TITLE II

TITLE II - FREE MOVEMENT OF GOODS
BASIC PRINCIPLES

ARTICLE 6

The Community and Jordan shall gradually establish a free trade area over a transitional period lasting a maximum of 12 years starting from the date of the entry into force of this Agreement in accordance with the provisions of this Agreement and in conformity with those of the General Agreement on Tariffs and Trade (1994), hereinafter referred to as the "GATT".

CHAPTER 1
INDUSTRIAL PRODUCTS

ARTICLE 7

The provisions of this Chapter shall apply to products originating in the Community and Jordan other than those listed in Annex II to the Treaty establishing the European Community.

ARTICLE 8

No new customs duties on imports, or any other charge having equivalent effect, shall be introduced on trade between the Community and Jordan.

ARTICLE 9

Imports into the Community of products originating in Jordan shall be allowed free of customs duties and of any other charge having equivalent effect and free of quantitative restrictions and of any other measure having equivalent effect.

ARTICLE 10

1.	(a)	The provisions of this Chapter shall not preclude the retention by the Community of an agricultural component in respect of goods originating in Jordan and listed in Annex I.
	(b)	The agricultural component may take the form of a flat rate amount or an ad valorem duty.
	(c)	The provisions of Chapter 2 applicable to agricultural products shall apply mutatis mutandis to the agricultural component.
2.	(a)	The provisions of this Chapter shall not preclude the retention by Jordan of an agricultural component in respect of goods originating in the Community and listed in Annex II.
	(b)	The agricultural components which, pursuant to subparagraph (a), Jordan may charge on imports from the Community shall not exceed 50% of the basic duty rate charged on imports from countries not benefiting from preferential trading arrangements but benefiting from most favoured nation treatment.
	(c)	If Jordan proves that the equivalence of the duties applicable to the agricultural products incorporated in the goods listed in Annex II exceed the maximum rate set out in subparagraph (b) the Association Council may agree on a higher rate.
	(d)	Jordan may enlarge the list of goods to which this agricultural component applies, provided the goods are included in Annex I. Before its adoption, this agricultural component shall be notified for examination to the Association Committee which may take any decision needed.
	(e)	For the products listed in Annex II originating in the Community, Jordan shall apply from the entry into force of the Agreement customs duties on import and charges having equivalent effect not higher than those in force on 1 January 1996.
3.		As regards the industrial element of the products listed in Annex II originating in the Community, Jordan shall progressively abolish the customs duties on imports or charges having equivalent effect according to the provisions of Article 11.
4.		Where, in trade between the Community and Jordan, the charge applicable to a basic agricultural product is reduced, or where such reductions are the result of mutual concessions for processed agricultural products, the agricultural components applied in conformity with paragraphs 1 and 2 may be reduced.
5.		The reduction provided for in paragraph 4, the list of goods concerned and, where applicable, the tariff quotas to which the reduction refers, shall be established by the Association Council.

