EU-Jordan Association Council meets

1. The European Union welcomes this second meeting of the Association Council. It will enable us to step up efforts for the development of our bilateral relations and take stock of progress made in the implementation of the Association Agreement. With the entry into force of the Association Agreement on 1 May 2002, a new dimension of enhanced co-operation in the political, economic and social spheres has been opened in the relations between the European Union and Jordan. The excellent state of bilateral relations and the importance attached by both sides to maintaining a solid relationship is reflected, notably, in the visits of high-ranking representatives from the EU to Jordan and visits of senior members of the Government of Jordan to the EU.

Time has been put to profit during the first year of application of the Association Agreement.Significant efforts have been made in order to bring the Association Process rapidly up to speed. However, work on implementing the Association Agreement has to be relentlessly continued in order to exploit the potentials of the Agreement. The first Association Committee has taken place in Brussels on 7 November 2002. In addition to an exchange of views on political issues of common interest, it provided an opportunity to review the state of implementation of the Association Agreement and to draw conclusions as to the further work to be carried out. Useful discussions have also taken place at the Economic Dialogue meeting on 8 November 2002 in Brussels.

2. A structured framework for political dialogue has been introduced by the Association Agreement. The European Union welcomes that on this basis a regular political dialogue with Jordan on subjects of common interest has been established at all levels. It enables us frankly and openly to address all topics of mutual interest in a spirit of partnership, without any taboos. The European Union attaches great importance to this dialogue. It should serve to create better mutual understanding, increasing convergence of positions and achievement of common objectives particularly towards peace, stability, respect for human rights, democracy and the promotion of regional development.

3. The development and consolidation of democracy and the rule of law and respect for human rights and fundamental freedoms constitute major objectives of the EU's external relations. The EU's action is aimed at promoting stable, democratic environments, founded on the full enjoyment of human rights. Our bilateral relations are also based on shared respect of democratic principles and fundamental human rights as set out in the universal declaration on human rights, which constitute an essential element of the EU-Jordan Association Agreement. The EU supports the efforts of the Jordanian authorities to promote political, social and economic reforms and gives full support to the maintenance of the country's stability. The protection of human rights and the extension of public freedoms should be one of the fundamental aims behind these efforts, and particularly the freedoms of expression, assembly and association and the effective implementation of commitments under international conventions.

The Commission presented to the Council and the European Parliament a communication on "Reinvigorating EU actions on Human Rights and democratisation with Mediterranean partners" which makes a certain number of concrete recommendations. The communication has also been presented to the partners at the Mid-term Ministerial Conference in Crete in May 2003 and is currently examined by the Council bodies.

The EU welcomes Jordan's openness to discuss human rights and democratisation and looks forward to continuing and deepening discussion and mutual understanding on these issues within a more structured framework.

The EU has closely followed the parliamentary elections on 17 June 2003. Free and fair elections at regular intervals are a key feature of democracy. The EU is encouraged by the broad participation of political parties in the elections. These elections and the constitution of a democratically backed Government mark an important moment in the democratic evolution of Jordan and send a message of hope to the entire region. The EU encourages the promotion of the role of women in all spheres of society as an important factor for the political, economic and social development process of a country. It attaches great importance to the efforts undertaken by the Jordanian authorities to increase participation and representation of women in politics. The quota of seats reserved for women in Parliament is an important step in the right direction.

The EU stresses the importance of working towards offsetting the human development deficits identified in the UNDP Arab Human Development Report that has been fully endorsed by Jordan. The report provides a good analysis of problems in the field of human development affecting the economic and social development of the Jordanian population. The EU welcomes the set-up of the National Centre for Human Rights following the constitution of its Board of Trustees and the designation of its chairperson in February of this year. It trusts that the Centre will be able to work in full independence and develop an effective partnership with both the authorities and with civil society in defence of human rights. It is important that Jordan's legislation creates the conditions which allow civil society to work without restrictions. Progress in all these fields is the biggest contribution towards bolstering the country's prosperity and regional stability.

