Free Trade

Background on Middle East Free Trade Area Inititiative (MEFTA)

In May 2003, the President proposed a plan of graduated steps for nations in the Middle East and Mahgreb to increase trade and investment with the United States and others in the world economy. The first step is to work closely with peaceful nations that seek to become members of the WTO in order to expedite their accession. As countries in the region implement domestic reform agendas, institute the rule of law, protect property rights (including intellectual property), and create a foundation for openness and economic growth, the United States is taking a series of graduated steps, tailored to the countries' level of development.

Background on Qualified Industrial Zones (QIZs)

In 1996, Congress authorized designation of qualifying industrial zones (QIZs) between Israel and Egypt, and Isreal and Jordan. The QIZs allow Egypt and Jordan to export products to the United States duty-free if the products contain inputs from Israel. The purpose of this trade initiative has been to support the prosperity and stability in the Middle East by encouraging regional economic integration.

In order for a QIZ article to gain duty-free entry, QIZ factories must add at least 35 percent to the value of the article. This 35 percent minimum content figure can include value-added in Israel, Egypt, or the United States. QIZs must encompass portions of Egypt and Israel, though the areas do not have to be contiguous.

The United States has approved the request of Egypt and Israel to designate three QIZs -- the Greater Cairo QIZ; the Alexandria QIZ; and the Suez Canal QIZ that includes an industrial area of Port Said.

Since 1999, the United States has designated thirteen QIZs in Jordan. The United States and Jordan negotiated a full FTA that Congress approved in 2001. Exports from Jordan to the United States grew from $31 million in 1999 to $674 million in 2003.

QUALIFYING PRODUCT REQUEST EXAMPLE (All quotes in US dollars) A lot of shirts.

November 30, 2000. Jordan, Iraq Agree to Build Oil Pipeline Linking Two Sides

Jordan and Iraq will boost cooperation in the field of energy by building an oil pipeline linking the two sides, Jordanian Prime Minister Ali Abu Ragheb said here on Thursday.

Ragheb said during a meeting with Iraqi President Saddam Hussein that Amman and Baghdad have agreed to build a pipeline for Iraq to export oil to its oil-deficient neighbor, the official Iraqi News Agency (INA) reported.

Iraq, Jordan's only source of crude oil, supplies the kingdom with about 100,000 barrels of oil each day. Jordan currently imports oil from Iraq by land transport.

The Jordanian prime minister did not say when the pipeline will be constructed.

Ragheb said that he held "sincere and fruitful" talks with Saddam, who, for his part, expressed readiness to strengthen cooperation with Jordan "in all fields," INA said.

"Jordan will do its best to help lift economic sanctions on Iraq to end the suffering of the Iraqi people," Ragheb was quoted as saying.

November 12, 2004 Iraq and Jordan have signed an agreement to extend a pipeline for Iraqi crude oil via the Jordanian territories of al-Aqaba Port, along with a holding agreement to increase the volume of oil exchange between the two countries.

After paying a short visit to Jordan and Turkey, Iraqi Minister of Oil H.E. Thamer al-Ghadban said that signing the agreements would further enhance ties with all neighbouring countries, citing that the Jordanian side had expressed preparedness to increase volume of cooperation to serve interests of the both fraternal countries.