The QIZ AgreementsThe QIZ Agreements

Gabby Bar

Foreign Trade Administration

Ministry of Industry, Trade and Labor

Gabby Bar

Foreign Trade Administration

Ministry of Industry, Trade and Labor

“Economic Transformation and Social

Change in the Middle East”

Academy of the Konrad-Adenauer-Stiftung

05.12.2007

“Economic Transformation and Social

Change in the Middle East”

Academy of the Konrad-Adenauer-Stiftung

05.12.2007

Israel-U.S. FTA – Rules of OriginIsrael-U.S. FTA – Rules of Origin

Local Direct Inputs35%

Other Inputs- Direct & Indirect, Local & Foreign,

Profit65%

The Final Product

The Final Product Must Undergo a Substantial Transformation

What is QIZ?What is QIZ?

• A QIZ is an area in Jordan/Egypt and Israel, that was designated by the United States, from which goods can be exported duty free and quota free to the United States.

• In order to enter the US duty free and quota free, these goods must meet the QIZ Agreement criteria and must be approved by the QIZ Committee.

Protocols Between the Government of the Protocols Between the Government of the

State of Israel and the Government of the State of Israel and the Government of the

Hashemite Kingdom of Jordan/ The Hashemite Kingdom of Jordan/ The

Arab Republic of Egypt - on Qualifying Arab Republic of Egypt - on Qualifying

Industrial ZonesIndustrial Zones• The Agreement with Jordan was Signed on October The Agreement with Jordan was Signed on October

1997, In Doha, and is Effective since 19981997, In Doha, and is Effective since 1998• The Agreement with Egypt was signed on December The Agreement with Egypt was signed on December

2004, in Egypt, and is effective since February 20052004, in Egypt, and is effective since February 2005

The AgreementsThe Agreements

Application of the U.S – Israel Free Trade Application of the U.S – Israel Free Trade

Agreement on Finished Products thatAgreement on Finished Products that : :

• Are manufactured in specific industrial zones in Are manufactured in specific industrial zones in

Jordan/EgyptJordan/Egypt

• Include components produced in Israel – At least 8%/11.7%Include components produced in Israel – At least 8%/11.7%

• Are destined for export to the U.SAre destined for export to the U.S

Core of the AgreementsCore of the Agreements

Economic Goals of QIZ AgreementsEconomic Goals of QIZ Agreements

• For Israel: To “open” new markets for Israeli export

• For Jordan/Egypt: To improve competitiveness of Their exports to the U.S

• For the U.S: To diversify the sources of imports into the U.S

• Joint objective: to enhance business and industrial cooperation and to increase bilateral trade between Jordan and Israel and Egypt and Israel

Israeli-Jordanian Trade 2000-2006*Israeli-Jordanian Trade 2000-2006*

* Israeli Bureau of Statistics

38

137

60

116

51

132

44

86

22

69

20

66

2139

0

20

40

60

80

100

120

140

Millions of U.S. Dollars

2006200520042003200220012000

Export Import

Jordanian Export to the U.S. – 1998-2006*Jordanian Export to the U.S. – 1998-2006*

* U.S. Census Bureau

1421.61266.8

1093.4

673.5412.4

229.273.3

30.716.4

02004006008001000120014001600

Millions of U.S. Dollars

20062004200220001998

Israeli-Egyptian Trade 2000-2006*Israeli-Egyptian Trade 2000-2006*

* Israeli Bureau of Statistics

77

126

60

90

29 293224202620

50

20

61

0

20

40

60

80

100

120

140

Millions of U.S. Dollars

2006200520042003200220012000

Export Import

Egyptian Export to the U.S. – 1998-2006*Egyptian Export to the U.S. – 1998-2006*

* U.S. Census Bureau

2393.4

2091.2

1283.8

1143

1355.9

882.3

887.8

617.6

660.5

0

500

1000

1500

2000

2500

Millions of U.S. Dollars

20062004200220001998