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Summary Report of the U.S.-Israel-Jordan Trilateral Economic Committee

(July 20-21, 1994)

The talks of the Committee focused on future economic relations between Israel and Jordan, joint development projects, finance, trade, tourism, transportation and civil aviation. The summary report was in effect a declaration of principles to guide the negotiations on all these items as mentioned in the following statement. Each country took into account the special needs of the other and both addressed themselves also to the newly created autonomous areas in Gaza and Jericho.


The fifth meeting of the U.S.-Israel-Jordanian Trilateral Economic Committee was held at the Dead Sea Hotel in Jordan, July 20-21, 1994. The committee met in plenary session led by Secretary of State Christopher, Prime Minister al-Majali and Foreign Minister Peres. This historic occasion marked the first public meeting of Israeli and Jordanian officials in the region.

The committee met in plenary session and then convened in four groups: Trade, Finance and Banking; Jordan Valley Cooperative Projects; Civil Aviation; and Tourism. Following is the summary report:

Group I - Trade, Finance and Banking

With the vision of realizing a new era of common prosperity, Jordan and Israel have agreed on the importance of establishing a set of common principles to guide future trade relations between their countries, and ultimately within the region. The parties exchanged papers which outline their concerns in this area and provided a first draft of relevant principles. Discussions resulted in substantial agreement on a number of principles, which are intended, in the context of a peace treaty, to guide trade between the two countries. The eventual goal of the two parties is the achievement of free trade in goods and services between their countries and within the region.

1. The development of trade and economic relationships should be mutually beneficial and supportive of the economic development of the two countries.

2. Trade between Jordan and Israel should be based upon most-favored-nation treatment. The two countries will eventually enter into a trade arrangement in accordance with GATT (WTO) rules.

3. Trade liberalization between the two countries should proceed in phases. The mutual reduction of trade barriers between the two countries may proceed at differential rates, taking into consideration their different levels of development and economic structures. The two parties will negotiate the possible acceleration of beneficial treatment for Jordanian goods entering Israel beyond Israel's scheduled unilateral trade liberalization. Israeli goods entering Jordan would be subject to Jordanian import policies, with the aim of early application of MFN principles. In the context of a trade arrangement between the two countries, Israel will refrain from invoking administrative measures to the extent possible. Negotiations would also address Jordanian concerns regarding the possible negative impact of Israeli administrative measures, such as product standards, on Jordanian exports to Israel. 4. In accordance with GATT (WTO) special provisions, including anti-dumping and countervailing duty measures, should be included and enforced to help ensure fair competition among producers. Restrictions on grounds of public morality, public, security, public health and similar public policy reasons will also be allowed, in accordance with GATT (WTO). Israel asked that the need for special safeguards may be addressed in the context of a possible trade agreement; Jordan took note.

5. The countries will cooperate in promotional and marketing channels. They will also cooperate to facilitate the transit and re-export of goods to third country markets and to ensure the efficient use of trade related infrastructure in both countries.

6. Opportunities for collaboration will be given special attention, including possibilities for processing and marketing mineral resources common to both countries.

7. The two countries will cooperate to ensure the broadest possible sharing of technology and scientific research. They also agree on the importance of according international standards of protection of intellectual property rights.

8. The two countries agree on the desirability of promoting trade with, and the economic expansion of the West Bank and Gaza Strip. Jordan requested the Israeli delegation to work promptly on expediting Jordanian access to the West Bank and Gaza Strip. Toward that end, Jordan presented a list of goods which it would like to be considered for inclusion in List A of the Cairo protocol to the DOP. Israel took note of this request and the importance of this issue to Jordan, but indicated that its ability to make positive statements of its approach was constrained by the nature of the Cairo protocol, i.e., that requests for changes must originate with the Palestinians. In recognition of the importance of this issue, the two countries agreed to invite the Palestinians to participate in trilateral discussions among Jordan, Israel and the Palestinians, with their first meeting intended to take place before August 1, 1994.

9. The two countries will continue their efforts to promote regional economic cooperation, and eventually the consideration of a regional trade agreement consistent with GATT (WTO).

Finance and Banking

1. The parties had positive discussions concerning issues raised in implementing the Jordan-Israel memorandum of understanding (MOU) on banking. The two countries agreed to amend the MOU to include the opening, operation and supervision of banking subsidiaries of Jordanian banks in the West Bank.

They expressed appreciation for the positive experience of the branches of Jordanian banks which have already reopened. Israel reported the approval of a new license to open a branch of another Jordanian bank, to be announced next week.

2. The two countries had useful discussions about sharing information on the Agricultural Credit Cooperative (ACC) loans.

3. Israel reaffirmed its willingness to keep Jordan informed on developments concerning introduction of a Palestinian currency.

Group II - Cooperative Projects

A) The Jordan Rift Valley

The subgroup on the Jordan Rift Valley (JRV) agreed to have studies conducted for the preparation of a master plan for the integrated development of the JRV, including a canal linking the Red Sea to the Dead Sea.

The two parties agreed that projects to be included are in the sectors of water and irrigated agriculture, energy, environment, transport, specialized industries, tourism, communications and human resources in development.

A unified planning document has been produced by the U.S. delegation, based on the position papers forwarded to it by Jordan and Israel. The two parties agreed that a committee be formed to follow up on the integrated development of the Jordan Rift Valley, and to hold for it an intersessional meeting for purposes of.

a. Finalizing the planning document.

b. Finalizing Terms of Reference for consulting services to prepare the Master Plan.

The intersessional meeting was agreed to take place in Washington, D.C. in August/ September 1994.

