On June 6, 2000, President Bill Clinton and King 'Abdullah II announced that the United Statesand Jordan would begin negotiations for a bilateral free trade agreement (FTA), (1) eventually leadingto reciprocal duty-free trade in goods. The United States and Jordan conducted three main roundsof negotiations before signing the FTA on October 24, 2000. The first round took place inWashington during the week of June 26, 2000 and was headed by then United States TradeRepresentative (USTR) Charlene Barshefsky and Jordanian Deputy Prime Minister and Minister ofState for Economic Affairs Dr. Muhammad al-Halayqah. The second and third rounds were heldin Amman, Jordan during the week of August 1, 2000, and in Washington during the week ofSeptember 11, 2000, respectively. During the October 2000 summit meeting at Sharm al-Sheikh,Egypt, King 'Abdullah reportedly expressed to President Clinton his desire to conclude thenegotiations as rapidly as possible. (2) Soon after, thetwo negotiating teams completed their talks andthe FTA was signed on October 24, 2000. (3) According to the agreement, the FTA's entry into force is "subject to the completion of necessary domestic legal procedures by each Party." The Clinton Administration submitted theagreement to the 107th Congress on January 6, 2001, and bills to implement the FTA were introducedin the Senate ( S. 643 ) on March 28, 2001, and in the House ( H.R. 1484 )on April 4, 2001 (for further details, see the sub-section entitled U.S.-Jordan FTA in the Congressional Interest section). The Jordanian parliament reportedly ratified the FTA by a vote ofacclamation on May 9, 2001. (4) The agreement willenter into force two months after the Partiesexchange written notification that the necessary domestic legal procedures have been completed. If the FTA wins U.S. congressional and Jordanian parliamentary approval, Jordan will become only the fourth country in the world to have a bilateral free trade agreement with the United States.Previous FTA's were concluded with Canada and Mexico, forming the North American Free TradeArea (NAFTA), and with Israel. In 1985, Congress strongly supported the U.S.-Israel FTA negotiated by the Reagan Administration. Congress began its approval process of the FTA on April 29, 1985 when the UnitedStates-Israel Free Trade Area Implementation Act (H.R. 2268) was introduced in theHouse. The House passed the bill unanimously on May 7, 1985 and the Senate passed it withoutamendment on May 23, 1985. President Reagan signed the bill into law ( P.L. 99-47 ) on June 11,1985. U.S.-Israeli bilateral trade has increased substantially since the conclusion of the FTA. Whenthe agreement was signed in 1985, total U.S.-Israeli bilateral trade amounted to $4.7 billion. Sincethen, the volume of bilateral trade has increased steadily, reaching more than $20.7 billion in 2000,representing more than a four-fold increase in total bilateral trade. (5) In 1996, Congress amended the United States-Israel Free Trade Area Implementation Act through the GSP Renewal Act of 1996 ( P.L. 104-234 ). (6) This legislation expanded the geographicscope of the U.S.-Israel FTA in two ways. First, it extended the FTA to cover goods produced ormanufactured in the West Bank and Gaza Strip. By providing Palestinian exporters with duty-freeaccess to the U.S. market, Congress hoped that such a 'peace dividend' would strengthen thePalestinian economy and thereby reinforce support for the peace process. The extension of theU.S.-Israel FTA to the West Bank and Gaza Strip has had a modest impact on direct Palestinianexports to the United States. In 1995, there were no such exports, but by 2000, the United Statesdirectly imported $4.8 million of Palestinian goods. (7) These figures might understate the actualamount of Palestinian exports to the United States in recent years because of Israel's continuing rolein heavily intermediating Palestinian trade with the rest of the world. In other words, somePalestinian goods may be exported indirectly to the United States via Israel, and therefore appear inU.S.-Israeli bilateral trade statistics. Second, P.L. 104-234 also granted the President additional proclamation authority to extend the U.S.