4. The terrorist attacks in Riyadh on 12 May 2003 and in Casablanca on 17 May 2003 have once again underpinned that the threat posed by terrorism is far from over and that no country can consider itself free or safe from this threat. Jordan has also suffered from terrorist acts perpetrated on its soil and abroad. The EU has reiterated its unequivocal condemnation of all forms and acts of terrorism and its firm commitment to the fight against terrorism.

Terrorism constitutes a threat to democracy, peace and stability. Terrorist violence is unjustifiable in any place or under any circumstances, no pretext, be it political, ethnic or religious, can be invoked to condone it.

The EU is strongly convinced that the fight against terrorism and the fight to tackle conditions in which terrorism develops have to be continued and stepped up. At the same time, it must be conducted in full respect of international law, human rights, fundamental freedoms and the rule of law. The fight against terrorism is for the long haul and the challenges stemming from terrorism are global in nature and the response will also have to be global. This requires a comprehensive approach, including political, economic, diplomatic and judicial means. The EU has adopted a co-ordinated and inter-disciplinary approach embracing all the Union's policies. It works, on the basis of the EU Plan of Action adopted in the aftermath of the September 11 attacks, on the implementation of a whole set of measures in order to effectively prevent and combat terrorism. In parallel to efforts on internal measures, the EU is incorporating the fight against terrorism into all aspects of its external policy, in particular by strengthening the contribution of the CFSP in this area. The EU acts within the UN in support of the global coalition against terrorism and pushes for the ratification of relevant international instruments. The fight against the financing of terrorism continues to be a top priority for the European Union.

5. The European Union recalls the public statement by the Quartet Principals after their meeting held on 26 September 2003 in New York. In particular, the European Union stresses the joint reaffirmation of the key role of the Quartet and the decision to meet on a regular basis (and by the end of the year at Principals' level) to promote and assess the implementation of the road map by both parties.

The European Union urges both parties to immediately and simultaneously address the core concerns of the other. The European Union calls on Palestinians and Israelis to fulfil their obligations and responsibilities. The European Union stresses the need to re-establish a cease fire.

The European Union is deeply concerned about the stalemate of the Peace Process and the resurgence of violence between Israelis and Palestinians. Recalling Presidency statements of August 20 and September 11, 2003, the EU renews its strongest condemnation of terrorist attacks against Israelis. Such actions are morally indefensible and do not serve the interests of the Palestinian people. The EU reaffirms its firm commitment to the fight against terror and recalls its decision to include Hamas in its list of terrorist organisations.

While recognising Israel's legitimate right to self-defence in the face of terrorist attacks against its citizens, the European Union urges the Government of Israel to exert maximum effort to avoid civilian casualties, to put a halt to the practice of extra-judicial killings which are contrary to International Law, to reverse the settlement policy and activity, to dismantle settlements built after March 2001 and to freeze the construction of the separation fence, which results in confiscation of Palestinian land, restricts movement of people and goods and hinders a just political solution to the conflict. The EU urges the Israeli Government to refrain from executing its decision in principle to remove the elected President of the Palestinian Authority, which would be counter productive to the efforts at reaching a peaceful solution to the conflict.

The European Union welcomes the designation of Mr Ahmed Qorei as new Prime Minister and stands ready to assist his new cabinet. The European Union emphasises the need for the Palestinian Authority to take immediate, decisive steps to consolidate all Palestinian security services under the clear control of duly empowered Prime Minister and Interior Minister and to confront individuals and groups conducting and planning violent attacks. The EU also recalls that it will remain in contact with all Palestinian Authority interlocutors.

The EU calls upon the Palestinian Authority to continue their reform programme and, as the largest donor to the Palestinian territories, supports the Quartet's call on the International and Regional Community to assist the Palestinian Authority in the implementation of reforms, institution-building and socio-economic development. The EU underlines the importance of humanitarian relief to the Palestinian people as well as of longer-term measures to revive the Palestinian economy.

