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Press Briefing by U.S. Trade Representative Charlene Barshefsky (10/24/00)

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                              THE WHITE HOUSE

                       Office of the Press Secretary

Immediate Release                 October 24, 2000

                              PRESS BRIEFING

             The James S. Brady Briefing Room

3:57 P.M. EDT

     MR. SIEWERT:  As you note, later today, the President will witness the
signing of the U.S.-Jordan Trade Agreement.  Ambassador Barshefsky will
actually sign that agreement, along with the Deputy Prime Minister of
Economic Affairs from the Kingdom of Jordan.  Before that, the President
will meet with King Abdullah in the White House.  We will find some way to
brief you on that and the latest developments on the Mid-East Peace Process

     As I said earlier today, he will be talking to the King about what we
can do to build on the Sharm el-Sheikh summit.  But here to brief on the
trade agreement which, as we said yesterday is path-breaking for its
inclusion of environmental and labor standards within the text of the
agreement is Ambassador Barshefsky.

     AMBASSADOR BARSHEFSKY:  Thanks very much.  Let me just make a few
remarks and then, of course, we'll take questions.

     We are here on a very historic occasion, with the imminent signing of
a U.S.-Jordan Free Trade Agreement.  This is, above all, a tribute to the
leadership of King Abdullah of Jordan as well as President Clinton, who
have long shared a commitment to economic partnership between our nations.

     Let me, if I can, recognize Dr. Halaika, the Jordanian Deputy Prime
Minister, and Cathy Novelli, who is sitting over here in the green, who led
our negotiating team.

     You are all aware, of course, that the U.S. and Jordan has a very
strong diplomatic and political partnership, evident, of course, in our
shared support for Middle East peace.  But we also, particularly in the
last three years, have developed a strong economic partnership.  We had
very close cooperation for Jordan's accession to the World Trade
Organization in April of this year, we've established a unique qualifying
industrial zones program offering duty-free treatment to joint Jordanian
and Israeli industrial projects.  And the Senate, as you may know, last
week ratified the bilateral investment treaty we recently negotiated with

     But the free trade agreement is the capstone of this economic
relationship.  This is a very high-quality agreement, covering every major
trade issue and opening up the full range of trade opportunities.  It is a
vote of confidence in Jordan's economic reform program and will serve as
the source of growth and opportunity for Jordanians in particular in the
coming year.  It also breaks new ground because it is the first agreement
to include questions of trade and the environment, trade and labor and
electronic commerce.  And let me just take you quickly through the major

     With respect to tariffs, all tariffs -- essentially all tariffs will
be eliminated over a ten-year period with respect to trade between the U.S.
and Jordan.  Those tariff cuts will be phased in depending on the size of
the cut.  Even with those tariff cuts, however, the qualifying industrial
zones, as well as our General System of Preferences program, our GSP
program, will continue.

     Second of all, the agreement will result in an open market in
services.  Jordan already enjoys near complete access to the U.S. services
market, but this FTA will open up the Jordanian services market to U.S.
companies in a range of key sectors.  This will include telecom, financial
services, energy distribution, convention services, printing and
publishing, audio-visual, courier services, education, environment, health,
travel, tourism, transport and others.

     Third, intellectual property rights.  The agreement includes the most
up to date standards for intellectual property rights protection anywhere
in the world, in both law and enforcement.  In addition, under the FTA,
Jordan will ratify and implement two new WIPO treaties, the World
Intellectual Property Organization treaties, on copyright and on
performances and phonograms.  As many of you know, these two treaties are
called the Internet Treaties, which we ratified in 1998, but which
establish critical elements for the protection of copyrighted works in the
digital age.  Jordan will now ratify and implement these agreements.

