- The Washington Times - Thursday, August 3, 2000

The United States and Jordan are close to an agreement that would eliminate most barriers to trade between the two countries and could clinch a deal as early as the fall, U.S. Trade Representative Charlene Barshefsky said this week.

Jordan's economic reforms have laid much of the groundwork for a pact with the United States, which hopes increased trade will inject an element of stability into the Middle East and bolster the regional peace process.

Mrs. Barshefsky, who left Amman yesterday, said the United States and Jordan already have made substantial headway and further talks could iron out the remaining problems by October.

"We won't be initialing or signing anything here, but the progress certainly is sufficiently strong that I don't believe it will require substantial new negotiations," Mrs. Barshefsky said after meeting with Jordan's King Abdullah and other top Jordanian officials.

A free-trade agreement with the United States could help the Jordanian economy which has suffered from sluggish growth and a heavy debt load attract investment from companies that want to export to the American market. It also would phase out duties on textiles and apparel, an important export sector for many developing countries.

U.S. exporters of information technology and agricultural goods and financial-service providers also would benefit from a free-trade pact. In a first for trade agreements, the deal would include a moratorium on duties that might be imposed on electronic commerce, an area in which the 136-member World Trade Organization has only begun to explore, Mrs. Barshefsky said.

Despite the headway made in this week's negotiations, American and Jordanian negotiators still have to resolve sticking points over trade in services and intellectual property, she said.

The push for a free-trade agreement has so far been driven largely by broader foreign policy considerations, especially the need to support Arab states that have backed the Middle East peace process. President Clinton announced plans to negotiate the deal when King Abdullah visited Washington in June.

"A strong, stable Jordan is, as you know, one of linchpins to a more stable Middle East," Mrs. Barshefsky said.

But several U.S. industry sectors, including pharmaceuticals, textiles and apparel, motion pictures, tobacco and soft drinks, have expressed interest in the pact. Trade between the two countries totaled just $287 million, with U.S. exports to Jordan totaling $276 million and imports $11 million.

Pharmaceuticals are the top Jordanian export, and U.S. companies are seeking levels of patent protection that go beyond the international standards that Jordan adopted when it joined the World Trade Organization (WTO) in April after six years of negotiations, according to the Pharmaceutical Researchers and Manufacturers of America.

"A [bilateral] free trade agreement means that the playing field for U.S. firms will be even better," said Susan Kling Finston, the association's assistant vice president for the Middle East and Africa.

At the same time, organized labor, a heavy critic of the Clinton administration's trade policies, has demanded that the pact with Jordan contain provisions protecting basic labor standards, like the right to organize a union. The AFL-CIO also has said the rules should be subject to the same dispute resolution process as the other parts of the agreement on goods and services trade.

"We're being eminently reasonable here," said Thea Lee, the labor federation's assistant director for public policy.

Mrs. Barshefsky said only that the agreement would seek to preserve existing labor and environmental standards. These provisions would give Americans and Jordanians "greater confidence that trade liberalization won't lead to environmental degradation and won't lead to a lessening of the rights of workers," she said.

Jordan's commitment to economic reform, which King Abdullah has pursued aggressively since 1998, smoothed the way for its entry into the WTO, as well as for the bilateral trade negotiations with the United States.

"Jordan is undertaking a series of very substantial economic reforms," she said. "It has moved more rapidly than any other country I can think of in its WTO accession."

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