US wants trade agreement with Egypt
Egypt-USA, Economics, 11/2/2005

US Trade Representative Rob Portman said Egypt is one of four Middle Eastern nations the United States is considering to sign free agreement with.

In a statement to the Congress he said the step is based on the December 2004 Declaration upon which the first three Qualified Industrial Zones (QIZs) were launched in Egypt, pointing to the agreement reached between Egypt and Israel which provides that at least 11.7% of the components of the covered products must be Israeli.

The United States expects that such Egyptian zones would be an incentive to trade and economic growth and would embody the positive and peaceful vision of the future of the Middle East.

The United States is working with the economic reform team in Egypt to enhance bilateral trade relations, he said, adding that a new industrial zone, namely "Middle Delta" will be added to QIZ Protocol.

Background on Qualified Industrial Zones (QIZs)

In 1996, the US Congress authorized the designation of QIZs between Israel and Egypt, and Israel and Jordan.Ê The QIZs allow Egypt and Jordan to export products to the United States duty-free if the products contain inputs from Israel.Ê The purpose of this trade initiative has been to support prosperity and stability in the Middle East by encouraging regional economic integration.Ê

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.Ê This 35 percent minimum content figure can include value added in Israel, Egypt, or the United States.Ê 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.Ê Exports from Jordan to the United States grew from $31 million in 1999 to $1.1 billion in 2004.Ê

Jordan's QIZs are the country's strongest engine of job growth.Ê 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.Ê 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.Ê President Bush has proposed the creation of a Middle East Free Trade Area (MEFTA) by 2013 to increase trade and investment with the United States and others in the world economy.Ê The United States currently has Free Trade Agreements (FTAs) with Israel, Jordan, and Morocco; FTA negotiations with Bahrain and Oman have been concluded; and FTA negotiations with the United Arab Emirates are underway.Ê The United States is working with Egypt's economic reform team to deepen our reciprocal trade relationship.Ê In September, Ambassador Portman informed Congress that Egypt is one the four countries which the United States is currently considering as candidates for free trade agreements.

Previous Stories:
  Intensive talks to solve disagreement over Free Trade Agreement   (9/30/2005)
  Egypt is nearing the signing of a free trade agreement with the United States   (9/26/2005)
  No American pressure on Egypt for not cultivating wheat   (9/14/2005)

Please add a link on your webiste pointing to ArabicNews.com and bookmark ArabicNews.com & subscribe to our daily email news bulletin.

Search