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Cablegate: Ajex Expo 2003 Sells Jordan As Gateway to Iraq And

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 03 AMMAN 006961

SIPDIS

SENSITIVE

USDOC FOR ITA/MAC/MWILLIAMSON
USDOC FOR ITA/MAC/ONE/PTHANOS
USTR FOR NED SAUMS

E.O. 12958: N/A
TAGS: ETRD PREL IZ JO EFTA
SUBJECT: AJEX EXPO 2003 SELLS JORDAN AS GATEWAY TO IRAQ AND
REGION; KEEPS UP BUZZ ON JORDAN'S QIZ AND FTA ACCESS TO
U.S. MARKET


SENSITIVE BUT UNCLASSIFIED. HANDLE ACCORDINGLY.

1. (SBU) SUMMARY. The American Jordanian EXPO 2003 drew
900 participants to its opening plenary on October 22,
focused on the Iraq transit trade, and pitched Jordan as the
"gateway" to Iraq and other markets in the region. Sessions
on the U.S.-Jordan Free Trade Agreement and qualifying
industrial zones (QIZs) put the spotlight on Jordan as a
platform to export to the U.S. Lead speakers from the United
States included Department of Commerce DAS Molly Williamson
and Ambassador Gnehm. Sir Jeremy Greenstock, representing
CPA, spoke on "Iraq for the Iraqis" to a rapt,
standing-room-only audience. The conference-exhibition
featured 52 trade booths selling products from the U.S. and
Jordan, but also included businesses from Iraq seeking trade
or investment. As a vehicle for more private sector focus on
Iraq, AJEX was a success, drawing participants from China,
Russia, Canada, Europe, and South Africa. As a venue to
pitch Jordan and its American FTA advantages, including
American products now competitively priced in Jordan, AJEX
got mixed reviews. Jordanian officials know how to "stay on
message", but the message may need a re-write or a few new
messengers. Aside from a few high-level speakers, the
American representation at AJEX lacked depth. If AJEX is to
survive into a third year as evidence of U.S. support for
Jordan's economic reform agenda and path to export-led
growth, more Americans, including officials, will have to
show up next time. END SUMMARY.

Many Parts, Including a Talk on Iraq for the Iraqis
--------------------------------------------- ------

2. (U) AJEX kicked off the evening of October 21 with a
reception sponsored by the Embassy and JABA, the American
Chamber of Commerce in Jordan. Some 100 speakers and guests
heard the Ambassador preview the conference, and introduce
key American guests. The Ambassador took the opportunity to
spotlight American products to be exhibited at the show,
noting that more U.S.-made consumer goods were more widely
available in Jordan at reasonable prices, thanks to the FTA.

3. (U) The Oct. 22-23 conference saw three panels on trade
and investment in Jordan as an access point to the U.S. and
other markets, three panels on Iraq and Jordan as a gateway
to this opening market, and a more general panel discussion
on outsourcing in Jordan.

4. (SBU) Jeremy Greenstock's keynote address on "Iraq for
the Iraqis" held the packed room spellbound for 45 minutes
with a recitation on CPA goals in Iraq, what would be
required to make Iraq truly a country led by and for Iraqis,
the current security situation and prospects for improvement,
along with factors business-persons might weigh as they
considered getting into Iraq. Greenstock opened the
on-background remarks with a discussion of UNSC 1511 and an
initial goal of delivering Iraq back to the Iraqis within
2004. He said that the basic steps included writing a
constitution and holding a constitutional referendum,
followed by elections and a new government taking over.
There were variations on this basic scheme, he averred, and
variations on timing. He also noted that the enemies of a
reformed Iraq were ever-present and not to be treated
lightly, but that the Iraqi people were coming to realize the
true nature of these enemies. Noting that the security
situation could be represented by a jagged line upward,
Greenstock asked businesses to make a calculation weighing
the need to get into the market early versus some security
risk. He noted that Iraqis would give no credit to
"fair-weather friends" and urged an attitude of confidence in
the future tinged by realism about the present. Once
businesses entered Iraq in numbers, he concluded, it would do
Iraq a power of good, and eventually lead to many more
positive developments and to business success.

A Networking Part
-----------------

5. (U) Networking sessions and the trade exhibits promoted
discussions among Iraqi businesses and authorities and
potential trading partners and investors. CPA authorities
were part of panels on accessing the Iraqi market, Iraq's
economic and legal institutions, and Iraq's business climate.
CPA contracting officials and other CPA officials were
heavily booked during these break-out sessions.

Parts for Jordanian Officials
-----------------------------

6. (U) Speaking on behalf of King Abdullah II, Deputy Prime
Minister Mohammad Halaiqa highlighted the "New Jordan": a
meeting place in the region, a gateway to the region's
markets, and a place for ideas to flourish. He noted the
heavy regime of economic reforms the nation had undergone in
the years before and since WTO accession in 2000, and the key
role the private sector now played in partnership with the
government. Echoing the king's words, Halaiqa said that now
Jordan must "deliver and perform" on its promise. There was
"more to do" he said to make Jordan a more prosperous and
progressive place to do business. Other GOJ speakers spoke
of Jordan's attractive Qualifying Industrial Zones, which
with Israeli content qualified for duty-free and quota-free
access to the U.S. market. Other GOJ officials outlined the
QIZ success story to date (from zero exports in 1997 to a
projected $500 million in exports to the U.S. in 2003), and
how QIZs and the new Aqaba Special Economic Zone are set up.

A Part for American Officials
------------------------------

7. (U) Commerce DAS Williamson hailed Jordan's "tremendous
flowering" as the first Arab country with an FTA. Jordan's
steady economic growth and its transparency and
competitiveness make it a leader in the region. Jordan's
progress also reflects hope for a new era in the region and a
new relationship with the U.S., she said. DAS Williamson
reprised the goals of the Middle East Partnership Initiative
(MEPI), for which Jordan could be held up as a model. New
FTAs in the region would be harmonious and compatible, she
said. She praised Jordan's growth in the bilateral
relationship. Ambassador Gnehm in closing remarks reviewed
the bilateral trade relationship, including strong growth in
non-QIZ trade which may reach $100 million in 2003. He
reviewed other aspects of a deepening and widening
relationship, from FMF and IMET in mil-to-mil ties, to
Fulbright exchanges and cultural programs, to cooperation on
counter-terrorism issues.

But A Conference Less than the Sum of its Parts
-------------------------------------------

8. (SBU) COMMENT: Despite its success in promoting private
sector participation in Iraq -- or perhaps because of it --
the AJEX conference was less successful in getting across
Jordan's basic appeal as a place to invest for the long term.
The two messages are fundamentally different: Iraq's appeal
is as a potentially high payoff (and high risk) market;
Jordan's advantage is as a reformed, market-oriented economy
with access to regional Arab markets, unique QIZ and FTA
access to the U.S. market, and proximity to Europe. AJEX
promoters went all out to attract American participation,
including with letters to key U.S. CEOs from the Royal Court.
The response was disappointing. A competing
Jordan-sponsored event in Washington the week before no doubt
deflected would-be travellers. Potential U.S. participants,
including officials, will have to show more support if AJEX
is to survive into a third year.
GNEHM

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