Egypt proposes to lower Israeli content required in QIZ-made goods

The industrial zones were granted by the United States in support of joint activities with Israel
 
According to multiple press reports, Egyptian Minister of Industry and Foreign Trade Hatem Saleh said recently, that Egypt wants to lower from 10.5% to 8% the value of Israeli content required in goods made in qualified industrial zones that receive duty-free treatment when shipped to the United States.
 
Egypt’s economy is continuing to struggle in the wake of last year’s popular uprising. Saleh said amending the QIZ agreement would provide an economic benefit to Egypt’s raw materials sector. Press sources note that about 700 factories in Egypt are currently operating in 15 designated QIZs, employing some 100,000 workers, mostly in textile and apparel production.
 
In 2004, the United States, in support of joint industrial activities with Israel, granted Egypt with the so-called Qualifying Industrial Zones (QIZ); special zones whose products can enter the American market duty-free as long as they respect the relevant rules of origins. In the Egyptian case, this implies a minimum of 35% local content, of which at least 11.7% should be Egyptian content, and 10.5% Israeli content. The QIZ have been a remarkable success.
 
However, the QIZ—while supporting an Egyptian textile industry, have not played any role in deepening the economic reforms that would have been supported by a free trade agreement.