U.S. expands QIZ concept in Egypt

U.S. expands QIZ concept in Egypt    The Bush administration has designated a new Qualifying Industrial Zone in Egypt and approved the expansion of two zones in the country.
   The new zone is named the Central Delta QIZ. The Greater Cairo QIZ and Suez Canal Zone QIZ are designated for expansion.
   This action builds on the December 2004 announcement of the first three QIZs in Egypt by the United States, following the historic agreement between Egypt and Israel to cooperate in the formation of these zones. QIZs allow for duty-free export to the United States of certain Egyptian goods that contain Israeli inputs.
   In 1996 Congress authorized the designation of QIZs between Israel and Egypt, and Israel and Jordan. The purpose of this trade initiative is to support prosperity and stability in the Middle East by encouraging regional economic integration.
   In order for a QIZ article to gain duty-free entry, QIZ factories must add at least 35 percent to the value of the article. This 35 percent minimum content figure can include value added in Israel, Egypt or the United States.
   Since 1999, the United States has designated 13 QIZs in Jordan. The United States and Jordan negotiated a full free trade agreement that Congress approved in 2001. Exports from Jordan to the United States have increased from $31 million in 1999 to $1.1. billion in 2004.
   Jordan estimates that more than 35,000 jobs have been created within the QIZs. Investment in Jordan’s QIZs is close to $100 million and is expected to increase to upwards of $200 million. “Similar benefits are expected to flow from the QIZs in Egypt,” said the Office of the U.S. Trade Representative in a statement.
   For more detail about the QIZ program, read the February American Shipper, pages 50-51.