Israel contributed approximately $1.7 billion to the Jordanian and Egyptian economies through the qualified industrial zone programs with those countries, research company Business Data Israel said Wednesday. The data was released the same day a delegation of Egyptian trade and industry representatives arrived in Israel for the quarterly discussions on the QIZ agreement between the two countries.
During Wednesday's meeting in Jerusalem, the QIZ committee reviewed Israeli exports to Egypt and those of Egypt to the US, renewed permits for participating companies for the next quarter and approved requests for companies from both countries to join the framework of the agreement.
Israel signed a QIZ agreement with Egypt in February 2005 whereby the Egyptian companies can export to the US tax-free, provided that 35% of the product originates in Israel and Egypt with the Israeli component making up 11.7%.
The agreement helped boost Israeli exports to Egypt from $29m. in 2004 to $93m. the following year and to $126m. in 2006, the Ministry of Industry, Trade and Labor said.
"Exports to Egypt under the QIZ will reach its full potential as Egyptian players are expecting their sales to the US to gain significant momentum in the second half of 2007 and the beginning of next year," said the ministry's Gabi Bar, the Israeli co-chairman of the QIZ committee.
Israel has a similar agreement with Jordan, signed in 1997, although that QIZ is less effective today after Jordan signed a free trade agreement with the US in 2000.
Still, researchers BDI noted that the agreement is still in operation and helped Jordanian exports to the US to reach around $1b. in 2006. Egyptian exports to the US were $643m. last year and are expected to reach the $1b. mark in 2007, BDI said.
"Within five years, Egyptian exports to the US in the framework of the QIZ agreement should reach $4b.," the research company said referring to Egyptian exporter's forecasts.
That rising trend should bode well for Israeli manufacturers and exporters, whose products are required in the exported goods.
Israeli exports to Egypt and Jordan, under the QIZ agreements, grew to $160m. in 2006, from $107m. the previous year, BDI said.