1996, Congress authorized the President to allow Egypt and
export products to the United
duty-free, as long as these products contain inputs from
Israel. This trade initiative supports the
peace process by encouraging regional economic integration. This week,
reached an agreement to establish the Egyptian and Israeli trade partnership
necessary to take advantage of this 1996 legislation.
establish Qualified Industrial Zones or “QIZs” and export products manufactured
in these QIZs to the United
duty-free. In order for a QIZ
article to gain duty-free entry, QIZ factories must add at least 35% to the
value of the article. This 35%
minimum content figure can include costs incurred in
States. By agreement between
each contribute at least one-third (11.7%) of the 35% minimum content
must encompass portions of Egypt and
though the areas do not have to be contiguous. The
approved the request of Egypt and
designate three QIZs -- the Greater Cairo QIZ; the Alexandria QIZ; and the
QIZ that includes an industrial area of Port
President has given the United States Trade Representative (USTR) the authority
to approve QIZs, and USTR has announced its approval of the Egypt-Israel QIZ
plan. Until now, QIZs have been
established only in Jordan.
1999, thirteen QIZs have been designated in
Jordan. During that period exports from
from $31 million in 1999 to $674 million in 2003.
strongest job creator.
estimates that more than 35,000 jobs have been created in the QIZs. Investment in
QIZs is currently at between $85-100 million and is expected to grow to $180 to
$200 million. Similar benefits are
expected to flow from the QIZs in Egypt.