U.S., Jordan poised to sign free trade pact

WASHINGTON (Reuters) -- The United States was to sign a free trade agreement with Jordan Tuesday evening, giving a much-needed economic boost to a critical ally in President Clinton's drive to end the violence in the Middle East.

The agreement, which will be signed at a White House ceremony by Clinton and Jordan's King Abdullah, will give Jordanian goods duty-free access to the U.S. market and afford similar benefits to American exporters.

In addition to phasing out tariffs on textiles, farm goods and other products over 10 years, the trade agreement includes precedent-setting provisions aimed at protecting workers' rights and the environment.

These protections were sought by U.S. labor unions, a key constituency for Democratic presidential hopeful Al Gore, who is locked in a tight race with Republican nominee George W. Bush ahead of November 7 elections.

U.S. trade officials see the Jordan deal as a model for future trade pacts if Gore is elected.

The U.S. Congress is expected to vote on the pact next year and aides said passage was virtually assured even though Republicans generally oppose adding labor and environmental provisions to trade pacts.

The United States views Jordan as a key ally in the Middle East peace process, which has unraveled since fighting erupted between Israel and the Palestinians.

Jordan, which signed a peace treaty with Israel in 1994, has denounced Israel for recent violence which has left at least 131 people dead -- the vast majority of them Palestinians and Israeli Arabs.

Nevertheless, Washington credits Abdullah with playing a "constructive role" in the crisis and has praised his "strong stance" against terrorism, an administration official said.

Trade negotiations between Washington and Amman began in June, during a visit by Abdullah to the White House.

Negotiations typically take years, but the Jordan pact was wrapped up quickly to help the king in the daunting task of reversing years of sluggish growth, which has fueled rising unemployment and poverty.

Last year, the monarch won Washington's crucial backing for World Trade Organization membership after pushing through a package of free-market laws.

The United States exports about $276 million in goods annually to Jordan.

In contrast, Jordan sold only $11 million in products in the U.S. market last year, from men's suits to jewelry.

U.S. officials said the trade pact would boost Jordanian shipments to the United States and help the country's aid-reliant economy attract critical foreign investment.

Given the small size of the Jordanian economy, U.S. officials said the pact would have little impact on American exports.

Under the trade pact, Jordanian tariffs would be cut in stages. Tariffs of less than 5 percent would be phased out in two years, while tariffs of 20 percent or more would be eliminated in 10 years.

As part of the deal, the United States and Jordan pledged to live up to their existing labor and environmental laws and, if possible, to improve them. When disputes arise over compliance, a three-member panel would recommend a settlement.

Eager to shore up union support, Gore has promised in his presidential campaign to only support trade deals that include provisions protecting workers and the environment.

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