The Industry, Trade and Labor Ministry on Tuesday signed an upgraded trade agreement with Jordan to ease supervision on jointly produced exports from qualified industrial zones (QIZ) to the United States and boost stronger economic cooperation between the countries.
"The improved agreement will reduce the bureaucracy process in implementing the economic cooperation between the two countries," said Gavriel Maimon, director-general of the Ministry of Industry, Trade and Labor, upon signing the agreement with his counterpart at the Jordanian Ministry of Industry and Trade, Dr. Muntasar Uqla, in Jerusalem.
Under the QIZ agreement, Jordanian companies can export to the US tax-free, provided that 35 percent of the product is jointly Jordanian and Israeli, and that the Israeli component constitutes at least 8%.
Under the new framework of the agreement, supervision of products will be required on a quarterly basis, replacing the current system under which the make-up of each product with Israeli input exported to the US is supervised.
"As Jordan has alternative trade agreements, such as the free-trade agreement with the US, trade on the QIZ has slowed down," said Yitzhak Gal, the economic adviser of the Israel-Jordan Chamber of Commerce. "The easing of the regulation should give the QIZ trade a boost."
Jordan was the first country to sign a QIZ in 1997, which aims to promote closer US trade ties with the Middle East so as to strengthen development, openness, and peaceful economic links between Israel and its neighbors.
Israel's exports to Arab countries grew to $206 million in the first nine months of 2006, 19% more than the parallel period last year. Sales to Egypt led the growth, 36% higher than last year at $92m. influenced mainly by the QIZ agreement signed between the two countries in February 2005. Exports to Jordan in the first 11 months of the year rose 10% to $110m. even as the number of exporters operating there has dropped 25% to 1,300 since 2004.
Foreign Minister Tzipi Livni on Tuesday night met with 60 Israeli and 20 Jordanian businesspeople at the general assembly meeting of the Israel-Jordan Chamber of Commerce, which was attended by Uqla, in an effort to expand and promote trade relations between Israel and Jordan into new areas beyond those presently traded as part of QIZ.
The Jordanian delegation told the Post at the assembly that Israel's bureaucratic visa process was an obstacle for building business relationships with local companies.
"I'm aware of the visa problem and the fact that we need to deal with it in order to improve our economic relations with Jordan," Livni said in her address to the assembly.
She also said the QIZ agreement was not enough to make full use of the potential economic and political relations between the two countries.
The revised agreements came against the backdrop of a surprise visit by Prime Minister Ehud Olmert to Jordan on Tuesday to meet with King Abdullah II.