Israel and Egypt are asking the US to expand the qualifying industrial zone (QIZ) agreement for tax exemption on joint exports.
Minister of Industry, Trade and Labor Ehud Olmert, together with his Egyptian opposite number, Rashid Mohamed Rashid, approached United States Trade Representative Ambassador Rob Portman with a request that he should approve the addition of three industrial zones in Egypt to the agreement.
These zones will be designated QIZs, that is zones the products of which contain at least 11.7% Israeli inputs, as stipulated by the agreement. Such products are exempt from taxes and duties when they are exported to the US.
Two of the three new zones that are the subject of the request are in the Greater Cairo area, and the third is in Ismalia.
Since the QIZ agreement came into force in February 2005, Egyptian factories have bought Israeli inputs to the tune of $8.5 million. Exports to the US within the framework of the agreement amount to $65 million.
Olmert believes that the addition of three new QIZs could lead to a substantial rise in Egyptian exports to the US.
Gabi Bar, director of the Middle East Division in the Ministry of Industry, Trade and Labor, says that the initial period of the agreement was one of exploration, testing of the US market and the Israeli inputs. He says that there will be a substantial rise in trade between Egypt and the US in the coming quarters, and, as a result, a rise in trade between Egypt and Israel too.
Published by Globes [online], Israel business news - www.globes.co.il - on September 5, 2005