1-What is the FTA?

The U.S.-Jordan Free Trade Agreement (FTA), signed October 24, 2000, is only the fourth bilateral Free Trade Agreement ever concluded by the United States. It is an expression of America’s commitment to, and confidence in, Jordan’s economic future.

The Agreement will eliminate duties and commercial barriers to bilateral trade in goods and services between the United States and Jordan over 10 years. The FTA also includes, for the first time ever in the text of a trade agreement, provisions addressing trade and environment, trade and labor, and electronic commerce. Other provisions address intellectual property rights protection, balance of payments, rules of origin, safeguards and procedural matters such as consultations and dispute settlement.

2- Who in Jordan benefits from the FTA?

Jordanian investors, exporters, consumers, and workers all stand to benefit.

3- When will the FTA take effect?

The Agreement was ratified by the U.S. Congress on September 28, 2001 and came in to force on December 17, 2001. It should be noted that, at this date, the agreement entered its second year according to an agreement between the two countries..

4- What will be the impact of the FTA on the economy?

The FTA should be good for Jordan in trade, investment and employment. It is designed to attract investment to Jordan by offering improved access to U.S. markets, and to benefit Jordanian exporters in specific industry sectors. Over time, this growth in business should mean more and better jobs for Jordanians.

Greater economic activity should be good for Americans as well. The FTA will likely afford U.S. exporters in certain industry sectors greater access to Jordan’s market. In addition, the Jordanian services sector will be liberalized to allow greater access to U.S. service providers. According to a U.S. International Trade Commission (USITC) study, the U.S. will not lose jobs or domestic business as a result of signing the FTA.

5- What industry/service sectors are affected by the FTA?

All trade in goods will be liberalized by the FTA, yet, the products' HS code has to be checked, in order to specify what family it falls under, and under what category, in order to know the tariff rate on the product, and how long it would take it to become tariff free.

In addition, a broad range of services will be liberalized on the basis of the U.S. and Jordan’s existing commitments to the General Agreement on Trade in Services (GATS) and as defined in the Services Schedules in annex 3.1 of the FTA.

6-When will tariffs be reduced?

The tariff reduction schedules for each country vary depending on the good in question. The schedules range from immediate tariff elimination to a ten-year reduction period. A description of the various schedules can be found in annex 2.1 of the FTA. A full tariff schedule for each country is also annexed to the FTA.

B-Trade in Goods:

1-What are the procedures for any product to enter the US market and what qualifications does it need to satisfy?

There are two main procedures:

· Ensure that your product satisfies all the standards and specification requirements necessary to enter the US market generally, and find out whether any specific State requirements exist that your product needs to satisfy.

· Ensure that your product is of a Jordanian origin, meaning that it has accumulated at least 35% of its appraised value from Jordanian origin. Please note that there is some flexibility provided for by the Agreement in this regards as it allows for the accumulate this minimum 35% by having 20% originating from Jordan, and the other 15% of US origin.

2-Does any product has the chance to enter the US market?

Every product has the opportunity to be exported to the US market. The idea is to identify how the product will be treated under the FTA.

3-Does the importer can benefit from these tariff reductions if he is an importer, i.e. if he wants to buy goods from the USA and sell them in the Jordanian market?

Yes, he will, as seen in the Jordanian tariff schedule, and by the tariff reduction import will be at a lower cost and therefore, and make the product available to the consumer at competitive prices.


4-Would Jordanian products have quantity quotas applied to them and how will they be affected with the trade liberalization process agreed upon by the two countries?

Mostly agricultural and dairy products have quantity and tariff quotas, but never the less they are gradually affected with trade liberalization, until quantities become unlimited in year 10 of the date of agreement effectiveness, some examples that have the headings AG 04013075, AG 04062033, AG 04062067, AG 04063018 and AG 23099028 (see annex 1 of the agreement).

5-Which Jordanian products have immediate tariff and quota free access to the USA?

They are products that fall under category G and A, according to the USA tariff schedule, e.g. H.S code 02012010 which is high quality beef cuts is an example. Please see Category G items for the complete lists and product descriptions.