ARTICLE 11

1.		Customs duties and charges having equivalent effect applicable on import into Jordan of products originating in the Community, other than those listed in Annexes II, III and IV, shall be abolished upon the entry into force of this Agreement.
2.		Pursuant to Article 10(2)(b) and (3), the total customs duties and charges having equivalent effect applicable on import into Jordan of processed agricultural products originating in the Community listed in Annex II shall be progressively abolished in accordance with the following schedule:
		-	four years after the date of entry into force of this Agreement each duty and charge shall be reduced by 10% of the basic duty;
		-	five years after the date of entry into force of this Agreement each duty and charge shall be reduced by 20% of the basic duty;
		-	six years after the date of entry into force of this Agreement each duty and charge shall be reduced by 30% of the basic duty;
		-	seven years after the date of entry into force of this Agreement each duty and charge shall be reduced by 40% of the basic duty;
		-	eight years after the date of entry into force of this Agreement each duty and charge shall be reduced by 50% of the basic duty.
3.		Customs duties and charges having equivalent effect applicable on import into Jordan of products originating in the Community listed in list A of Annex III shall be progressively abolished in accordance with the following schedule:
		-	on the date of entry into force of this Agreement each duty and charge shall be reduced to 80% of the basic duty;
		-	one year after the date of entry into force of this Agreement each duty and charge shall be reduced to 60% of the basic duty;
		-	two years after the date of entry into force of this Agreement each duty and charge shall be reduced to 40% of the basic duty;
		-	three years after the date of entry into force of this Agreement each duty and charge shall be reduced to 20% of the basic duty;
		-	four years after the date of entry into force of this Agreement the remaining duty and charge shall be abolished.
4.		Customs duties and charges having equivalent effect applicable on import into Jordan of products originating in the Community listed in list B of Annex III shall be progressively abolished in accordance with the following schedule:
	-	four years after the date of entry into force of this Agreement each duty and charge shall be reduced to 90% of the basic duty;
	-	five years after the date of entry into force of this Agreement each duty and charge shall be reduced to 80% of the basic duty;
	-	six years after the date of entry into force of this Agreement each duty and charge shall be reduced to 70% of the basic duty;
	-	seven years after the date of entry into force of this Agreement each duty and charge shall be reduced to 60% of the basic duty;
	-	eight years after the date of entry into force of this Agreement each duty and charge shall be reduced to 50% of the basic duty;
	--	nine years after the date of entry into force of this Agreement each duty and charge shall be reduced to 40% of the basic duty;
	-	ten years after the date of entry into force of this Agreement each duty and charge shall be reduced to 30% of the basic duty;
	-	eleven years after the date of entry into force of this Agreement each duty and charge shall be reduced to 20% of the basic duty;
	-	twelve years after the date of entry into force of this Agreement the remaining duty and charge shall be abolished.
5.		As regards the products listed in Annex IV, the arrangements to be applied shall be re-examined by the Association Council four years after the date of entry into force of the Agreement. At the time of that re-examination, the Association Council shall establish a tariff dismantling schedule for the products appearing in Annex IV.
6.		In the event of serious difficulties for a given product, the relevant timetables in accordance with paragraphs 2, 3 and 4 may be reviewed by the Association Committee by common accord on the understanding that the timetable for which the review has been requested may not be extended in respect of the product concerned beyond the maximum transitional period of 12 years. If the Association Committee has not taken a decision within thirty days of its application to review the timetable, Jordan may suspend the timetable provisionally for a period which may not exceed one year.
7.		For each product the basic duty to which the successive reductions laid down in paragraphs 2, 3 and 4 are to be applied shall be that actually applied vis a vis the Community on 1 January 1996.
8.		If, after 1 January 1996, any tariff reduction is applied on an erga omnes basis, the reduced duties shall replace the basic duties referred to in paragraph 7 as from the date when such reductions are applied.
9.		Jordan shall notify the Community of its basic duties.

ARTICLE 12

The provisions concerning the abolition of customs duties on imports shall also apply to customs duties of a fiscal nature.

ARTICLE 13

Exceptional measures of limited duration which derogate from the provisions of Article 11 may be taken by Jordan in the form of an increase or reintroduction of customs duties.

These measures may only concern infant industries, or certain sectors undergoing restructuring or facing serious difficulties, particularly where these difficulties produce major social problems.

Customs duties applicable on import into Jordan of products originating in the Community introduced by these measures may not exceed 25% ad valorem and shall maintain an element of preference for products originating in the Community. The total yearly average value of imports of the products which are subject to these measures may not exceed 20% of the total yearly average value of imports of industrial products originating in the Community during the last three years for which statistics are available.

These measures shall be applied for a period not exceeding five years unless a longer duration is authorized by the Association Committee. They shall cease to apply at the latest on the expiry of the maximum transitional period of twelve years.

No such measures may be introduced in respect of a product if more than four years have elapsed since the elimination of all duties and quantitative restrictions or charges or measures having equivalent effect concerning that product.

Jordan shall inform the Association Committee of any exceptional measures it intends to take and, at the request of the Community, consultations shall be held on such measures and the sectors to which they apply before they are implemented. When taking such measures Jordan shall provide the Committee with a timetable for the elimination of the customs duties introduced under this Article. This timetable shall provide for a phasing out of these duties in equal annual instalments starting at the latest two years after their introduction. The Association Committee may decide on a different timetable.

