THE WHITE HOUSE Office of the Press Secretary For Immediate Release October 24, 2000 PRESS BRIEFING BY U.S. TRADE REPRESENTATIVE CHARLENE BARSHEFSKY 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 afterwards. 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 Jordan. 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 provisions. 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 reality. 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 neighbors. 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 approach. 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 security. Thank you very much. END 4:20 P.M. EDT
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