6-Does Jordan apply any quantity quotas on any products that are imported?

No, Jordan does not have any quantity quotas on any products that are imported.

7-Which products will not benefit from any tariff reductions at all during the 10 years transition period necessary to arrive at a free trade area between the two countries?

These are the products that fall under category F of the USA tariff schedule, e.g. cotton t-shirts, retain the base rate for ten years of the Agreement and after that they will be duty free.

8-What are the rules of origin under the FTA?

According to annex 2.2 of the FTA, 35% of the value of an exported good must originate in the exporting country. This rule will be further defined through regular meetings of a U.S.-Jordanian Joint Committee. Please note that there is some flexibility provided for by the Agreement in this regards as it allows for the accumulate this minimum 35% by having 20% originating from Jordan, and the other 15% of US origin.


9-What can be accounted for when calculating rules of origin requirements?

The process for the calculation is as follows:

1-The cost of value of material produced in the exporting party for purposes of this Agreement, includes: -

-The manufacturer’s actual cost for the materials, When not included in the manufacturer’s actual cost for the materials, the freight, insurance, packing, and all other costs incurred in transporting the materials to the manufacturer’s plant,

-The actual cost of waste or spoilage (material list), less the value of recoverable scrap, and Taxes and/or duties imposed on the materials by a Party, provided they are not remitted upon exportation.

-Where a material is provided to the manufacturer without charge, or at less than fair market value, its cost or value shall be determined by computing the sum of:

All expenses incurred in the growth, production, or manufacture of the material, including general expenses, An amount for profit, and Freight, insurance, packing, and all other costs incurred in transporting the material to the manufacturer’s plant.

- If the pertinent information is not available, the appraising officer may ascertain or estimate the value thereof using all reasonable ways and means at his disposal.

2-The direct cost of processing operations:

-For purposes of this Agreement, direct costs of processing operations performed in a Party mean those costs either directly incurred in, or which can be reasonably allocated to, the growth, production, manufacture, or assembly, of the specific article under consideration. Such costs include, but are not limited to the following, to the extent that they are includible in the appraised value of articles imported into a Party:

§ All actual labor costs involved in the growth, production, manufacture, or assembly, of the specific article, including fringe benefits, on-the-job training, and the cost of engineering, supervisory, quality

§ control, and similar personnel;

§ Dies, molds, tooling and depreciation on machinery and equipment which are allocable to the specific article;

§ Research, development, design, engineering, and blueprint costs insofar as they are allocable to the specific article; and

§ Costs of inspecting and testing the specific article.

§ The process performed in the exporting party should not be less than 35% of the appraised value of the article at the time it is entered into the other party.

§ If the exporting party could not accumulate 35% it can get 15% from the other party.

10-What if Jordan’s already saturated market becomes flooded with US products, how will this affect Jordanian industries?

Article 10 of the FTA deals with such matters it is called safeguard measures, it’s a way of preventing any market flood, so if any domestic industry complains that the market is flooded with the same product it produces and it can’t compete with it, that industry can call on an investigation, the matrix bellow will explain the procedure (Safe guard and counter veiling measures):

Measures allowed
1. Suspend reduction of duty rate

2. Increase duty not more than (MFN)
3. If it is seasonal to increase tariff, but not to exceed (MFN)

Initial measure
To ask for an investigation
To notify the other party of the investigation
To produce evidence that increasing imports would injure domestic industry

Maximum period allowed and reason
1. For four years, not to exceed 10 years
2. 14 years in the case of infant industry
3. 15 years, which is the maximum of 14 years +first year of the agreements entry into force

Remarks: Extra imports that cause serious injury to domestic or infant industry, by making it difficult to compete and establish a market share.

11-Which Jordanian products will really have an opportunity in the US market?

Every product has a real opportunity but some products that fall under category G are considered Jordan’s priority list, do have an immediate opportunity now since they enter the US market tariff free, then there are the other products that fall under category A, but according to the FTA all products after 10 years have an opportunity to enter the US market duty, tariff, and quota free.

C-Trade in Services:

1-What are the ways and means of exporting services to the USA?