The two parties also agreed to form subcommittees as needed to follow up on certain aspects of the JRV development. Examples are subcommittees on binational parks, and another on water, energy and the environment. The subcommittees will be entrusted with supporting the planning efforts of the JRV development committee.

B) Binational Parks

Within the context of the integrated development of the Jordan Rift Valley, the parties agreed to:

1. Form a technical trilateral subcommittee to follow up the preparations for the establishment of a binational park in the Jordan Rift Valley, and the requirements for its development and operations.

2. The binational park is to balance the requirements of environmental protection, tourism and other beneficial uses.

3. The subcommittee may also consider other areas of cooperation along the common frontiers to promote tourism and environmental protection, such areas as attractive natural and man-made assets, including the Marine Park and Reserve Unit in the vicinity of Aqaba/Eilat integrated development scheme.

4. Accept the invitation of the United States to host, within the context of the subcommittee, members for a late August-early September study tour of select U.S. National Parks and prepare their report for the Action Plan prior to September 30, 1994, for further transfrontier and binational parks collaboration.

C) Tourism

The parties agreed to facilitate the passage of tourists who are third country nationals across borders in both directions. With this in view, the parties agreed to move to open a crossing point in the Eilat-Aqaba area for tourists who are third country nationals as soon as possible. The parties agreed that this initiative will be undertaken in conjunction with mutual efforts to assure that both countries benefit through longer-duration tourism. These joints efforts will include cooperation in marketing and managing package tours combining multiple sites in Israel and Jordan. The parties agreed:

On the need to preserve the natural and historic environment as a heritage for future generations, in particular sites which may be threatened by excessive tourism traffic.

- To focus due attention on the development of historic, cultural, religious and nature sites.

- To joint planning/ promotion of tourism at therapeutic and recreational sites, including the Dead Sea and the Red Sea.

- On the need for cooperation in developing tourism infrastructure.

- On the value of joint marketing efforts, including joint "familiarization visit" invitations to travel agencies, tour operators and the media.

- To examine the U.S.-Israel tourism agreement with the possibility of including Jordan at a future time.

The U.S. provided a draft Jordan-Israel tourism agreement to be reviewed by both parties.

To advance these and other objectives, the parties agreed to establish a Tourism Committee (TC) to guide and review the work of four Jordan-Israel working groups as follows:

1. A working group to develop a regional tourism master plan.

2. A working group to facilitate the free movement of third country tourists.

3. A working group for marketing and promotion.

4. A working group to develop plans for the Red Sea Riviera in conjunction with discussions already underway between Israel and Egypt.

The parties agreed that the TC and the working groups will include private

sector representatives, and that each working group will meet at least once before November 1994.

The parties agreed that tourism considerations are an important dimension in the

development of regional parks, such as the proposed underwater park in the Red Sea and a "lowest point on earth" park in the Dead Sea area.

The parties agreed to establish -a Trilateral Tourism Commission (TTC) to follow up on a temporary basis the activities of the TC and its working groups, providing guidance as necessary. The first meeting of the Trilateral Tourism Commission will take place in late November.

The parties agreed to study the potential for cooperation in tourism with the Palestinian Authority.

D) The Road Project

1. In the context of the Jordan Valley Regional master plan, the parties agree to initiate a feasibility study for the proposed road linking Jordan and Israel at the Rift Valley, in the general vicinity of Aqaba and Eilat; the study will address the following:

1.1 Validate the proposed road function as stated in the meeting summary of the Trilateral meeting held in Washington, D.C. on June 6-7, 1994.

1.2 Local community and area master plans.

1.3 The study should address how the proposed road will be made as a part of the Rift Valley Social, Economic and Environmental Master Plan.

1.4 The study shall take into consideration the national and regional transportation plans.

1.5 The study shall propose options on how the road should be financed.

2. Before the construction of the road, both parties will consider the next operative steps in accordance with the agreements between them, including the subject of the borders and any other issues.

3. The parties agree to establish a working group to define the technical parameters of the project. The group shall:

3.1 Define the terms of reference for the feasibility study.

3.2 Conduct visits and technical meetings.

3.3 Develop an agreement for defining the responsibilities for execution of the project design and construction.

3.4 The working group will establish a timetable for all phases of the project.

4. The working group shall meet in August/ September 1994 to mutually approve terms of reference for the feasibility study.

4.1 The feasibility study will be completed before the end of 1994.

5. The parties agree to seek financial assistance for the road project from the United States Government.

6. The target date for the start of construction shall be in the year 1995.

Group III - Civil Aviation

The parties agree to establish a working group for the purpose of deciding the

actions necessary to develop and implement a cooperative civil aviation arrangement on a reciprocal basis between the two parties. Action to establish the working group will be taken immediately.

Agreement on the following issues is necessary to determine the action required for

implementation. Discussion will begin immediately and agreement will be reached by October 20, 1994.

1. Flyover rights.

2. Airspace utilization methods, such as air corridors.

3. Air traffic services.

4. Communications.

5. Civil aviation security requirements.

The following items will be discussed by the group in the normal evolution of cooperation between the two parties.

1. FIR boundaries.

2. UIR configuration and operation.

3. Flight corridors.

4. Coordination/ modernization and operation of navigations/ communications/ landing facilities.

5. Meteorological services.

6. Search and rescue.

7. Eilat and Aqaba airport complex.

8. Special, non-commercial flights.

9. Implementation of GNSS, CNS/ ATM.

10. Third country participation.

The parties will consider the possibilities of a bilateral agreement in due time.

Source: Israeli Ministry of Foreign Affairs