President Clinton and Jordan’s King Abdullah today plan to sign a comprehensive free-trade agreement that includes precedent-setting labor-rights rules, even as the two leaders face a disintegrating peace process in the Middle East.
The United States and Jordan agreed to pursue a trade-liberalizing deal in June during a visit by the Jordanian monarch. The Clinton administration, eager to promote economic stability in the region and reward the country’s economic reforms, wrapped up the pact in only a few negotiating sessions.
“The Jordan agreement is going through what is essentially a final legal scrub today,” U.S. Trade Representative Charlene Barshefsky told reporters yesterday.
The agreement, which will phase out trade barriers over 10 years, is expected to have a negligible impact on the United States economy, but should be a boon to the tiny Jordanian economy, according to the International Trade Commission. U.S. exports to Jordan are worth about $276 million per year, while Jordan sells the United States $11 million in goods each year.
The signing will go ahead even though Jordan has denounced the Israeli use of force against rioting Palestinian civilians, something the United States has pointedly refused to do. A senior U.S. official said that Jordan has been a “stalwart” for peace in the Middle East.
“The whole [trade] agreement is related inextricably to the peace process,” the official said.
Importantly for eventual approval of the agreement, U.S. negotiators convinced Jordanians to include provisions on labor and environmental standards in the agreement, a first in U.S. trade policy and a long-standing demand of organized labor.
“Things have gone in a good direction,” said Thea Lee, a trade specialist with the AFL-CIO. “Labor is not a second-class citizen.”
The agreement was delayed briefly in September when labor and business groups clashed over how extensive the labor and environmental provisions in the agreement would be.
The pact obliges both the United States and Jordan to enforce their own laws in these areas and makes them subject to a dispute-settlement mechanism. But the deal does not spell out precisely what would happen to a country that violates the agreement, U.S. official said.
It also leaves both countries with the freedom to change their labor and environmental laws as they see fit, though it does make a passing reference to international labor standards.
The United States already has a comprehensive free-trade pact with Israel. Some members of the House and Senate also have called for an agreement with Egypt, which, like Jordan, is officially at peace with Israel.
King Abdullah’s commitment to economic reform since coming to power last year has impressed industrialized nations, including the United States, which also supported Jordan’s bid to join the World Trade Organization.
For Jordan, the bilateral agreement holds the promise of greater textile and apparel exports to the United States. American financial services and information-technology companies, as well as farmers, also could see greater shipments to Jordan.