About QIZ >
What is QIZ?
Qualifying Industrial Zones (QIZ) are designated geographic areas, within Egypt, that enjoy a duty free status with the United States. Companies located within such zones are granted duty free access to the US markets, provided that they satisfy the agreed upon Israeli component, as per the pre-defined rules of origin.
In early 2005, the QIZ started operating in 7 designated industrial locations in Egypt. Starting with an initial 397 qualified companies in these 7 locations, QIZ has rapidly expanded to encompass over 15 currently designated industrial zones, with nearly 700 qualified companies, and more qualifying each quarter, amounting to more than $1 billion annual revenues.
As global competitiveness increases, Egypt’s QIZ offers investors significant long-term advantages over other preferential trade agreements due to its ongoing commitment with no expiration date and no reduction in tariff schedules.
The benefits of Egypt's QIZ are various; ease of access to US markets being the most important, with open, unlimited quota as well as exemption of tariff and non-tariff barriers. Other benefits include: low factor costs as well as a huge supply of labor force. Enhanced by the added benefits of trade agreements with other markets, Egypt is ideally-suited to provide countless economic benefits to industries located within these zones. The positive economic impact of the QIZ to date has been such that foreign investors and Egyptian companies alike are continually seeking to locate and qualify their businesses within these zones in order to increase their competitiveness and profitability.
Exports from Egypt have greatly risen since QIZ began, with the bulk of these exports going to US markets. Furthermore, companies exporting under the QIZ have enjoyed higher profits as a result of their unrestricted duty-free access.
As QIZ companies continually expand to keep up with this growth, Egypt is benefiting through a decreasing unemployment and a strengthening economy which would eventually strengthen Egypt's position on the world economic map.
The Qualifying Industrial Zone(QIZ) concept was introduced
by the United States in 1996 with the aim of reinforcing peace in the Middle
East through regional economic partnerships which benefit both Arab
countries and Israel. To this end, the US issued the decree 6955, in
December 1996, which authorized duty-free entry into the US for industrial
products originating in Egypt and manufactured jointly with Israel, in
compliance with the international rules of origin.
In 1999, Jordan became the first country within the region to sign a QIZ
protocol and has enjoyed significant positive economic impacts ever since.
The Egyptian government took this into consideration with various other
factors when determining whether to implement a Protocol for Egypt. In
addition to the results enjoyed by Jordan, Egypt also recognized the threat
posed to Egypt’s international competitiveness in the textile and ready-made
garment industry due to the phasing out of the World Trade Organization’s (WTO)
quantitative quotas on textiles. Ultimately, the government determined that
it was necessary to negotiate a Protocol in an effort to protect the
industry, and to allay concerns of textile manufacturers and employees.
While other industries also benefit, the textile industry, with one billion
Egyptian pounds in assets, employs a million workers and contributes 30% of
Egyptian industrial exports, and stands to gain the most.
In December 14, 2004, the Egyptian government signed the Qualifying
Industrial Zones Protocol with the US and Israel. The Protocol allows for
duty-free entry into the US for products manufactured by qualified companies
operating within designated geographic locations in Egypt which satisfy the
currently agreed upon Israeli content of 11.7%.
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