The European Union reaffirms once again that there is no alternative to a swift and full implementation, in good faith by the two sides, of the road map. The Quartet meeting on
September 26 in New York gave a clear sign of commitment of the International Community to the road map and to the common goal of two states living side by side in peace and security. The EU will continue to work closely and consistently with the US and with other Quartet partners on all issues linked to the successful implementation of the roadmap by the parties, also with a view to establishing an efficient third party monitoring mechanism to which the EU is ready to contribute in a substantial way.

The EU recalls that a comprehensive peace in the Middle East will also have to include Syria and Lebanon.

The EU will continue its efforts to achieve a comprehensive and just peace in the region in close collaboration with Jordan. It greatly appreciates Jordan's constructive and stabilizing role and the personal commitment of King Abdullah in the quest for such peace.

6. The European Union strongly condemned the terrorist attacks which caused the deaths of many innocent victims and represented unsuccessful attempts to threaten the efforts of the International Community in ensuring peace security and stability in Iraq. In condemning the bomb attack against the Jordanian Embassy in Baghdad, the European Union offers her condolences to the victims of this terrorist act.

The European Union wishes to pay tribute to the courage and the vision of Sergio Vieira de Mello and his team and expressed its confidence that the work he had bravely started, for the sake of the Iraqi people and their future, will be carried on. Active co-operation between the UN and the Iraqi Governing Council must continue. The European Union underlines the importance of full respect for the safety and security of humanitarian personnel as well as United Nations and its associated personnel, as called for in Security Council Resolution 1502.

The European Union recalls that the UN should play a vital role in Iraq and expresses its support to the UN Secretary General's efforts in this regard. It welcomed the appointment of Ramiro da Silva as acting UNSG Special Representative and expressed its readiness to fully support his actions.

The European Union underlines the importance of the restoration of Iraqi sovereignty and the establishment of a fully representative Iraqi Government through democratic elections. The European Union acknowledged the necessity to reach agreement on a realistic schedule for handing over political responsibility to the Iraqi people.

The European Union recalls its commitment to help achieve the goal of creating a stable and prosperous Iraq with a representative government and thriving civil society. It noted with satisfaction some positive developments taking place on the political side of reconstruction such as the appointment by the Iraqi Governing Council of an interim cabinet of ministers, the formation of a Preparatory Constitutional Committee to consult on an Iraqi constitution and to pave the way for democratic elections as soon as feasible. The European Union also welcomes the recent Arab League invitation to the Governing Council to fill Iraq's seat until succeeded by an elected representative. The European Union considers these developments as significant steps towards the full restoration of Iraqi sovereignty.

The European Union attaches particular importance to fostering a national Iraqi dialogue in order to overcome political divisions inside the country and forge unity for building a new

Iraq. It will employ its efforts to attain this common goal of the international community.

Considering that security remains a major priority in Iraq and being aware that stabilization cannot be separated from political reconstruction and economic recovery, the European Union stresses the importance of the discussions currently under way at the UNSC on a new resolution on Iraq.

The European Union is ready to play an important role in the multilateral effort aimed at the reconstruction of Iraq. It took note with appreciation of the active role being played by the Commission in preparing the Donors Conference on Iraqi reconstruction scheduled to take place in Madrid. The Madrid Conference is the opportunity for a united international effort to redress Saddam's legacy and to help the Governing Council and Ministers restore services, security and build Iraqi faith in a process towards elections. The European Union reiterates the need for an adequate multilateral umbrella for reconstruction, to be achieved through the creation of a transparent and operational framework that is independent of, though coordinated with the Coalition Provisional Authority.

We call on Jordan and all the countries in the area to support stability in Iraq and in the region and we reiterate our willingness to contribute through deepening dialogue and co-operation in all fields.