- Services are exported to the USA in four modes: -

§ Cross border supply e.g. E-commerce.

§ Consumption abroad e.g. staying at a hotel abroad.

§ Commercial presence e.g. establishing a company abroad.

§ Presence of natural persons e.g. a Dr. performing an operation and returning home.



2-Are there any particular jobs that only a Jordanian national can fill in Jordan?

Some jobs that can only be undertaken by Jordanian nationals. Some examples are:

§ Managers for research and development.

§ Real estate agents.

§ Publishing house manager.

§ Laboratories managers .

§ Accountants.

§ General physician services.

3-Are there any particular jobs that only a US national can fill in the US?

Yes there are some jobs that can only be undertaken by US nationals. Some examples are:

§ Bank managers

§ Security and investigation services in Maine

§ Accounting services in North Carolina

§ Legal consultation

§ Real estate brokers in Mississippi and New York

4-What is the way to establish financial institution in Jordan under the FTA?

The establishment of a commercial presence or the conduct of new activities is restricted to public shareholding companies constituted in Jordan, and to branches and subsidiaries of foreign banks, unless otherwise stated in the specific sub-sectors of the Jordanian services schedule. Only banks may undertake activities involving the acceptance of deposits and other repayable funds from the public and extend guarantees and commitments services and money broking. Financial service companies as seen in the sub- sector entries below may provide all other financial services. Financial service companies are licensed to undertake Investment Trusteeship, Investment Management, Financial consultations, financial brokerage, Depository, Management of Primary issues.

5-Are there any specific services that only Jordanians can provide in Jordan?

Yes there are and these are:

§ Real estate services.

§ Public transportation services (Taxi cars, busses and trucks) .

§ Construction services and products used for constructing buildings.

§ Intelligence, investigation, security, and sports clubs ( excluding health and fitness centers).

§ Freight forwarding services (taking into consideration all flexibility measures given in this sector).

6-Are there any specific services that only US nationals can provide in the United States?

Yes there are and they are:

§ Legal services (excluding international law).

§ Medical services.

§ Transportation services (sea transportation, internal waterways, shipping and public transportation) .

7-If you are a Jordanian service provider working in the transport sector, what competition may you expect from US service providers in this field?

You might expect almost no competition in land transportation since Jordan has committed these services to be undertaken by Jordanians only. However, you would find that there is competition in air, sea and internal waterway transportation services where non-Jordanians are allowed to work in those sectors. However a 50% restriction on foreign ownership would apply for these sectors. Jordan committed in the following sub sectors in transportation:

§ Maritime transport services (passenger transportation, freight transportation) and Maritime auxiliary services (rental services of sea-going vessels with operator).

§ Internal waterway transport (passenger transportation and freight/ infrastructure is owned by the Jordanian Government and number of service providers may be restricted).

§ Rail transport (infrastructure is owned by the Jordanian Government and number of service providers may be restricted)

8-If you are a Jordanian service provider working in the information technology sector, what competition may you expect from US service providers in this field?

You might expect a competition in all particular sub-sector services of this industry. Both countries have made the same commitments of liberal access to the IT markets of the other. Jordan can benefit form the technical advances of the US services, meanwhile US service providers may benefit from the advanced skills of Jordanians in this field. It is noted that Both Countries have made the same commitments where it comes to protection of intellectual property rights.

9-If you are a Jordanian management consultant, what competition may you expect from US service providers in this field?

The only advantage/ disadvantage that a Jordanian management consultants face is that they can provide the service in Arabic unlike the American service providers. Other than that both the Jordanian and American service providers should work as hard in order to provide management consultancies and study the market and the needs of customers. Furthermore, the Jordan and US allow for 100% foreign ownership of such services, i.e. equal competition is expected, as it is a liberal access sector.

10-If you are a Jordanian service provider mainly working in areas requiring market research, opinion polling and newsletter publications, what competition may you expect from US service providers in this field?

Jordan and the US both allow for 100% foreign ownership in market research services of these services. As for public polling services, the director of the public opinion bureau must be a Jordanian national. Ownership of periodical publications, including newsletters is restricted to Jordanians.

