Article 2 of the FTA states that “each Party shall progressively eliminate its customs duties on originated goods of the other Party.” Annex 2.2 of the FTA, entitled “Rules of Origin,” specifically defines originating goods as having three components: a qualitative definition of origin (“the “wholly obtained”/”substantial transformation” tests), a quantitative definition of origin (the 35% domestic content requirement) and a direct transport requirement:

1. Wholly Obtained/Substantial Transformation Requirement: In order to qualify for duty-free treatment under the FTA, the goods imported into Jordan must be made entirely in the United States or, if any third-country materials are used, those materials must be “substantially transformed” into United States origin products as a result of a United States manufacturing or processing operation. A substantial transformation requires a change, as a result of manufacturing or other processing, in certain essential qualities of a good. Chapter 3 and Chapter 4 of the Rules of Origin Manual discuss this requirement in further detail. The FTA has a special set of “substantial transformation” rules for textile and apparel products. See Chapter 5 for further detail.

2. 35% Domestic Content Requirement: The FTA requires that 35% of the customs value of the imported product must be attributed to United States origin materials and/or to United States direct costs of processing. However, the cost or value of Jordanian-origin materials incorporated in the imported product can be counted, but only up to 15% of the customs value of the good. Domestic-content requirements are discussed in detail in Chapter 6, Chapter 7 and Chapter 8 of the Rules Of Origin Manual.

3. Direct Transport Requirement: To ensure that United States qualifying goods are not mixed with non-qualifying goods while en route to Jordan, the FTA contains a “direct transport” requirement. This will require proof that the goods are shipped directly from the United States to Jordan, with certain exceptions. The direct transport requirement and permitted exceptions are discussed in Chapter 9 of the Rules of Origin.

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