making Iraq the 
largest bilateral  destination for Jordanian exports for that 
period. 
Export categories registering the most significant increases were a 
712,408 percent increase in plastic pipe exports, a 68,807 percent 
increase in plastic polymers, a 12,500 percent increase in metal 
pipes, and a 4,432 increase in personal care items.  Increases in 
exported food items were more moderate with a 1,239 percent increase 
in sweet peppers, 416 percent in canned food items, 345 percent in 
palm oil, 357 percent in beef, and a 270 percent in live poultry. 
 
¶2. (SBU) Ministry of Industry and Trade (MOIT) officials considered 
the increase a positive trend indicative of improving commercial 
ties between Jordan and Iraq.  They also told EconOffs, however, 
that the increase was "insignificant" because much of the trade 
increase was due to re-exported or transit goods, not 
Jordanian-originated products.  DOS figures indicated that Jordanian 
re-exports made up about 63.3 percent of total Jordanian exports to 
Iraq during this period.  Overall, re-exports represent only 23 
percent Jordan's global exports during the January-February 2009 
period). 
 
¶3. (SBU) Haleem Abu Rahmah, Executive Director of the Jordanian 
Exporters Association, concurred with the MOIT, calling the reported 
increases "minimal" and reporting that Jordan lost most of its 
export business to Iraq after the April 2003 fall of Baghdad.  He 
stated that while Iraq, in theory, remains an excellent export 
destination for Jordanian companies, Jordan suffers because the 
current Iraqi Government will not honor protocols signed by Saddam 
Hussein's government giving Jordan priority on exports to Iraq. 
(Note:  Under a previous government-to-government contract, Iraq 
provided Jordan with oil at discounted rates in return for Jordanian 
goods whose export the GOJ encouraged.  End note.)  He also observed 
that Jordanian exporters faced major competition from Iranian and 
Syrian firms because these greater populated countries enjoyed 
"economies of scale," advantages that allowed them to offer lower 
prices to their customers.  He commented that despite improvements, 
the security situation also remained a major obstacle and most 
Jordanian exporters still refuse to physically enter Iraq, thereby 
losing whatever advantage they might enjoy.  He also noted that 
exports to Iraq usually have to be unloaded at the border and 
transferred to Iraqi vehicles, further complicating the process. 
 
¶4. (SBU) President of the Jordanian Union of Truck Owners Abdul 
Kareem Dirabani said his union members had not witnessed any 
tangible increase in demand for their trucks to transport freight to 
Iraq or to the buffer zone between the borders.  In fact, in late 
2008, Jordanian and Iraqi officials met in Amman to dissolve the 
Iraqi-Jordanian Land Transportation Company (IJLTC), a joint venture 
established by the two countries in 1980, which had accumulated 
since 1999 losses of JD 6 million (USD 7.8 million).  Dirabani 
commented that the positive media reports on increased Jordanian 
trade with Iraq was just "feel-good" publicity designed for domestic 
Jordanian audiences. 
 
Visit Amman's Classified Website at: 
http://www.state.sgov.gov/p/nea/amman 
 
BEECROFT