     Fourth, electronic commerce.  This is the first time a free trade
agreement has included concepts of electronic commerce.  Both the U.S. and
Jordan will continue to liberalize their environment for e-commerce,
through commitments on avoiding the imposition of customs duties on
electronic transmissions, by avoiding the imposition of unnecessary
barriers to market access for digitized products, and by avoiding
impediments to the ability to deliver services through electronic means.
These commitments should incur substantial investment in new technologies
and stimulate the innovative use of networks in Jordan, particularly to
deliver products and services.

     Fifth, of course, the question of trade and labor.  Again, for the
first time in the U.S. Trade Agreement, the Jordan FTA will include in the
body of the agreement provisions concerning the relationship between free
trade and the rights of workers.

     These provisions will reaffirm the party's support for core labor
standards as defined by the ILO.  In addition, we and Jordan reaffirm our
belief that it is inappropriate to lower existing labor standards
specifically to promote trade.  And we've agreed in principle to try and
improve our standards.

     Each side has agreed to enforce its own existing labor laws, and to
settle questions of any systematic non-enforcement through dispute
settlement.  Sixth, trade and the environment.  Again, for the first time,
this agreement includes provisions on trade and the environment.  Each
country reaffirms its belief that it is inappropriate to relax
environmental laws to encourage trade.  Each country reconfirms its
commitment to the principles of sustainable development and of maintaining
high levels of environmental protection.  Each, of course, also strives to
improve their levels of environmental protection.

     As with the labor provisions, each side has agreed to enforce its own
existing environmental laws and settle any disagreements through dispute
settlement.  At the same time in this area, we and Jordan will form an
environmental cooperation initiative which establishes a U.S.-Jordanian
joint forum on technical environmental cooperation.  This will be a forum
for ongoing discussion of environmental priorities set by the two parties
-- for example, environmental quality and enforcement issues.  In addition,
the Free Trade Agreement also has provisions on transparency and public
input and so forth.

     Last, the agreement contains consultation and dispute settlement
provisions.  This covers a variety of procedural matters.  The section
itself is mainly geared toward notions of transparency in dispute
settlement, both in connection with Jordanian-U.S. disputes, as well as our
joint commitment for greater transparency in WTO dispute settlement.

     Altogether, this agreement will mean new export opportunities, it will
contribute to a growing relationship in investment in both traditional and
high-tech industries, and it will help raise living standards particularly
among families in Jordan.

     At the same time, this agreement is a step of some significance as we
consider the peace process and the broader future of the Middle East.  The
violence and international tension of the past weeks have shown us all the
possibility of a future for the region all too much likes its past --
suffering, deprivation, violence, narrowing horizons and a lost hope.

     This agreement, which builds on the success of other trade initiatives
with Jordan, offers the region an entirely different model.  History in
Europe, Latin America and Asia shows us that integration through trade can
complement the work of diplomacy.  While no substitute for the difficult
political decisions all parties in the peace process must make, the growth
of trade can help the nations and people of the Middle East move beyond
suspicion and tension to common interests, cooperation and shared benefits.

     This agreement sets precisely this example for the region as a whole.
And with that, I'm pleased to take questions.

     Q    The treaty, as you said, is generally understood to be a reward
to Jordan for its role in the peace process, and yet it's also widely
understood to be a lot tougher than the agreement with Israel.  Why is
that, and should the Israel treaty maybe be brought more up to date and
along these lines?

     AMBASSADOR BARSHEFSKY:  This isn't a reward for the peace process.
What the agreement demonstrates, however, is that there is an alternative
path countries in the Middle East can take, and that is toward economic
integration and shared benefits, rather than conflict.  This agreement is
complemented by our arrangements on industrial zones between Jordan and
Israel.  We have two tracks.

     The industrial zone project, which is a joint project of Jordan and
Israel, helps with respect to integration, economically, among the
countries of the Middle East.  This agreement, with us, puts Jordan on a
par with the United States economically, as is Israel, and will be a
mainstay of the U.S. Jordan economic relationship.  Both elements were
needed, that is the U.S. as the anchoring force, as well as separate
integrative initiatives in the Middle East, if we're to see that region
prosper and stabilize.

