The Bush administration had designated a new Qualifying Industrial Zone ( QIZ) in Egypt and approved the expansion of two zones in the country.
The new designated zone is the Central Delta QIZ. The Greater Cairo QIZ and Suez Canal Zone QIZ will be expanded.
QIZs allow for duty-free export to the United States of certain Egyptian goods that contain Israeli inputs.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 value added in Israel, Egypt or the United States.
By agreement between Egypt and Israel each must contribute at least one-third (11.7%) of the 35% minimum content requirement. The purpose of this trade initiative has been to support prosperity and stability in the Middle East by encouraging regional economic integration.
Announcing the decision Mr. Robert Portman head of USTR said : “Egypt's and Israel's desire to expand their QIZs underscores the success of this program in fostering closer ties between the people, businesses and governments of these two key Middle East countries,”
Israel's industry & trade Minister Mr. Ehud Ulmert said, following the announcement, that the new Qualifying Industrial Zones would increase Israeli exports to Egypt in the short term.
Ulmert added that the request to set up a new QIZ was a joint initiative of Israel and Egypt . Ulmert also noted that the positive results of the first quarter of the QIZ, showed an export figure of US$70 millions from Egypt to the USA. Israel had contributed US$8 millions of the total. The second quarter showed an even greater increase. Egyptian exports of US$115 millions out of which Israel contributed over US$15 millions. Almost 470 Egyptian companies have registered for the QIZ program, however, only 70 have so far exported to the USA.