WORLD TRADE  
ORGANIZATION  WT/REG134/6 
10 April 2006 
 
 (06-1659) 
Committee on Regional Trade Agreements Original:   English 
  
 
FREE TRADE AGREEMENT BETWEEN THE UNITED  STATES AND JORDAN 
 
Questions and Replies
 
  
 The following communication, dated 3 April 2006, is being circulated at the request of the 
Delegations of the United States and Jordan.    This document reproduces the questions addressed  to the Parties and the responses submitted. 
The questions and replies set out below are or ganized in accordance with document WT/REG134/3 
for the goods aspects of the Agreement, and WT/R EG134/4 for the services aspects of the Agreement. 
  
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GOODS ASPECTS
 
 
 
II. TRADE PROVISIONS 
 3. Rules of Origin 
 
1. Document  WT/REG134/M1, page 2, states that  “On rules of origin, [..]; with respect to 
textiles, the rules of origin were the same as thos e used by the US for everyday trade in textiles” 
whereas in document WT/REG134/3, pages 2-3, there is no special reference to a differential origin criteria for textiles and apparel. Coul d the United States specify which ROOs scheme 
applies for textiles and apparel?    
 The rules of origin for textiles and appare l under the Agreement are the general criteria 
described in Section II.3 of WT/REG134/3.  That is, in order to qualify for preferential tariff treatment under the Agreement, textile and a pparel articles must meet a 35 per cent value added test, be imported 
directly from one Party into the other Party, and be  substantially transformed in the territory of a 
Party.  The rules for determining whether a text ile or apparel article has been "substantially 
transformed" in the territory   of a Party are thos e that apply to regular, MFN/NTR, trade in textiles 
(i.e., everyday trade in textiles).   
 
2. As regards Qualifying Industrial Zone (QIZ ) scheme, in the last Examination, the 
Parties informed that the QIZ program did no t expire with the entry into force of the FTA 
(WT/REG134/5, page 2). Could the United Stat es elaborate on the QIZ compatibility with WTO 
regulation? On which basis do the Parties defe nd the coexistence of the QIZ program, US-Israel 
and US-Jordan FTA and WTO consistency?    
 As the Parties described in WT/REG134/5, qu estion 2, “[t]he QIZ program was created in 
1996 through an amendment to the authorizing legislation for the U.S.-Israel FTA.”  The 
QIZ program thus was not implemented in connection with the U.S.-Jordan FTA.   WT/REG134/6 
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  5. Safeguards 
 
3. The European Communities takes note of the views expressed by the United States and 
Jordan on the question of the application of sa feguard measures among parties to a FTA. The 
European Communities wishes to stress that this  issue is still unresolved in WTO law and 
jurisprudence. It is correct that the panel in United States – Line Pipe  stated that Article XXIV 
of GATT 1994 permits FTA partners to exclude each other from safeguard measures. However, as recalled by the United States and Jordan, the Appellate Body expressly modified the panel’s 
findings and conclusions on these points by declar ing them moot and having no legal effect. For 
these reasons, the European Communities would lik e to ask whether the US and Jordan do not 
agree that, in the light of their statement that the panel’s analysis “ remains the only analysis of 
this question in a WTO report”,  the United States – Line Pipe  report contains as many analyses as 
there were parties intervening on this issue?    
 The United States does not agree with the EC’s observation at all.  The findings made were 
those of the panel, they are not the analyses of th e parties.  These findings were not adopted because 
they were unnecessary in light of the Appellate Body’s findings on other issues.  However, as the 
WTO Appellate Body has found, the views of unadopted panel reports can be persuasive.   
 
