Senate Passes Free-Trade Pact With Key Ally Jordan

WASHINGTON —  Congress on Monday gave President Bush another tool to use in his campaign against terrorism, approving a trade agreement designed to reward a key ally for helping the United States achieve its foreign policy goals in the Middle East.

By voice vote, the Senate passed the U.S.-Jordan Free Trade Agreement, which eliminates virtually all tariffs and other trade restrictions between the two countries. The pact was approved by the House on July 31 and the president is expected to sign it this week.

Approval of the free-trade agreement, America’s first with an Arab nation, is intended to show U.S. appreciation of Jordan’s efforts in supporting the Mideast peace process and in combating international terrorism. Supporters said it would help the administration persuade other governments to crack down on terrorist organizations in the aftermath of the Sept. 11 attacks in New York and Virginia.

“This agreement signals that the United States is not the enemy of the Arab and Islamic world,” said Senate Majority Leader Tom Daschle (D-S.D.). “We are waging a war on terrorism. Jordan’s participation in this international coalition will only hasten our triumph.”

In a written statement, Bush praised Congress for advancing U.S. relations with “a valued friend and partner.” He said the pact would create jobs and investment opportunities in both countries. “The agreement . . . sends a strong signal to Jordan, as well as other countries in the region, that support for peace and economic reform yields concrete benefits,” Bush said.

The rush to pass the Jordan trade pact illustrates how the Sept. 11 attacks have recalibrated the politics of normally divisive issues such as trade. Polls show that Americans overwhelmingly support President Bush’s response to the tragedy, and members of Congress are reluctant to oppose anything the president says is needed to help with the recovery and protect against future attacks.

In the administration’s view, the ultimate prize would be restoration of the president’s authority to negotiate trade deals that could not be amended by Congress. That power, traditionally called “fast-track” but renamed “trade promotion authority” by the Bush team, lapsed in 1994 after the bitter battle over the North American Free Trade Agreement. Opponents have derailed several efforts to renew it.

Free-trade advocates on Capitol Hill have been trying to forge a compromise on the issue, and some said the aftershocks of the terrorist attacks have put a deal within reach.

“There are some [legislators] who were on the fence in the past who’ve said they know this is a moment of national challenge, and they’ll support the president on this,” U.S. Trade Representative Robert B. Zoellick said Monday.

Approval of the U.S.-Jordan agreement is expected to help Jordan’s King Abdullah, who faces opposition inside his country for endorsing the U.S.-led campaign against terrorism. Abdullah is traveling to Washington to meet with Bush on Friday.

As U.S. trading partners go, Jordan barely shows up on the ledger books. Last year, it supplied Americans with $73 million worth of jewelry, clothing, carpets, antiques and other goods and services--a minuscule slice of total U.S. imports of $1.4 trillion. U.S. exports to Jordan were $317 million last year. Wheat, corn, rice and airplane parts were the leading export items.

While the volume of trade is tiny, the U.S.-Jordan agreement loomed large on Washington’s political agenda even before the Sept. 11 attacks.

Negotiated by former President Clinton’s trade team, it is the first U.S. trade agreement to contain binding commitments, enforceable by sanctions, to adhere to environmental and workplace standards.

Republican legislators who normally back trade pacts opposed the labor and environmental provisions, and the agreement stalled on Capitol Hill.

However, the terrorist attacks changed the political equation. Sen. Phil Gramm (R-Texas), who had threatened to block action on the measure, said he and other opponents had agreed to set aside their objections in the interests of national security.

Jordan is the fourth country to enter into a free-trade agreement with the United States. Israel was the first in 1985, followed by Canada and Mexico under the NAFTA accord in 1994.

The agreement owes its existence largely to the politics of the Middle East. Jordan is an arid, landlocked nation afflicted by periodic famines and chronic poverty. After Jordan and Israel signed a peace treaty in 1994, the United States became a major benefactor to the kingdom, providing it with financial aid, forgiving its debts and gradually improving the terms of bilateral trade.

“The Jordan deal was essentially a political deal to begin with. There was very little economic impact to it,” said Jeffrey Schott, a trade specialist at the Institute for International Economics in Washington. “It was done specifically to strengthen our political ties with one of our strongest allies in the Arab world.”

The relationship has assumed larger proportions since Sept. 11 because of Jordan’s past--and potential future--assistance in fighting terrorism.

In late 1999, Jordanian security forces broke up a cell of Islamic militants who were planning to attack U.S. and Israeli targets during millennium celebrations. Jordan is believed to have shared intelligence information with the United States in the past, and it could play a key role in the terrorism crackdown launched by Bush last week.

Besides demonstrating America’s appreciation for Jordan’s cooperation, the accord is expected to reduce Jordan’s reliance on neighboring Iraq as a major trading partner.

*

Times staff writer James Gerstenzang contributed to this report.