7. The Euro-Mediterranean Partnership has shown its resilience and has allowed its participants to engage into an open dialogue on all the issues of common interest. The Euro-Mediterranean Foreign Ministers' Conference held in Valencia on 22 and 23 April 2002 renewed a mutual commitment which has given greater depth to the Euro-Mediterranean Partnership. The Conference adopted an Action Plan to give political impetus to the Process and to make it advance substantially, by increasing the sense of joint belonging to the partnership. At the Euro-Mediterranean Mid-term Ministerial Conference which was held in Crete on 26 and 27 May 2003 Foreign Ministers took stock of progress and gave fresh impetus to the Partnership's work in the run-up to Barcelona VI, to be held in Naples in December 2003. At that occasion, Foreign Ministers also expressed readiness to use fully the potential of the Barcelona Process to make a positive contribution to the stabilisation of the Mediterranean region. They felt that a reinvigorated co-operation within the region and with the Mediterranean partners should be sought at the present juncture. Of particular significance is also the agreement reached at the Crete meeting on Guiding principles for the dialogue of cultures and civilisations and on the objectives, activities and modalities of establishment of the Euro-Mediterranean Foundation for the Dialogue between cultures and civilisations, foreseen at Valencia. At this occasion Foreign Ministers also recalled that a decision should be taken later this year to determine the future course of action on the FEMIP. Jordan has always been a very active partner within the Barcelona Process and its contributions continue to be highly valued by the EU.

8. Major changes are taking place with the forthcoming enlargementof the European Union and the accession of ten new Member States on 1 May 2004. Following the signature of the Accession Treaty on 16 April 2003, the European Union has provided the future Member States with an observer status, giving them the right to fully participate in the work of the EU institutions and to prepare themselves thus to their future membership. The enlargement of the European Union offers new opportunities and creates challenges including for the Mediterranean partner countries.

9. In this respect, the Wider Europe initiative is of particular relevance. Foreign Ministers had already the opportunity, at the Mid-term Conference in Crete, on 26-27 May, to discuss the application of the policy guidelines proposed in the Commission Communication on Wider Europe to the Mediterranean partners. They acknowledged that the new policies do provide a means to reinforce the Euro-Mediterranean Partnership and to develop co-operation based on the mutual recognition of common interests. On the basis of the differentiated approach that is at the centre of the Wider Europe communication the EU will invite Jordan to work jointly on the development of an action plan for the implementation of the new initiative.

The EU Council laid down the EU approach towards this new initiative, the general principles and the overall goals as well as the next steps for its implementation.

The EU welcomes the constructive attitude shown by Jordan towards the new policy in all its dimensions.

10. Good progress has been made within the association process which lies at the core of the Euro-Mediterranean Partnership. Association Agreements are now in force with Tunisia, Morocco, Israel and Jordan and on an interim basis with the Palestinian Authority. An Association Agreement has been signed with Lebanon on 17 June 2002 and the interim agreement has come into force on 1 March 2003. The ratification processes of the agreements concluded with Egypt, Algeria and Lebanon are on their way. Negotiations with Syria continue in view of their conclusion in a not too distant future.

11. The EU attaches great importance to regional dialogue and sub-regional co-operation as important factors for implementing the objectives of the Euro-Mediterranean Partnership. It supports and encourages any practical measures towards developing co-operation and South-South integration. In this respect, the EU welcomes the conclusion and initialling in Amman in January 2003 of the Agadir Agreement, which provides for free trade between Jordan, Morocco, Tunisia and Egypt by 2006, as an important step towards the creation of a Euro-Mediterranean free trade area and encourages the partners to make every effort towards an early signature of the Agreement. The entry into force of this Agreement will strengthen the South-South dimension of the Euro-Mediterranean Partnership. The EU plans to provide support to this initiative under the Regional Support Programme and with the help of the proposed regional co-operation sub-committee. It hopes that other partners who have signed an association agreement with the EU will be able to join the Agadir process.

12. On the economic front, the EU welcomes the fact that the Jordanian authorities continue to attach a high priority to maintaining an appropriate macro-economic framework. Sound macro-policies and structural reforms, in the trade, financial and public sectors as well as the privatisation process and private sector development, have led to a period of macro-economic stability and improved economic performance, despite the economic impact of the war on Iraq and the general instability of the region.