By way of derogation from the fourth subparagraph of paragraph 1, the Association Committee may exceptionally, in order to take account of the difficulties involved in setting up a new industry and when certain sectors are undergoing restructuring or facing serious difficulties, authorize Jordan to maintain the measures already taken pursuant to paragraph 1 for a maximum period of three years beyond the twelve year transitional period.

CHAPTER 2
AGRICULTURAL PRODUCTS

ARTICLE 14

The provisions of this Chapter shall apply to products originating in the Community and Jordan and listed in Annex II to the Treaty establishing the European Community.

ARTICLE 15

The Community and Jordan shall gradually implement greater liberalization of their reciprocal trade in agricultural products.

ARTICLE 16

1.	Agricultural products originating in Jordan shall benefit on import into the Community from the provisions set out in Protocol 1.
2.	Agricultural products originating in the Community shall benefit on import into Jordan from the provisions set out in Protocol 2.

ARTICLE 17

1.	From 1 January 2002, the Community and Jordan shall assess the situation with a view to determining the liberalization measures to be applied by the Community and Jordan with effect from 1 January 2003 in accordance with the objective set out in Article 15.
2.	Without prejudice to the provisions of the preceding paragraph and taking account of the patterns of trade in agricultural products between the Parties and the particular sensitivity of such products, the Community and Jordan may examine on a regular basis in the Association Council, product by product and on a reciprocal basis, the possibilities of granting each other further concessions.

CHAPTER 3
COMMON PROVISIONS

ARTICLE 18

1.	No new quantitative restriction on imports and measures having equivalent effect shall be introduced in trade between the Community and Jordan.
2.	Quantitative restrictions on imports and measures having equivalent effect on trade between the Community and Jordan shall be abolished upon the entry into force of this Agreement.
3.	The Community and Jordan shall not apply to exports between themselves either customs duties or charges having equivalent effect, or quantitative restrictions or measures having equivalent effect.

ARTICLE 19

1.	In the event of specific rules being introduced as a result of the implementation of its agricultural policy or of any alteration of the current rules or in the event of any alteration or extension of the provisions relating to the implementation of its agricultural policy, the Party concerned may amend the arrangements resulting from the Agreement in respect of the products concerned.
2.	In such cases the Party concerned shall inform the Association Committee. At the request of the other Party, the Association Committee shall meet to take due account of the interests of the other Party.
3.	If the Community or Jordan, in applying paragraph 1, modifies the arrangements made by this Agreement for agricultural products, they shall accord imports originating in the other Party an advantage comparable to that provided for in this Agreement.
4.	The application of this Article may be the subject of consultations in the Association Council.

ARTICLE 20

1.	Products originating in Jordan shall not on importation into the Community be accorded a treatment more favourable than that which the Member States apply among themselves.
2.	Application of the provisions of this Agreement shall be without prejudice to Council Regulation (EEC) No 1911/91 of 26 June 1991 on the application of the provisions of Community law to the Canary Islands.

ARTICLE 21

1.	The Parties shall refrain from any measure or practice of an internal fiscal nature establishing, whether directly or indirectly, discrimination between the products of one Party and like products originating in the territory of the other Party.
2.	Products exported to the territory of one of the Parties may not benefit from repayment of indirect internal taxation in excess of the amount of indirect taxation imposed on them either directly or indirectly.

ARTICLE 22

The Agreement shall not preclude the maintenance or establishment of customs unions, free trade areas or arrangements for frontier trade, except insofar as they alter the trade arrangements provided for in the Agreement.

Consultation between the Community and Jordan shall take place within the Association Council concerning agreements establishing customs unions or free trade areas and, where appropriate, on other major issues related to their respective trade policy with third countries. In particular, in the event of a third country acceding to the Union, such consultation shall take place so as to ensure that account may be taken of the mutual interests of the Community and Jordan.