 III. GENERAL PROVISIONS OF THE AGREEMENT  
3. Dispute Settlement Procedures  
4. Art. 17 of the FTA describes the functioning of the Bilateral Dispute Settlement 
Mechanism  and more specifically: 
 - Art. 17.4.c establishes “Nothing in this subparagraph shall allow a Party to 
invoke the dispute settlement mechanism of both this Article and another 
international dispute settlement mechanism with regard to the same claim”. It is 
understood that the multilateral and bilat eral mechanisms cannot be used at the 
same time in the same conflict but: 
 
(a) Does this mean that the use of a certain mechanism entails giving up the 
possibility of using another mechanism? 
 It means that a complaining party cannot e ngage in dispute settlement twice over the same 
claim.  
  
(b) Could the United States clarify whether there are instructions of which dispute 
settlement mechanism, the bilateral or multilateral, should be used first?  
 No.  The Agreement does not require a party to use any mechanism first.   
 
 - Art. 17.1.d. says “The report of  the Panel shall be non-binding”.  
 
(c) So, if the multilateral mechanism cannot be  used after the ending of the bilateral 
mechanism, and the bilateral mechanism is non-binding, how can the resolution 
of disputes be guaranteed?  
 While the report of the panel is “non-binding,” such that the recommendations do not bind a 
Party, Article 17.2(a) provides that the report will be taken into account by the Joint Committee in its 
efforts to resolve the dispute.  In light of the wi de range of bilateral ties between the United States and  WT/REG134/6 
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  Jordan and the spirit of collabora tion that characterizes our relati ons, we consider that bilateral 
consultations and other procedures provided for under the agreement will help to secure a mutually 
satisfactory resolution.   
 
Environment  
 
5. Do the US and Jordan foresee any circumstances in which the provisions of Article 5 of 
the Agreement could apply for the subject of dispute settlement proceedings?    
 Article 5 includes a commitment by each governme nt to effectively enforce its environmental 
laws.  The other environmental commitments in the article are formulated as “strive to” commitments, 
which limit the extent to which they could, in theo ry, be addressed in dispute settlement.  However, to 
date, no dispute under Article 5 has arisen.     
IV. OTHER 
 Geographical Indications
 
 
6. Can the United States confirm whether trademarks that meet the definition in footnote 8 
of the Agreement constitute geographical indications?      
 Footnote 8 of the Agreement addresses the extent  to which a geographic indication is capable 
of constituting a trademark.  A trademark may cons titute a geographical indication where it consists 
of an indication that meets the definition of  geographical indication in the Agreement.   
 
7. Does the Agreement prevent from or limit in any way the right of the Parties of 
establishing or maintaining a sui generis  system for the protection of Geographical Indications?   
 No, provided that the system fulfils the obligations in the Agreement.   
 
8. The Agreement does not include a specific section on Geographical Indications, as the 
TRIPS Agreement does, but only refers to Geographical Indications protected through 
trademarks. In addition, the level of protection set in the Agreement for trademarks corresponds to the level established in the TRIPS Agreement (Art. 16). Does this in any way 
affect the minimum level of protection that th e Parties are obliged to implement in their 
legislation in accordance with Articles 22 and 23 of the TRIPS? If yes, in which respect?    
 The Agreement does not affect the obligations of the Parties arising under the 
TRIPS Agreement with respect to the levels of protection for geographical indications.   
 9. Does the Agreement in any way seek to implem ent or enhance the level of protection for 
geographical indications enshrined in Section 3, Part II of the TRIPS Agreement?    
The Agreement does not specifically address the level of protection for geographical 
indications provided for under the TRIPS Agreement.  
 
(a) If the answer is no: 
 - What is the purpose of including geographi cal indications in the Agreement if it 
is not to implement the minimum prot ection or more extensive protection for 
geographical indications that is required by the TRIPS Agreement? 
 WT/REG134/6 
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   Article 4.6 – 4.9 of the Agreement, among othe r things, clarifies that geographical indications 
are capable of constituting trademarks and of be ing protected through a trademark system, and 
clarifies that trademark owners (including of trad emarks constituting geogra phical indications) have 
rights vis-a-vis the confusing use of their signs , even if those signs constitute geographical 
indications.    
(b) If the answer is yes:  
 - Would any use of a sign on goods or services indicating or suggesting that the 
good or service in question originates in a geographical area other than the true 
place of origin in a manner which misleads the public as to the true place of 
origin of the good or service, or constitutes an act of unfair competition within 
the meaning of Art. 10 of the Paris Convention, be deemed to result in a likelihood of confusion in accordance with Art. 4.7 of the Agreement? 
 