-Israel FTA to cover products from qualifying industrial zones (QIZs) between Israel andJordan, and Israel and Egypt. QIZs are designed to further Arab-Israeli economic cooperation byproviding goods produced with certain levels of Israeli, Jordanian, Egyptian, or Palestinian contentduty-free access to the U.S. market. (For further details on Jordanian-Israeli QIZs, see the followingsection on Congressional Interest in the Jordanian Economy and CRS Report RS20529, UnitedStates-Israel Free Trade Area: Jordanian-Israeli Qualifying Industrial Zones , by [author name scrubbed],updated March 29, 2001.) Egypt has yet to express interest in participating in the QIZ program,probably because it entails a level of Arab-Israeli economic cooperation that Egypt would prefer toengage in only after the conclusion of a comprehensive regional peace. Although Egypt, for the time being, has decided not to participate in the QIZ program, some analysts have suggested Egypt as a potential candidate to be one of the United States' next free tradepartners. (8) Some Members of Congress haveexpressed interest in this idea as well. On August 4,2000, 26 Senators sent President Clinton a letter urging him to negotiate an FTA with Egypt thatwould form the basis for a Middle East Free Trade Region that would include Israel, the West Bankand Gaza Strip, Jordan, and Egypt. (9) On November1, 2000, 45 Representatives sent PresidentClinton a similar letter. While the conclusion of FTAs with Jordan and Egypt could form the basisfor a wider Middle East free trade region with the United States, negotiations for such anintra-regional zone would probably be politically unfeasible until a comprehensive regional peaceis achieved. In the early 1990s, before Jordan and Israel achieved substantive progress on their bilateral track of the peace process, Congress did not undertake any large-scale initiatives to assist the Jordanianeconomy. U.S. foreign assistance to Jordan was limited, largely due to U.S. concern over Jordan'srefusal to join the U.S.-led coalition against Iraq during the 1990-1991 Gulf War. However, afterJordan and Israel signed the Washington Declaration, which terminated the state of belligerencybetween Jordan and Israel, on July 25, 1994, and a peace treaty on October 26, 1994, (10) Congress andthe Clinton Administration took a number of initiatives intended to benefit the Jordanian economy. These steps have included increasing the level of bilateral economic and military assistanceprovided to Jordan, forgiving Jordan's debt to the United States, and establishing qualifyingindustrial zones (QIZs) in Jordan and Israel. The primary Congressional motivation behindattempting to improve the Jordanian economy has been to provide Jordan with a 'peace dividend'-aneconomic reward designed to demonstrate the benefits of peace to a Jordanian population that hassometimes criticized and protested its government's pace and depth of normalization of relationswith Israel. In recent years, one of the most visible aspects of Congressional interest in the Jordanian economy has been in the realms of foreign assistance and debt forgiveness. In the wake of theWashington Declaration, President Clinton promised King Hussein that he would work towardsforgiving Jordan's debt to the United States. Congress responded with subsidy appropriationsmainly in FY1994 and FY1995 that forgave the equivalent of roughly $700 million of Jordanian debtto the United States. Beginning in FY1996, Congress agreed to increase first military and theneconomic assistance to Jordan. In FY1999 and FY2000, at the request of the ClintonAdministration, Congress also earmarked $300 million for Jordan in its supplemental appropriationsfor funding the 1998 Israeli-Palestinian Wye River Memorandum. Congress provided Jordan withWye River funds in gratitude for King Hussein's prominent role in mediating the agreement and tohelp Jordan withstand internal and regional opposition to its supportive role. Table 1 providesasummary of U.S. assistance and debt forgiveness to Jordan since FY1993. (For further details onU.S. assistance to Jordan, see CRS Issue Brief IB93085, Jordan: U.S. Relations and Bilateral Issues ,by [author name scrubbed], updated regularly.) Table 1. U.S. Foreign Assistance to Jordan, FY1993 to FY2001 (All figures in Millions of U.S. Dollars) a. Economic assistance includes Economic Support Funds (ESF), Development Assistance, Food Assistance, and Peace Corps. b. Military assistance includes Foreign Military Financing (FMF), Drawdowns of MilitaryEquipment, International Military Education and Training (IMET), and De-Mining Operations. Debt forgiveness amounts represent subsidy appropriations, which under the scoring proceduresemployed forgave $702.3 million of Jordanian debt to the United States. Figures for FY1999 and FY2000 include additional appropriations that Jordan has received orwill receive for its role in helping to mediate the Israeli-Palestinian Wye River Memorandum. Some FY2000 Wye River appropriations might not be obligated until FY2001 or FY2002. Apart from foreign assistance and debt forgiveness, Congress has also promoted jointJordanian-Israeli economic ventures through the Qualifying Industrial Zones (QIZ) program. In1996, Congress adopted this program as an amendment to the United States-Israel Free Trade AreaImplementation Act of 1985 (H.R.