13. Despite an appreciating real exchange rate, in the context of a peg to the US dollar, export performance has been strong over the last few years and this has contributed to higher real GDP growth (broadly 5% in 2002). Although it is too early to judge the final impact of the war in Iraq on Jordanian economic growth, it is expected to have a moderating effect, although recent reforms have made the Jordan economy more resilient. Inflation remains low at around 1.8% in 2002 and the level of reserves remains comfortable. However, unemployment remains high at 16.5% and especially affects young people. With the labour force growing at 4-5%, higher GDP growth is needed to reduce the unemployment rate. The higher growth rates achieved in the past few years have brought neither a decrease of unemployment nor an increase in the rate of participation in the labour force. We also encourage Jordan to pursue efforts with regard to combating poverty.

14. In this respect the Social and Economic Transformation Plan (SETP) is important, given its emphasis on private investment, economic growth and employment creation while also including a poverty alleviation component. However, the SETP implies significantly higher expenditures, which could lead to a deterioration in the fiscal position. The implementation of the plan has, however, been delayed. Therefore, we encourage the Government of Jordan to take actions under the SETP as a function of the availability of additional non-debt creating grant and privatisation sources of revenue. While we welcome the efforts that have been made to reduce fiscal deficits and the debt to GDP ratio, continued discipline in this area is important. We also encourage Jordan to pursue the structural reforms undertaken on both the revenue side (tax reform) and expenditure side (pension and public sector reform) that are essential to ensure sustainability over the medium-term.

15. A stable macro-economic environment and accelerated trade liberalisation are both catalysts for encouraging investment and economic growth. The implementation of the Association Agreement has become the central framework of the EU-Jordan relations, facilitating Jordan's strategy of boosting competitiveness and growth. Trade liberalisation will continue to act as a catalyst for economic and social change. The process is accompanied by the Programme to Support the Implementation of the Association Agreement. Within the context of the economic chapter of the Association Agreement, the next Economic Dialogue between the EC and Jordan is scheduled for December this year. Lessons learnt from the implementation of the agreement and potential and actual impacts on Jordan will also be discussed and presentations will be given on economic developments and challenges for the EU and Jordanian economies. It will also continue work initiated last year aiming at promoting trade and investment. With this aim and parallel to the economic dialogue a business to business dialogue will be held to explore concrete proposals to improve the business environment conducive to promote trade and investment between Jordan and the EU. In the context of economic development, the EU stresses the importance of sustainable development as an essential aim of the Euro-Mediterranean Partnership according to the conclusions of the Athens declaration of July 2002.

16. The extraordinary session of the World Economic Forum on 21-23 June in Amman, the second of this kind held outside DAVOS after the one in New York in the aftermath of the 11th of September, aimed at providing a new impetus to the economic development of the region. The choice of Jordan as a hosting country rewards the driving role played by the Hashemite Kingdom in the political and economic reform of the region. The renewed optimism ignited by the forum has now to be translated in concrete forms of economic development. A key for a successful process of economic modernisation is the facilitation of access of the Jordanian population and businesses to the information and communications technology as identified by the UNDP Arab Human Development Report, hence we encourage Jordan to continue its efforts outlined in its Education Reform for Knowledge Economy.

17. The trade relations between Jordan and the EU are expected to develop further with the implementation of the Association Agreement. Around a third of Jordan's imports originate in the EU and consist mainly of machinery and transport equipment, chemical products and prepared foodstuff. Jordan's overall trade balance with the world shows a structural deficit with imports almost twice as high as exports. This imbalance has been sharpened over the last few years. However, in 2001 and in 2002, Jordan's exports grew considerably. This structural trade deficit is partially covered by a surplus in services, mainly remittances and tourism receipts. It is a core interest of EU and Jordan to sustain efforts required improving Jordan's export competitiveness and their trade balance in the long run.

