Jordan Times
Monday, November 8, 2004
Jordan welcomes US' MEFTA
By Rami Abdelrahman
AMMAN — Jordan on Sunday welcomed a US trade initiative that, if fully
implemented, would mean increased economic integration between Middle East
countries.
Meeting yesterday with a US House Ways and Means
Committee delegation, Minister of Industry and Trade Ahmad Hindawi said that
despite the exclusivity provided by Jordan's own Free Trade Agreement and
Qualified Industrial Zone Agreement with US, the proposed Middle East Free Trade
Agreement (MEFTA) would provide value-added as other countries acquire similar
trade status.
“We believe that if more Arab countries sign FTAs with the US, it would be a
better reason for economic integration [among Arab countries] instead of
competing against each other,” Hindawi said. The US delegation expressed
satisfaction with the minister's view.
President George W. Bush proposed last year the free trade initiative that
offers a US vision of openness, trade integration and economic development for
the Middle East.
The initiative stipulates that the US would support World Trade Organisation (WTO)
membership for those “peaceful countries in the region that seek it” as a step
towards achieving full integration of the nations of the Middle East within the
global trading system.
A two-year regional study on economic integration conducted by the Centre for
Strategic Studies indicated that regional business leaders have no objection at
all in engaging in such initiatives. The study, conducted between 2001 and 2003,
also showed that the main actors in Arab public and private sectors do not
realise the potentialities and opportunities of increasing regional cooperation.
Bill Thomas (R-California), who is heading the delegation that groups five
members of the committee, said the US would like to see Jordan play a leading
role to help regional countries develop their own legal systems to join WTO
members and share FTAs with the US.
According to the MEFTA initiative proposal, the US will expand the Generalised
System of Preferences (GSP) programme to increase its trade links with the
Middle East.
GSP provides duty-free entry to the US market for around 3,500 products from 140
developing economies, including six regional countries and the West Bank.
According to the draft, the US would offer to negotiate Trade and Investment
Framework Agreements (TIFAs) that establish a framework for expanding trade and
resolving outstanding disputes. In addition to negotiating new agreements, the
US would offer to enhance TIFAs already reached with Bahrain, Morocco, Egypt,
Tunisia and Algeria.
Also, the US would offer to negotiate Bilateral Investment Treaties (BITs) with
interested countries. By obligating governments to treat foreign investors
fairly and offering legal protection equal to domestic investors, a BIT signals
that a country is a safe place to do business.
Under MEFTA, the US will negotiate comprehensive free trade agreements. It has
signed a FTA with the Kingdom and is currently negotiating a similar deal with
Morocco. The US government is also consulting with Congress about launching
negotiations with Bahrain. Then, the US will seek to negotiate agreements with
other countries.
Eventually, these bilateral FTAs will be expanded into sub-regional free trade
agreements by bringing in willing countries that demonstrate a commitment to
economic openness and reform.
Jordanian exports to the US rose from JD5.6 million in 1998, to top JD424.3
million last year — the bulk of which (JD392 million) was garments and apparel
produced in Qualified Industrial Zones.