11-If you are a Jordanian physician and my wife is a dentist. What are the opportunities of investing in the US and working in this field?

Unfortunately the US did not commit to physician and dentist services. However, if you would like to establish and manage a hospital then you would have to share your investment with an American citizen. You may need to contact the responsible professional bodies in the US for further information.

D-Investment:

1-If you are an investor and want to invest in Jordan, How can you benefit from this Agreement?

The Free Trade Agreement did not stipulate any articles concerning investment in Jordan it refers to the BIT agreement on that issue. But it must be noted that the FTA and the BIT agreement compliment each other . Foreign ownership is allowed in different services sectors too. For further information please see the commitments made in Services Liberalization.

2-If you are an investor and want to invest in the USA, what do you need to do?

Investment in the US is encouraged. There are sector that you will be allowed to start your business with a 100% ownership, but in some cases you can only own 50%, meanwhile there are areas that are only restricted for US Investments. A study of the US market as a whole, at a State and federal level to understand the requirements and rules that apply, and in order to assist in the decision –making process.

E-Intellectual Property Rights:

1-What are Jordan’s Intellectual Property Rights (IPR) commitments under the FTA?

Jordan agrees to accede to the WIPO Copyright Treaty (WCT) and the WIPO Performances and Phonographs Treaty (WPPT), with specific exceptions, within two years, and to accede to the Articles 1-22 of the International Convention for the Protection of New Varieties of Plants (UPOV) within one year of enactment of the FTA. Jordan also agrees to particular obligations regarding Certain Regulated Products, primarily in the pharmaceutical sector. Finally, Jordan agrees to meet other patent, copyright, and trademark-related obligations within three years of enactment. Particulars of these commitments are in the text of the FTA and in a related Memorandum of Understanding on issues signed by the U.S. and Jordan on October 24, 2000.

2-If you have a patented pharmaceutical product in Jordan, do you still have to register it in the US, and if so, what is the responsible agency and what are the steps necessary?

Yes, you will have to register at the IPR office at the USTR, and the relevant Federal Health Agency, and get market approval on it, and in another way it’s to insure protection over the product to prevent others from claiming it or trying to use it.

3-If you have a patented pharmaceutical product in US, do you still have to register it in the Jordan, and if so, what is the responsible agency and what are the steps necessary?

Yes, you do have to register it at The Ministry of Health, and the Ministry of Industry and Trade and also get market approval.

4-If you are a US artist, how your work shall be protected in Jordan?

As an artist you will have copyright over your work, and anyone who tries to imitate your work or claim it for themselves could be prosecuted and face legal penalty.

5-If you are a Jordanian artist, how your work shall be protected in Jordan and the US?

As an artist you will have copyright over your work, and anyone who tries to imitate your work or claim it for themselves could be prosecuted and face legal penalty.

6-How do you register a patent in Jordan?

In order to do so the patent owner has to be register 18 months outside of Jordan prior to any registration in Jordan so as to insure patent protection in Jordan. According to Article (4 f) of the patent law.

F-Dispute Settlement:

1-If any problem or dispute arises, how may it be solved and how long will it take, and finally, will decisions made be binding?

There is a certain settlement mechanism for any dispute that may arise, if:

a. (i) A Party considers that the other Party has failed to carry out its obligations under this Agreement; or

(ii) A Party considers that measures taken by the other Party severely distorts the balance of trade benefits accorded by this Agreement, or substantially undermine fundamental objectives of this Agreement.

(b) A Party seeking needs to submit a request for consultations to the contact point assigned for such a task (usually the Ministry of Industry & Trade in Jordan or the USTR office in the USA).

(c) Through consultations within 60 days of the submission of such request, either Party may refer the matter to the Joint Committee, which shall be convened and shall endeavor to resolve the dispute.

(d) If a matter referred to the Joint Committee has not been resolved within a period of 90 days after the dispute was referred to it, or within such other period as the Joint Committee has agreed, either Party may refer the matter to a dispute settlement panel. Unless otherwise agreed by the Parties, the panel shall be composed of three members: each Party shall appoint one member, and the two appointees shall choose a third who will serve as the chairman.