18. As far as agriculture is concerned, the EU welcomes the entry into force and the implementation of the reciprocal concessions on agricultural products, provided for by the Association Agreement. The considerable increase of EC agricultural imports from Jordan, experienced last year, shows that the concessions granted to Jordan on agricultural products have given new impetus to our trade relations. EC exports to Jordan seem not to have experienced the same positive trend in 2002, but the EU hopes that this trend will be reversed in the future. The EU believes that, given the importance of our bilateral trade in agriculture, which accounts for almost 9% of total bilateral trade, it is important to continue our dialogue in order to deepen our relations in this sector. The EU is firmly committed to this objective and will co-operate with Jordan in order to progressively establish a greater liberalisation of reciprocal trade in agricultural products, as foreseen in the Association Agreement and in the spirit of the Barcelona Process. In this context, the European Commission has been given a mandate to negotiate with Jordan the revision of the agricultural protocols of the Association Agreement, in accordance with the relevant provision in the Agreement. The EU and Jordan wish to start formal negotiations for further agricultural liberalisation as soon as possible.

19. During the past several years, Jordan has profoundly modernised its legislative and regulatory framework with a view to realising impressive trade liberalization measures, which led to its accession to WTO in 2000. This consistent policy has been further articulated through the conclusion of trade agreements with its most important partners. Further multilateral trade liberalisation should actively be pursued within the framework of the Doha Round.

20. The creation of a free trade area is a key objective of the Association Agreement and shall not be limited to the free trade of goods. The EU congratulates Jordan for its commitment to progressively open its services markets. The EU appreciates that Jordan has taken substantial commitments during the process of accession and welcomes Jordan's current involvement in the GATS negotiations. In this regard the Trade Ministerial meeting in Palermo announced that steps will be taken to establish a common framework protocol on liberalisation of trade in services.

21. The challenge ahead for EU and Jordan is to ensure a successful implementation of the Agreement including on services and to make it a solid basis for the development of closer ties and mutual benefits in the framework of the Euro-Mediterranean partnership.

22. Regarding the initial steps to perform following the entry into force of the Agreement the EU welcomes the use by Jordan of the harmonised system of nomenclature.

23. The EU underlines the important role of customs in facilitating legitimate trade. Customs legislation and procedures, based upon modern techniques, such as risk assessment and the use of simplified procedures are of benefit to legitimate economic operators, as well as to customs administrations and overall stimulate trade. In order to encourage trade and to promote economic co-operation throughout the Mediterranean region, the EU recalls the importance of the Trade and Investment Facilitation Action Plan adopted by the Trade Ministers in Toledo (March 2002).

On the basis of work carried out by the Euromed Working Group on Trade Facilitation, the Trade Ministerial meeting in Palermo adopted a set of measures in the field of the simplification of customs procedures and called for its swift implementation by the Mediterranean countries. These measures will support regional integration. In line with the Toledo Action Plan, the Palermo meeting instructed the Working Group on Trade Measures relevant to Regional Integration to address the approximation of legislation in the field of standards, technical regulations and conformity assessment procedures. In that regard and at bilateral level the implementation of the trade provisions of the Association Agreement is supported by financial and technical assistance provided by the programme of support to the implementation of the Association Agreement. The proposed customs co-operation subcommittee will also be an important body to discuss the technical details of trade facilitation at bilateral level.

24. At the ministerial meeting of Trade in Toledo the Ministers gave their agreement in principle to the participation of the Mediterranean partners in the Pan-Euro-Mediterranean cumulation of origin system. At the Trade Ministerial meeting in Palermo the new Protocol on rules of origin extending the Pan-European system of cumulation to the Mediterranean countries was endorsed. Steps should now be taken to insert the new protocol in the Association Agreement and in the agreements to be concluded. The harmonisation of rules of origin in the Euro-Mediterranean area represents a major step forward. It will significantly facilitate trade in the Euromed region and contribute to the creation of a Free Trade Area.

25. Jordan will, by means of the network of free trade agreements that it has concluded and will conclude in the future with Mediterranean or other partners, substantially benefit from the extension of the Pan-European cumulation system.