 - Would a geographical indication falling under Article 23 of the TRIPS and 
protected through a trademark in any of the Parties have recourse to protection 
under the Agreement?  Would any use of su ch protected geographical indication 
by third parties not having the owner’ s consent be deemed to result in a 
likelihood of confusion in all cases where the goods or services do not originate in the place indicated, even where the true origin of the goods or services is indicated or the geographical indication is used in translation or accompanied by 
expressions such as “kind”, type”, “style”,  “imitation” or the like? If the answer 
to the preceding question is no, how does the Agreement comply with the 
minimum level of protection for geographical indications required under Art. 23 of the TRIPS Agreement? 
  Whether the particular use of a sign results in a likelihood of confus ion would depend on the 
particular facts at issue under the domestic laws of th e Parties, and cannot be determined in a vacuum.  
Further, it is useful to recall also that the Agreement does not take away from the rights and 
obligations of the Parties under the TRIPS Agreement.    
10. Does the Agreement in any way affect th e balance of the relationship between 
geographical indications and trademarks as est ablished in the TRIPS Agreement? If yes, in 
which respect? 
 No, the Agreement reflects the relationshi p set out in the TRIPS Agreement between 
trademarks and geographical indications.    11. What is the reason for not having included in the text of the Agreement a provision 
equivalent to Art. 17 of the TRIPS Agreement, similar to the provisions included in Articles 16.2.3 of the US-Singapore FTA and 17.2.5 of the US-Chile FTA? 
 No significance should be read into this diffe rence between the FTAs cited.  Trademark rights 
are subject to certain narrow exceptions as set out in the TRIPS Agreement.  
 
12. Would it be possible in any of the Parties for the local producers of a good that could 
qualify as a geographical indication to register thei r geographical indication even if it were the 
same as, or confusingly similar to, a trademark not meeting the definition of footnote 8 of the Agreement but obtained before the application fo r registration of the geographical indication? 
 Protection of any sign is decided on a case by case basis, as is whether or not the use of that 
sign vis-à-vis a prior trademark would cause a likeli hood of confusion.  Any de termination of whether  WT/REG134/6 
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  the sign can be protected, and whether a prior trad emark owner can prevent its  use, would depend on 
the specific facts.  In addition, a registered trad emark has a presumption of validity, which any later 
claimant to a sign would have to address if the use of the later sign would create a likelihood of confusion.      
SERVICES ASPECTS
 
  
I. BACKGROUND INFORMATION ON THE AGREEMENT  3. Scope 
 
13. In view of the fact that in document WT /REG134/5 the Unites States replied that their 
commitments under this agreement are “equivalent to those undertaken in the GATS” could the 
United States specify under which terms this agreement complies with the requirements of 
Article V GATS?    
 The FTA liberalizes services trade between Jord an and the United States.  The FTA is fully 
consistent with the requirements of GATS Article V, including but not limited to the requirement to 
have substantial sectoral coverage and to provide for the absence or elimination of substantially all 
discrimination in the sense of Article XVII.  
 
14. We note from the Standard Format that the agreement appears to cover substantially 
all sectors. Have all the reservations in the sch edule of commitments been eliminated? Can the 
Parties list all sectors covered by the Agreement?   
 There has been no attempt to lift the few restrictions in the schedules of commitments.  
Regarding the sectors covered by the Agreement, please refer to the schedules themselves.  It is 
evident that the Agreement provides “substantial sectoral coverage”.   
  
15. Does the agreement contain a ratchet mech anism to automatically bind further 
liberalisation of commitments not included in the current positive list?   
 The Agreement does not contain a ratchet mechanism.   
 
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