- The Washington Times - Wednesday, February 21, 2001

The United States has squelched efforts by Jordan and Iraq to negotiate a free-trade agreement even as tensions between the United States and Saddam Hussein's regime reached a new high.

Talk of a Jordan-Iraq deal also came at the same time that Congress had before it a recently concluded agreement to strengthen commercial ties between Jordan and the United States, one the Bush administration has not yet agreed to support.

Successive reports in official Jordanian news sources indicated that the kingdom would seek a free-trade agreement with Iraq during a Feb. 3 trade mission to Baghdad, but the idea now appears to be on hold.

"We have made clear our concerns about a Jordanian free-trade agreement with Iraq," State Department spokesman Greg Sullivan said. "And we're sure they agree that a free-trade agreement with the United States represents a very important step forward economically for Jordan."

The United States was concerned enough about the prospect of closer Jordanian-Iraqi economic ties to raise it at the highest levels late last month.

Secretary of State Colin Powell told his Jordanian counterpart, Abdulilah Al-Khatib, during a visit to Washington on Jan. 30 that the United States opposes a Jordanian deal with Iraq, especially as the Congress considers the American pact with Jordan.

Official Jordanian news sources had indicated in successive accounts that a negotiation, enthusiastically supported by the private sector, was currently under way.

The Jordan Times, an official English-language newspaper, reported that, after a Feb. 3 visit by Jordanian Trade and Industry Minister Wasif Azar to Baghdad, the proposed accord was "still under negotiation."

Jordanian Prime Minister Ali Abu Ragheb had announced on Jan. 29 that Mr. Azar would visit Baghdad to conduct talks on a free-trade zone with Iraq, according to Western news media accounts.

But Jordan's ambassador to the United States, Marwan Muasher, said in a written statement that "any discussions on the issue of a free-trade agreement with Iraq will not be conclusive at this stage."

The Clinton administration concluded a free-trade agreement with Jordan last fall and submitted it to Congress for approval. The deal would eliminate barriers to commerce between the two countries over 10 years.

U.S. exports to Jordan are worth about $276 million each year, so the pact is likely to have a negligible effect on the enormous U.S. economy. But it could prove a boon to Jordan, which sells the United States only $11 million in goods each year and could see dramatic increases in its exports of textiles and apparel.

The agreement is currently in limbo because the Clinton administration also included provisions regarding labor and environmental standards, a step that Republicans have generally opposed but were not able to stop in this matter.

As a result, the Bush administration has refused to commit its support to the deal with Jordan. U.S. Trade Representative Robert Zoellick said at his confirmation hearing that the administration would need time to study the labor and environmental rules before agreeing to support it.

If concluded, a Jordan-Iraq deal would have come at a time when efforts to isolate Iraq are falling apart across the board. The Arab world condemned the American and British air strikes on Iraq, while European allies offered at best lukewarm support.

A free-trade accord with Jordan would mark only the latest Iraqi effort to break the economic stranglehold imposed by a decade of United Nations sanctions that were triggered by its invasion of Kuwait.

Egypt has concluded a free-trade pact with Iraq, though it contains the important proviso that it does not take effect until the U.N. sanctions are lifted.

"That said, we're still not thrilled," Mr. Sullivan said.

Jordan also recently renewed an agreement that lets it conduct roughly $450 million in trade with Iraq consistent with U.N. sanctions. That deal lets Iraq supply Jordan with oil in exchange for goods approved by the U.N. committee that administers the sanctions.

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