VZCZCXRO6228
RR RUEHBC RUEHDA RUEHDH RUEHKUK
DE RUEHAM #0232 0241354
ZNR UUUUU ZZH
R 241354Z JAN 10
FM AMEMBASSY AMMAN
TO RUEHC/SECSTATE WASHDC 6746
INFO RUCNRAQ/IRAQ COLLECTIVE

UNCLAS AMMAN 000232 
 
SIPDIS 
SENSITIVE 
 
STATE FOR NEA/ELA, NEA-I, AND EEB 
 
E.O. 12958: N/A 
TAGS: ECON ETRD PREL JO IZ
SUBJECT: JORDANIAN PRESS LAUDS ENTRY INTO FORCE OF FREE TRADE 
AGREEMENT WITH IRAQ; OFFICIALS DOWNPLAY SIGNIFICANCE 
 
REFS: A) 09 Amman 2671 
-     B) 09 Amman 1955 
-     C) 09 Amman 1177 
-     D) 09 Amman 672 
-     E) 09 Amman 226 
 
¶1. (SBU) The Jordanian press has recently been reporting stories 
about the "breakthrough" Iraq-Jordan Free Trade Agreement (FTA) 
entering into effect in January 2010, suggesting the Iraq-Jordan FTA 
represents a major step toward restoring pre-2003 trade ties between 
the two countries.  Ministry of Industry and Trade (MOIT) officials 
confirmed to EmbOffs that the Government of Jordan (GOJ) signed an 
FTA with Iraq in September 2009, but explained the agreement had no 
defined timeline for implementation and was still awaiting 
ratification by the legislative and executive authorities of both 
countries.  The officials, however, reported that they were not 
concerned about this "vagueness" because both countries had 
previously signed a regional waiver of tariffs in January 2005, and 
therefore the FTA was merely a du jure documentation of an already 
existing practice.  MOIT officials went on to explain that the 
purpose of this FTA was to ensure that both countries were 
in-compliance with the Greater Arab Free Trade Agreement (GAFTA), to 
which both countries are signatories and which requires members to 
establish favorable, reciprocal trade agreements. 
 
¶2. (U) Regardless of the FTA, MOIT officials noted that trade with 
Iraq experienced significant increases in 2008 and 2009, making Iraq 
one of Jordan's top five export destinations, with an estimated USD 
800 million worth of exports to Iraq in 2009 (ref B).  They further 
noted that 2009 decreases in U.S. demand for garments manufactured 
in Jordan's Qualifying Industrial Zones (QIZs) and the related 
decrease in Jordanian exports to the U.S. further increased the 
statistical standing and importance of Iraq as a trading partner 
(refs C, D, and E). 
 
¶3. (SBU) The media is optimistic the FTA will further strengthen 
commercial ties.  Prior to 2003, Jordan had a broad trade 
relationship with Iraq, which included the purchase of oil at 
concessionary prices.  Notwithstanding the increases of the past two 
years, trade has been hampered, in part, by the GOJ's strict border 
control measures to control migration and tighten security following 
the 2005 Amman hotel bombings, lack of infrastructure in Iraq, and 
reluctance by Jordanian firms to reestablish themselves in Iraq. 
 
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