Jordan Free Trade Agreement

In 2009, the United States and Jordan continued to benefit from their extensive economic partnership. A key element of this relationship is the United States-Jordan Free Trade Agreement, which was fully implemented on January 1, 2010. In addition, the Qualifying Industrial Zones (QIZs), established by Congress in 1996, allow products to enter the United States duty-free if manufactured in Israel, Jordan, Egypt, or the West Bank and Gaza. The program has succeeded in stimulating significant business cooperation between Jordan and Israel.

Together these measures have played a significant role in boosting overall United States-Jordanian economic ties. U.S. goods exports were $1.2 billion in 2009, up 27 percent from 2008. QIZ products still account for more than half of Jordanian exports to the United States, but the QIZ share is declining relative to total products shipped under the FTA. This shift toward exporting products manufactured outside of the QIZs demonstrates the important role the FTA plays in helping Jordan diversify its economy.

The United States-Jordan FTA has expanded the trade relationship by reducing barriers for services, providing cutting-edge protection for intellectual property, ensuring regulatory transparency, and requiring effective labor and environmental enforcement. The central oversight body for this Agreement is the United States-Jordan Joint Committee. The two sides met in December 2009 to exchange views on economic conditions in both countries and to discuss the development of bilateral cooperation in areas including: general economic cooperation, investment, agriculture, innovation, IPR protection and enforcement, customs issues, environmental and labor issues, and capacity building. The United States encouraged Jordan to focus on developing a strategy over the next 10 years to build on the success of the FTA, including increasing public awareness in Jordan on how to access FTA benefits and enhancing SME cooperation through the FTA.

Both governments acknowledged the progress and collaborative work that has taken place since the last meeting of the Joint Committee in Washington, DC which was held in October 2008. The Jordanian government removed barriers to U.S. meat and poultry exports while in turn the United States completed a number of food safety reviews that would allow for the importation of certain horticultural products from Jordan.

The two sides also reviewed the past year's activities under the Plan of Action developed in the October meeting of the Joint Committee in Washington, DC. As part of that discussion, officials committed to explore ways to intensify joint work on environment, labor and other issues. Jordan agreed to include the United States in consultations on its environmental law and proposed amendments and arranged for a set of outreach sessions on the margins of the meeting with key environmental stakeholders.

The discussion on labor issues during the Joint Committee meeting built upon a USTR-led mission to Jordan in September 2009. During the visit, U.S. government officials from USTR and the Departments of Labor and State joined with officials from Jordan’s Ministry of Labor to hold a meeting of the Labor Subcommittee that was created by the FTA Joint Committee in 2006. In addition to extensive meetings with Jordanian government officials, the U.S. delegation met with representatives from labor unions and worker rights advocates as well as business groups. During the mission, U.S. officials visited factories located in QIZs to monitor working conditions and urge the government of Jordan to continue making improvements on labor rights issues, especially with regard to migrant workers in the apparel factories.

To support this effort, the United States and Jordan are funding an International Labor Organization Better Work program, which will observe working conditions in garment factories and issue public reports. The project was launched in 2008, and began monitoring activities in QIZ factories in 2009.