USTR Robert Portman supports Middle East trade development efforts
02 Nov '05
3 min read
Background
Qualified Industrial Zones (QIZs)
In 1996, Congress authorized the designation of QIZs between Israel and Egypt, and Israel and Jordan.
The QIZs allow Egypt and Jordan to export products to the United States duty-free if the products contain inputs from Israel.
The purpose of this trade initiative has been 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. QIZs must encompass portions of Egypt and Israel, though the areas do not have to be contiguous.
Since 1999, the United States has designated thirteen QIZs in Jordan.
The United States and Jordan negotiated a full FTA that Congress approved in 2001.
Exports from Jordan to the United States grew from $31 million in 1999 to $1.1 billion in 2004.
Jordan's QIZs are the country's strongest engine of job growth. Jordan estimates that more than 35,000 jobs have been created within its QIZs.
Investment in Jordan's 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.
The establishment and expansion of QIZs in Egypt builds on other steps recently taken by the United States to promote economic freedom in the region.
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