Archive for Qualifying Industrial Zones

Egypt wants lower Israeli part requirement in trade agreement

by admin
November 2nd, 2012

The Egyptian government has submitted a request to Israel to reduce the required percentage of Israeli-made parts in products included in the Qualifying Industrial Zones agreement from 10.5 to 8 percent, Egypt’s industry and trade minister said Thursday.

The QIZ agreement exempts Egyptian exports from customs duties when shipping to the United States, provided that the exports are manufactured with a certain percentage of Israeli parts.

Minister Hatem Saleh said he expects an industrial growth of 5 percent in the coming months, compared to about 4 percent currently.

He added that the growth rate signifies the beginning of a recovery in Egypt’s industrial sector. He noted that exports have recently increased by 16 percent.

Hundreds of Egyptian companies export products to the United States under the QIZ agreement. Export volumes have been running at around US$800 million annually.

Egypt, Israel and the United States signed the QIZ agreement in 2004, which stipulates that the Egyptian exports to the US should contain 11.7 percent Israeli components, a number that was reduced to 10.5 in 2007.

Edited translation from Al-Masry Al-Youm

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Categories Egypt Economy
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US official: QIZ will not be affected by halted gas exports

by admin
May 9th, 2012

Israel welcomes the introduction of new areas into the Qualifying Industrial Zones (QIZ) agreement, said an economic official from the US Embassy in Egypt on Wednesday.

The official, who requested anonymity, said that ever since it was raised by former Trade and Industry Minister Rachid Mohamed Rachid, there has been progress that the US is interested in, but there is no specific timetable for its implementation and no specific governorates have been chosen as of yet.

The official went on to say that the United States believes that “the QIZ and gas deals are two different commercial deals and that one will not be affected by the cancelation of the other.”
 
He said that under the QIZ deal, Egyptian exports recorded some US$1 billion in 2011, despite the sluggish economy in Egypt and the conditions that resulted from the revolution and despite the weak economic growth in the US.

In a press interview, the official said that the important thing now is for Egypt to take advantage of the QIZ deal that covers most economic sectors of the economy. He added that US aid will provide further support for the training and rehabilitation of the workforce and for the development of education in order to benefit exports.

He said the US is waiting for more Egyptian food and manufactured agricultural products from Egypt within the framework of the QIZ agreement.

He noted that American investors are considering the establishment of projects related to foodstuffs in Egypt, and the export of them to the United States and other markets.

He said he believed there was “no reason to fear the rise of Islamic forces with regard to agreements such as this one as it serves Egyptian interests.”

Meanwhile, official reports prepared by the US Embassy’s Economic Department, said the number of factories that exported to the US under the QIZ framework amounted to 168 in 2011 and that Egypt's total QIZ imports reached US$97.5 million, while exports amounted to US$931 million in fabric, US$7.5 million in food, and US$924 million in apparel.

Edited translation from Al-Masry Al-Youm

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Categories Egypt Economy
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Textile exporters stop working with Israeli industrial zone counterparts

by admin
April 29th, 2012

Egyptian public sector textile companies working under the Qualifying Industrial Zones agreement have stopped working with their Israeli part suppliers due to what they call increasing economic difficulties.

The Egyptian exporters said their exports to the US — which under the agreement contain a certain amount of Israeli components — have greatly decreased as the US has reduced customs duties for exporters from Pakistan and China, and indirectly squeezed out the Egyptian firms.

Consequently, garment exports from the Mahalla, Kafr al-Dawar and Amiriya companies to the United States have declined by 80 percent.

“Our exports to the United States this year did not exceed LE3 million, which is only 15 percent of our estimated target,” said Kamel al-Tawash, head of the Amiriya Company, adding that there is a large surplus of Israeli parts in stores due to the US’s decreased demand for Egyptian products.

“We made too many concessions to restore the US market by increasing quantities of components imported from Israel,” he said, calling for an alternative agreement in light of the political tensions between Cairo and Tel Aviv following the cessation of a bilateral natural gas deal.

The Qualifying Industrial Zones agreement between Egypt, Israel and the US was signed in 2004 and took effect early the next year. It stipulates that Egyptian exports to the US are duty-free, provided 11.7 percent of their components were made by Israeli firms.

Last week, Egypt unilaterally terminated the gas deal with Israel, which dates back to 2005 as well. Egypt said commercial reasons were behind the termination, and denied that the decision was politically motivated.

Edited translation from Al-Masry Al-Youm

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Categories Egypt, Egypt Top Stories
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Egyptian delegation flies to Israel to discuss Qualifying Industrial Zones

by admin
April 1st, 2012

An Egyptian trade delegation left for Israel Sunday to discuss solutions to problems facing the two countries' Qualifying Industrial Zones (QIZ) agreement, according to state news agency MENA.

A delegation member said that problems facing cooperation between Egypt, Israel and the US within the framework of the QIZ will be discussed. The delegation will also discuss the development of new projects to create jobs and open markets for Egyptian products.

Israeli radio said political sources denied Egyptian media reports that the Egyptian delegation will also discuss the release of prisoners in both countries.

QIZ are designated geographic areas within Egypt that enjoy a duty free status with the US. Companies located within such zones are granted duty free access to the US markets, provided that 10.5 percent of their components come from Israel.

Translated from MENA

 

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Categories Egypt Economy
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