U.S.-Jordan Free Trade Agreement (CRS Report for Congress)
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| Release Date |
Revised Dec. 13, 2001 |
| Report Number |
RL30652 |
| Report Type |
Report |
| Authors |
Joshua Ruebner, Foreign Affairs, Defense, and Trade Division |
| Source Agency |
Congressional Research Service |
| Older Revisions |
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Summary:
On June 6, 2000, President Bill Clinton and King 'Abdullah II announced that the United States
and
Jordan would begin negotiations for a bilateral free trade agreement (FTA). The two sides signed
the FTA on October 24, 2000, and President Clinton submitted the FTA to the 107th Congress on
January 6, 2001. Bills to implement the FTA were introduced in the Senate ( S. 643 )
on March 28, 2001, and in the House ( H.R. 1484 ) on April 4, 2001. H.R. 2603 (Thomas) and S. 643 (Baucus) were reported out of the House Ways and Means
and Senate Finance Committees on July 26. H.R. 2603 was passed in the House, by
a voice vote, on July 31, and in the Senate by a voice vote on September 24. It became law as P.L.
107-43 on September 28, 2001.
In the past, Congress has shown an interest in developing free trade relations between the
United States and select Middle East countries. In 1985, Congress approved the U.S.-Israel FTA and
amended it in 1996 to include the West Bank and Gaza Strip as well as qualifying industrial zones
(QIZs) between Israel and Jordan, and Israel and Egypt. Since 1994, when Jordan and Israel signed
a peace treaty, Congress and the Clinton Administration also undertook several initiatives designed
to assist the Jordanian economy. These initiatives included increased levels of foreign assistance,
debt forgiveness, and the QIZ program.
In addition to covering traditional reductions in barriers to trade in goods and services, the FTA
also deals with other issues that became part of the U.S. trade policy agenda during the Clinton
Administration such as intellectual property rights (IPRs), e-commerce, and labor and environmental
standards. The inclusion of labor and environmental standards within the text of the FTA has
provoked disagreement between those with differing visions of what should be included in future
U.S. FTAs.
The volume of bilateral trade between the United States and Jordan throughout the 1990s was
consistently modest. Many top Jordanian exports to the United States already enter the United States
duty-free through various programs, and cereals-- the top U.S. export to Jordan--already face low
or zero-level tariff rates. Therefore, a free trade agreement is unlikely to have an immediate and
dramatic impact on the volume of bilateral trade. However, Jordanian exports of textiles and apparel
to the United States, as well as U.S. exports to Jordan of various commodities that face moderately
high Jordanian tariffs, could expand under an FTA.
In addition to a modest increase in the bilateral trade of goods, a U.S.-Jordan FTA could have
several economic and political implications. These include the possibility of increased levels of
trade in services, greater foreign direct investment (FDI) to Jordan both from U.S. and foreign-based
companies, and reinforced momentum for further economic reform in Jordan. If approved by
Congress and the Jordanian parliament, the U.S.-Jordan FTA will also mark the first U.S. free trade
agreement with an independent Arab country, thereby reflecting the strength of U.S.-Jordanian
bilateral relations and the importance that the United States attaches to these relations.