26. The Commission is carrying out with the Jordanian authorities a technical examination of certain trade measures, including an exchange of views on the Qualified Industrial Zones.

27. To accompany trade commitments, the Agreement necessitates a comprehensive upgrading of the legislative and regulatory framework as well as the creation and strengthening of institutions involved in the implementation of the Agreement. The EU acknowledges the impressive progress that Jordan has already undertaken in this respect. Our common interest is to accelerate and sustain this process.

28. Concerning competition, the Commission welcomes the adoption of the temporary Competition Law that will be presented to the new Parliament for ratification. We also support the work undertaken by the Government and in particular the Ministry of Justice to set up the necessary instances to enforce the legislation and review competition cases. The EU would also support the development of regulatory Commissions for utilities in view of the privatisation process in Jordan. Those are all positive steps in the implementation guidelines of co-operation between the Parties included in article 53 of the Agreement. The objective of such a dialogue is to avoid that competition restrictions impede or eliminate the beneficial effects that should result from the progressive liberalisation of trade. The Commission is providing technical assistance to Jordan to support the building of the competition institutions in the framework of the MEDA programme EJADA. The EU is pleased to share with Jordan with the occasion of this Association Council the project paper on the implementing rules that has also profited from Jordan's active collaboration.

29. Concerning the transport, energy and telecommunications sector the EU underlines the importance of the development of the Euro-mediterranean transport, energy and telecommunications networks and of the complete integration of the Jordanian system in these networks. The EU welcomes the reforms undertaken by Jordan in liberalising and modernising these sectors. The EU encourages Jordan to play a driving role in the development of sub-regional co-operation in these fields.

30. The EU acknowledges that there is a high degree of liberalisation of financial and capital markets and wants to encourage Jordan to increase banking credit and financial instruments for productive investment. The EU attaches great importance to international efforts to eliminate financial system abuses. In the area of money laundering and fight against financing of terrorism, future discussions should focus on ensuring adequate safeguards to prevent abuse of the financial system and on the development of suitable standards, dealing with key issues such as the role of the professions in combating abuses. In the area of tax fraud, the EU invites Jordan to subscribe to and encourage the development of international standards aimed at eliminating harmful tax practices and to recognise the importance of effective exchange of information and transparency in the tax area.

31. The EU appreciates the progress made in the Justice and Home Affairs (JHA) area, both at regional and bilateral level. The adoption by the Euro-Mediterranean Foreign Ministers in Valencia last year of the regional framework programme "in the field of justice, in combating drugs, organised crime and terrorism as well as co-operation in the treatment of issues relating to the social integration of migrants, migrations and movements of people" gave the EU the opportunity to start implementing concrete initiatives, in full co-operation with Jordan and the other Mediterranean countries, in important fields like training of judges, police training and police co-operation and migration.

32. Indeed, the EU stresses the significant advances in the implementation of the Association Agreement made by this Association Council though its decision of establishing the Working Party for social affairs and migration foreseen by article 84 of the agreement as well as the new "Justice and security sub-committee".

33. On fight against drugs, the Association Agreement states the development of a balanced and integrated approach in their policies and that the sharing of experience in setting up strategies and methods to reduce both demand and supply of drugs, as well as trafficking in drugs and precursors.

34. The "Justice and Security" sub-committee will be responsible for the implementation of the co-operation in some areas as drugs and money laundering, which were already foreseen by the association agreement, while the provision of other like justice, judicial co-operation, and fight against organised crime, including trafficking on human beings, terrorism and corruption represent further progress in JHA.

