October 20, 2000 Dual Purpose of a U.S.-Jordan Trade Pact By JOSEPH KAHN
WASHINGTON, Oct. 19 - The United States plans to sign a wide- ranging free trade agreement with Jordan next week, bolstering a partner in the troubled Middle East peace effort while helping Vice President Al Gore show that he could reinvent the way trade deals are done.
President Clinton and King Abdullah of Jordan will sign the agreement at a White House ceremony on Tuesday, both sides confirmed. Under the pact, each side would eliminate all tariffs and barriers to trade, which would make Jordan only the fourth nation to allow two-way trade in goods and services with the United States. The other three are Canada, Mexico and Israel.
Annual trade between Jordan and the United States, which totaled just over $300 million last year, is comparatively minuscule. The United States and Mexico trade more with each other on an average day.
But Jordanian and American officials say the agreement is groundbreaking. It could attract multi national investment to economically ailing Jordan, encouraging economic growth and creating jobs.
The Clinton administration is also hailing it as a new model for trade agreements - one with the potential to attract union support, because it mandates compliance with international labor and environmental norms.
About half of Jordan's population of 4.5 million consists of Palestinians, most of them impoverished. In addition, Jordan borders the West Bank, where, American officials believe, high unemployment and low economic expectations contribute to unrest.
"This is going to be a source of domestic economic growth for Jordan that will make them an even stronger partner in the Middle East," said Charlene Barshefsky, the United States trade representative. "Their economy needs a jump-start, and this is a critical component."
King Hussein, the late Jordanian leader, who signed a peace accord with Israel in the early 1990's and helped broker the current peace talks between Israel and the Palestinians, pressed for an open trade agreement with the United States, said Marwan Muasher, Jordan's ambassador the United States.
King Abdullah, his son, has worked to modernize the economy and pass a series of economic laws, especially on intellectual property protection, that allowed Jordan to join the World Trade Organization last year.
"Politically this agreement sends a strong message that the United States and Jordan are close partners," the ambassador said.
The agreement may also resonate on the presidential campaign trail. It is the first such accord to include a section detailing each side's responsibility to enforce environmental and labor laws. The provisions commit Jordan to ensure that multinational companies investing there allow their workers to bargain collectively. Jordan also promises not to ease any environmental pollution laws as a way of attracting investment.
Vice President Gore and George W. Bush, the Texas governor, have sparred over how to conduct trade talks. Mr. Gore, seeking to solidify support from labor unions, has repeatedly promised that he will not negotiate any new trade agreements unless they include language preventing labor or environmental abuses.
As he campaigns for the White House, Mr. Gore is expected to cite the Jordan agreement as the kind of trade accord he supports.
Mr. Bush has said that the push to harmonize labor and environmental rules is fundamentally protectionist, geared to thwart trade rather than enhance it.
The new standards, which take up about two pages of the 30-page free trade agreement, require Jordanian adherence to core labor standards specified by the International Labor Organization.
Having inserted the standards in the agreement, the Clinton administration has a shot at achieving something that has eluded it for almost eight years: union support for a trade accord.
Unions were vigorous opponents of the North American Free Trade Agreement, the administration's first and largest such pact. This year they fought hard, but ultimately unsuccessfully, to derail permanent normal trade relations with China.
But the A.F.L.-C.I.O. umbrella union was involved in negotiating the trade agreement with Jordan, specifying what it considered acceptable core labor standards and enforcement provisions. Union officials said that although they had not seen the text of the agreement, there was the prospect of an outright endorsement.
"If it all plays out, there is certainly a lot of potential here," said Thea Lee, a trade policy official at the A.F.L.-C.I.O. "We think this could be an important and constructive new road."
Labor unions have often said that they would support expanded trade if agreements were not used as a way for companies to skirt labor and environmental laws at American workers' expense. No trade agreement has yet passed their test.