Israel renews rejection of Egypt’s request to adjust QIZ treaty

Israel renewed its rejection of Egypt’s request to adjust the Qualifying Industrial Zones (QIZ) treaty during a joint committee meeting held last week, said head of Egyptian Ready-Made Garments Export Council on Wednesday.

Egypt is seeking amend reduce the required Israeli input in products exported under QIZ treaty to 8 percent, from 10.5 percent

Signed in late 2004, the QIZ agreement granted Egyptian clothing manufacturers zero-tariff access to the US market as long as their products contained at least 10.5 percent Israeli input.

A reduction in Israeli component requirements, say Egyptian observers, would benefit Egypt’s raw-materials sector.

Mohamed Kassem, Chairman of the Egyptian Ready-Made Garments Export Council, told Amwal Al Ghad that it is not the first time for Tel Aviv to decline the Egyptian demands to reduce the Israeli component in QIZ exported products.

Talks with Israeli authorities are still ongoing; Cairo is determined to adjust QIZ treaty terms, sources in the Egyptian ministry of trade told Amwal Al Ghad.

Egyptian and Israeli officials will meet again within July in Tel Aviv for a new round of talks, the sources added.

In July 1999, Egypt and the United States signed the Trade and Investment Framework Agreement (TIFA) as a preliminary step towards a free trade agreement between the two countries. Proceeding in that same direction, the U.S. announced the formation of Qualified Industrial Zones (QIZs) in Egypt on December 10, 2004.

According to recent statistics from Egyptian Ministry of Trade, Egypt’s total exports of ready-made garments under the QIZ treaty are estimated at US$800 million annually.