(e) The panel shall, within 90 days after the third member is appointed, present to the Parties a report containing findings of fact and its determination as to whether either Party has failed to carry out its obligations under the Agreement or whether a measure taken by either Party severely distorts the balance of trade benefits accorded by this Agreement or substantially undermines the fundamental objectives of this Agreement. Where the panel finds that a Party has failed to carry out its obligations under this Agreement, it may, at the request of the Parties, make recommendations for resolution of the dispute. The report of the panel shall be non-binding.

(f) (i) If the dispute settlement panel under this Agreement or any other applicable international dispute settlement mechanism under an agreement to which both Parties are Party has been invoked by either Party with respect to any matter, the mechanism invoked shall have exclusive jurisdiction over that matter.

(ii) If the mechanism described fails for procedural or jurisdictional reasons to make findings of law or fact, as necessary, on any claim, the Party may invoke another mechanism to settle the claim. The report of the panel shall be non-binding.

G-Electronic Commerce:

1-How can you benefit from the liberalization of e-commerce made by the two parties?

E-commerce is now the wave of the future, and taking into account what was present in the services commitments of both parties, they are committed not to impose any custom duties on electronic transmission, nor impose any barriers on electronic transmission including digitized products.

H-Labor:

1-What will be the effect of the labor commitments?

According to Article 6 of the FTA, the United States and Jordan agree to enforce their existing labor laws; agree to reaffirm their obligations under the international Labor Organization's Deceleration on Fundamental Principles and Rights at Work and its Follow -Up; and agree not to relax labor laws in order to promote trade. There are no new labor commitments in the FTA.

I-Environment:

1-What will be the effect of the environment commitments?

According to Article 5 of the FTA, the United States and Jordan agree to enforce existing environmental laws; agree not to relax environmental protection in order to encourage trade; and agree to encourage the improvement of their respective environmental regimes. A United States Trade Representative (USTR) study found no significant environmental effects on the United States in the provisions of the FTA. A similar study carried out by the Government of Jordan found no significant environmental effects in the provisions of the FTA.

J-Of General Nature:

1-Will the FTA increases Jordan’s commitments over and above its commitments in the World Trade Organization (WTO) Agreement?

As part of the FTA, the U.S. and Jordan reaffirmed their WTO commitments. In addition, dispute settlement measures in the FTA are designed to be consistent with WTO commitments. Finally, the U.S. and Jordan issued a Joint Statement on WTO Issues on October 24, 2000 that further clarifies their commitments.

2-Does the FTA affect taxation in the U.S. and Jordan?

According to Article 12 of the FTA, with a few specific exceptions, the FTA will not apply to taxation measures.

3-How does the FTA affect the Qualified Qualified Industrial Zones (QIZ) initiative?

The FTA does not supersede or eliminate the QIZ initiative. The QIZ initiative currently grants immediate tariff and quota-free access to the U.S. market to goods that are produced in the QIZ’s and meet specific rules of origin requirements. Under the FTA, tariffs and quotas for many goods are phased out over time, and rules of origin require 35% Jordanian content. Thus for some high-tariff goods, producing in QIZ’s will retain an advantage.

For instance, many apparel goods face U.S. tariffs of up to 30%. Under the FTA, tariffs on these goods would be reduced over ten years, and Jordanian exports would have to meet the 35% Jordanian content level. Under the QIZ initiative, those same goods would enjoy immediate elimination of tariffs and quotas, and would require a lower level of Jordanian inputs. Thus in this case, QIZ-produced products would enjoy a comparative advantage.

4-Will the FTA change visa requirements between the U.S. and Jordan?

The FTA will give Jordanians the opportunity to apply for “Treaty Trader” E-1 and “Treaty Investor” E-2 visas. It will also allow U.S. citizens to apply for similar visas to Jordan. Jordanians will be able to apply for E visas after the U.S. Congress approves the FTA by enacting legislation to put it into effect, including legislation to enable U.S. consular officers to issue E visas.