     The Israel agreement provided much of the model of the agreement we
have here, but not entirely, and that's because the Israel agreement is 15
years old.  None of this in this room were talking about e-commerce 15
years ago, let alone five years ago.  And the debate about trade and labor
and trade and the environment was in its infancy 15 years ago, barely
perceptible on the radar screen.

     Perhaps at some point other trade agreements should be brought up to
the standards we've now set with Jordan.  But our principal goal here was
to create a state-of-the-art trade agreement that reflected current

     Q    Can you say something, Charlene, about this timing of the
agreement?  Was it just a coincidence that it occurred, that the signing
will occur at this very critical moment in the peace process?  Or did you
kind of have an eye to what was going on politically in the negotiations in
order to try and get something into place which happened?

     AMBASSADOR BARSHEFSKY:  As with all agreements we have negotiated, our
eye was on the substance, not the clock.  But there is no question that,
particularly for the Kingdom of Jordan, demonstrating a different path, a
different model in the Middle East was viewed to be of utmost importance,
especially at this very critical time.

     Q    One of the issues of concern to the Israelis was to make sure
that goods produced in Israel and Jordan could be cumulated for meeting
preferential access rules.  Can they be cumulated and parts made in Israel,
parts made in Jordan, meeting whatever rule of origin you have?

     AMBASSADOR BARSHEFSKY:  Not yet.  But we have committed with Jordan
that within the next six months we will begin a discussion of precisely
that issue, which may involve more than just Israel, but other of Jordan's

     Q    To follow up, some Israelis consider the refusal of the
Jordanians to go along with cumulation as just a reinforcement of the Arab
boycott of Israel, because this keeps Israeli goods from getting used in
these products.  Is that part of the boycott?

     AMBASSADOR BARSHEFSKY:  This didn't have anything to do with Jordan's
refusal to discuss these issues.  So there is some miscommunication there,
I'm afraid.  No, this is an issue that we will take up, not right at this
moment, but fairly soon.

     In the meantime, of course, Israel has a free trade agreement with us
and its access has resulted in very substantial increased Israeli exports
to the United States.

     Q    The labor and environmental provisions of this have been
described as kind of a potential template for future trade agreements.  So
I am wondering, with respect to the Free Trade of the Americas Agreement,
those negotiations, is it likely that these type of provisions will be
brought by the U.S. in those negotiations?

     AMBASSADOR BARSHEFSKY:  I think we will have to look at free trade
negotiations with each country individually and on the merits of the
particular case presented.  But, as a general matter, we think we have
taken a very sensible course here.  The goal was to marry the concepts of
free trade with other public responsibilities with respect to environmental
stewardship and with respect to the rights of workers.

     The argument has been advanced, as you all know, that increased trade
flows result in the degradation of the environment and lax enforcement of
environmental rules.  And the argument has been made that free trade flows
lead to a suppression of the rights of workers.

     Putting aside whether one agrees with those arguments or not, the
provisions in this agreement say basically this:  You have laws, and in
Jordan they are actually quite strong, on environmental protection and on
the protection of the rights of workers.  Enforce them, regardless whether
trade increases.  Enforce those laws, so that there is diminution in the
rights of workers, there is no degradation of the environment, because
trade flows may also happen to increase.

     This, I think, sets a very important standard, and a sensible one.
One that cannot in any way be characterized as protectionist, or as
unrelated to trade, but instead I think a series -- rather a standard that
ties together notions of open markets with notions of solid enforcement of
labor and environmental laws.  In addition, we have separate cooperative
efforts, in the hope of raising those standards in both the U.S. and in
Jordan into the future.  And we think this is a very sensible, common-sense

     Q    Some members of Congress has called for negotiating a free trade
agreement with Egypt.  Do you have any plans to do that?  Where are you in
that process?