ARTICLE 23

If one of the Parties finds that dumping is taking place in trade with the other Party within the meaning of Article VI of the GATT, it may take appropriate measures against this practice in accordance with the Agreement on implementation of Article VI of the GATT and with its relevant internal legislation, under the conditions and in accordance with the procedures laid down in Article 26.

ARTICLE 24

Where any product is being imported in such increased quantities and under such conditions as to cause or threaten to cause:

-	serious injury to domestic producers of like or directly competitive products in all or part of the territory of one of the Parties, or
-	serious disturbances in any sector of the economy,

the Party concerned may take appropriate measures under the conditions and in accordance with the procedures laid down in Article 26.

ARTICLE 25

Where compliance with the provisions of Article 18(3) leads to:

the Party concerned may take appropriate measures under the conditions and in accordance with the procedures laid down in Article 26.

(i)	re export towards a third country against which the exporting Party maintains, for the product concerned, quantitative export restrictions, export duties or measures having equivalent effect, or
(ii)	a serious shortage, or threat thereof, of a product essential to the exporting Party,

and where the situations above referred to give rise, or are likely to give rise to major difficulties for the exporting Party, that Party may take appropriate measures under the conditions and in accordance with the procedures laid down in Article 26. The measures shall be non discriminatory and be eliminated when conditions no longer justify their maintenance.

ARTICLE 26

1.	In the event of the Community or Jordan subjecting imports of products liable to give rise to the difficulties referred to in Article 24 to an administrative procedure, the purpose of which is to provide rapid information on the trend of trade flows, it shall inform the other Party.
2.	In the cases specified in Articles 23, 24 and 25, before taking the measures provided for therein, or, as soon as possible in cases to which paragraph 3(d) applies, the Party in question shall supply the Association Committee with all relevant information required for a thorough examination of the situation with a view to seeking a solution acceptable to the Parties. In the selection of appropriate measures, priority must be given to those which least disturb the functioning of the Agreement. The safeguard measures shall be notified immediately to the Association Committee and shall be the subject of periodic consultations within the Committee, particularly with a view to their abolition as soon as circumstances permit.
3.	For the implementation of paragraph 2, the following provisions shall apply:
	(a)	as regards Article 23, the exporting Party shall be informed of the dumping case as soon as the authorities of the importing Party have initiated an investigation. Where no end has been put to the dumping within the meaning of Article VI of GATT or no other satisfactory solution has been reached within thirty days of the notification being made, the importing Party may adopt the appropriate measures;
	(b)	as regards Article 24, the difficulties arising from the situation referred to in that Article shall be referred for examination to the Association Committee, which may take any decision needed to put an end to such difficulties. If the Association Committee or the exporting Party has not taken a decision putting an end to the difficulties or no other satisfactory solution has been reached within thirty days of the matter being referred, the importing Party may adopt the appropriate measures to remedy the problem. These measures must not exceed the scope of what is necessary to remedy the difficulties which have arisen;
	(c)	as regards Article 25, the difficulties arising from the situations referred to in that Article shall be referred for examination to the Association Committee. The Association Committee may take any decision needed to put an end to the difficulties. If it has not taken such a decision within thirty days of the matter being referred to it, the exporting Party may apply appropriate measures on the exportation of the product concerned;
	(d)	where exceptional circumstances requiring immediate action make prior information or examination, as the case may be, impossible, the Party concerned may, in the situations specified in Articles 23, 24 and 25, apply forthwith such precautionary measures as are strictly necessary to remedy the situation, and shall inform the other Party immediately.

ARTICLE 27

Nothing in this Agreement shall preclude prohibitions or restrictions on imports, exports or goods in transit justified on grounds of public morality, public policy or public security; the protection of health and life of humans, animals or plants; the protection of national treasures possessing artistic, historic or archaeological value; or the protection of intellectual, industrial and commercial property or regulations concerning gold and silver. Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between the Parties.

ARTICLE 28

The concept of "originating products" for the application of the provisions of this Title and the methods of administrative cooperation relating to them are set out in Protocol 3.

ARTICLE 29

The Combined Nomenclature shall be used for the classification of goods in trade between the Parties.