35. With regard to migration the EU wants to create a space of prosperity and peace with the Southern Mediterranean Partners including Jordan. Therefore, the approach to migration needs to be a comprehensive one, in which foreign affairs, development policy, economic and financial co-operation in the area of justice and home affairs need to be incorporated in a balanced manner. There is an increasing need to manage the legal migratory flows towards the EU and the phenomenon of illegal migration calls for concrete measures, particularly by fighting trafficking in human beings and migrant smuggling through the implementation of the relevant international conventions. The fight against illegal migration including transit immigration and illegal immigration by sea is a matter of particular concern, which will be addressed as a matter of priority in Jordan-EU co-operation. The EU also wants to work with Jordan on elimination of possible obstacles to the readmission of illegal migrants. Specific attention will also need to be given to the refugees and others in need of international protection. Both sides look forward to the establishment of a regular dialogue on migration and social issues, for which the Association Agreement establishes the framework by creating the proposed working group on social affairs. The EU also underlines its commitment in developing this dialogue in the spirit of partnership and in working jointly with Jordan to identify concrete measures and projects that will strengthen their co-operation along the lines of the Wider Europe Communication.

36. The successful implementation of our partnership entails intense co-operation between

Jordanian and EU institutions to take the Association process forward. In that regard the

European Commission will ensure a more detailed follow-up of this Association Council meeting through an Association Committee meeting which it will call during the first semester of 2004 and through the first meeting of the working party on social affairs.

37. Furthermore, to give a new impetus to the functioning of the Association Agreement, the Association Council established the working party for social affairs and 8 sub-committees that will carry out the technical detailed work of the implementation of the Agreement. The subcommittees will be activated subject to actual requirements expressed or existing in relation to the implementation of the EU-Jordan Association Agreement.

38. In the framework of financial co-operation the European Commission will continue to support Jordan's reform agenda, on the basis of the priorities identified in the Country Strategy Paper and the National Indicative Programme elaborated in close consultation with the Government of Jordan.

39. Under the MEDA implementation programme Jordan has received so far, due to its advanced position in the implementation of the Association Agreement, to its absorption capacity and commitment to the Barcelona process (trade liberalisation and related economic reforms) a total of €423 Million. As far as payment appropriations are concerned, Jordan has so far received a total of €261.5 Million. Jordan is the best performer in the Euro-Mediterranean Partnership in terms of the use of MEDA resources; with nearly 62% of the grants committed already paid.

40. The National Indicative Programme 2002-2004 for Jordan foresees programmes amounting to €142 Million during this period. In 2003, the Commission submitted a package of projects for a total of €47 million which was approved in July by the EU Member States. A very large part of the funds (€35 Million) covers an emergency budgetary assistance intended to help mitigate the impact of the Iraq war. The other actions will focus on industrial modernization and the water sector.

41. Since 1978 the European Investment Bank (EIB) has committed more than EUR 580 million for the purpose of financing capital expenditure projects in Jordan essential for the country's economic development.

The EIB's operations, which have expanded rapidly in recent years, are now receiving further impetus from the Facility for Euro-Mediterranean Investment and Partnership (FEMIP). The Facility's objective is to assist the Mediterranean Partner Countries in meeting the challenge of achieving economic and social modernisation and better regional integration in the run-up to the creation of a free trade area between Europe and the Mediterranean area in 2010.

While continuing with the financing of infrastructure vital to economic development, FEMIP's operational priorities are: (a) enhanced MPC involvement in FEMIP's policymaking through establishment of the Policy Dialogue and Coordination Committee and the opening of EIB Offices in the region; (b) placing emphasis on private sector development as a generator of wealth and jobs, "South-South" regional cooperation projects, human capital investment and the concessioning of certain public sector infrastructure; (c) scaling up technical assistance for the generation of quality projects and for the reform and privatization process in MPC economies; (d) the provision of innovative financial products and risk capital; (e) progressive expansion (from EUR 1.4 billion to EUR 2 billion) in the annual volume of the EIB's operations in support of the Mediterranean countries. Other priorities are reducing the impact of human activity on the environment and bringing environmental standards into compliance with the international agreements and treaties (Kyoto, etc).

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• The Commission approves cooperation actions for Morocco, Egypt, Lebanon, Jordan and Algeria (5/9/2003)
• Quartet Statement (Jordan) (23/6/2003)
• Commissioner Lamy's Speech on Middle East Trade (Jordan) (23/6/2003)