     AMBASSADOR BARSHEFSKY:  We have a trade and investment framework
agreement with Egypt, which is relatively new.  You know from your views of
the NAFTA and now our Jordan agreement, the precursor to these agreements
has always been a trade and investment framework agreement.  That's the
agreement under which we outline key areas where there seems to be
differences, and we often choose fairly major projects as building blocks
toward more open trade.  In the case of Jordan, we use the framework
agreement to negotiate a bilateral investment treaty first, to negotiate
increased protection of intellectual property rights and so on.

     That's what we're doing with Egypt now, and we'll continue to do that.
Certainly Egyptian participation in the qualifying industrial zones with
Egypt -- sorry, with Jordan and Israel, would be very welcome indeed, and
we've encouraged Egypt to become a participant in that project.  Again, the
integrative element among the Middle Eastern nations is very important on
the economic front.

     But with respect to freer trade with Egypt, step one is to utilize the
trade and investment framework agreement to its fullest, and we're in the
process of doing that now.

     Q    Have you had any conversations or negotiations with Senate and
House Republicans on the labor and environment provisions, because in the
past they've been very reluctant to include those in a deal?

     AMBASSADOR BARSHEFSKY:  We have had a number of discussions, and I
think it's fair to say that most members of Congress want to see the
language, and want to give this issue a fair hearing.  And we're very
pleased about that.  I think some of the very sharp ideologically driven
rhetoric that we heard in the mid '90s and in 1997 has been muted quite a
bit.  So members, I think, are willing to keep an open mind, and obviously
we want to work with them.

     Q    How quickly do you think this will kick in?  How quickly will
people in the ground, in Jordan, see the economic results of this?

     AMBASSADOR BARSHEFSKY:  Well, the agreement won't be implemented until
it's ratified in both countries.  For the United States, you know that will
require implementing legislation which will be a relatively simple affair.
You're looking principally at changes to our tariffs, since our services
regime is largely already open.  There may be a few other legislative
items, but relatively simple.

     In Jordan, of course, this must pass parliamentary approval and so on.
Once the necessary approvals are received, the provisions of the agreement
will kick in.  I think we'll see some quite rapid benefits to the Jordanian
economy in particular, as American companies wait to see if the FTA will be
implemented, and are interested in further trade ties with Jordan,
including investment in Jordan, which we would certainly welcome.

     Q    Sort of following the other question, what are the priorities for
choosing future countries to do deals with?  Is it physical proximity like
the FTA, or another political reward for some country, or what would you
see as the direction for where this kind of concept goes from here?

     AMBASSADOR BARSHEFSKY:  I know you're on the political reward kick,
but this is quite a bit more than political reward.  This has to do with
helping to insure a vibrant Jordanian economy, a stable peaceful,
prosperous Jordan, in and of itself, is vital to Middle East stability.
Vital.  I don't consider that a political reward, I consider that economic
and political reality in the Middle East.

     Other countries, we are, as you know, pursuing very vigorously the
free trade area of the Americas.  We should have, by the end of this year,
or early next, a rough cut first draft of the agreement, very heavily
bracketed to be sure, but a rough cut draft of the agreement.  And we would
like to see the FTAA talks accelerate.  We don't think there's any reason
that these talks should extend to 2005 as originally planned at the Miami
summit several years ago.

     But the FTAA will be a priority.  It has been of this administration,
it will continue to be a priority.  That, of course, is 34 countries in one
fell swoop.  Certainly, I think it will be important for the U.S. to look
at other regions of the world, whether Europe, or Asia, as we have done
from time to time.

     The key for the U.S. will be to insure that it remains at the center
of a variety of trade relationships, whether bilateral, for key trading
partners like a Mexico or a Canada, which are our two largest trading
partners, or regionally, whether in Asia or with Europe, or most
particularly in our own hemisphere.  This has to do not only with our
economic position in the world, this has to do also with our national

     Thank you very much.

                      END        4:20 P.M. EDT

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