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U.S. allows duty-free Egyptian imports with Israeli inputs

U.S. allows duty-free Egyptian imports with Israeli inputs

The Bush administration will sign an agreement early this week with Egypt and Israel to promote closer economic cooperation in the Middle East.

   The agreement will also allow Egyptian imports manufactured with some Israeli-produced components to enter the United States duty free.

   “This is the most important economic agreement between Egypt and Israel in two decades,” said U.S. trade representative Robert Zoellick, who was scheduled to travel to Cairo today and tomorrow. “These industrial zones will create a daily opportunity to build business and personal relationships among Egyptians, Israelis and Americans.”

   In 1996, Congress authorized the designation of “qualifying industrial zones” (QIZs) between Israel, Egypt, Israel and Jordan. In order for a product to gain duty-free entry into the United States, factories in the industrial zones must add at least 35 percent of Israeli components to value of their products.

   The United States has approved a request by Egypt and Israel to designate three zones in Cairo, Alexandria and the Suez Canal Zone, which includes an industrial area of Port Said.

   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 increased from $31 million in 1999 to $674 million in 2003.

   Jordan estimated that more than 35,000 jobs have been created within its QIZs. Investment in Jordan’s QIZs has reached nearly $100 million and is expected to increase to as much as $200 million. “Similar benefits are expected to flow from the QIZs in Egypt,” the Bush administration said in a Dec. 10 statement.