Qualifying Industrial Zone (QIZ) exports have increased this quarter by 10.6 percent from $164.7 million to $182.3 million.
While the increase in exports may seem substantial, Karim Shafie managing partner of Gherzi – a specialized textile consulting company – thinks it should have been much greater. “The QIZ is doing much better in other countries, said Shafie, who cited Jordan, which in three years has increased exports from an average of $50 million to $700 million.
Under the terms of the agreement, goods produced in Egytp’s QIZs – areas designated by the Egyptian government in concurrence with the United States – that contain a percentage of Israeli content are granted duty-free entry into the US market.
Previously, only 135 companies were participating in the QIZ, but this quarter saw that number increase to 151. “It’s not enough, added Shafie, who still thinks that the increase in participating companies is not significant at all in comparison to other countries which are also part of the QIZ.
Farouk El Mezeny, CEO of El-Mezeny Company in Port Said, has more than 30 years of experience in the export/import industry. He says, “The QIZ is great. He cited its varying benefits – from increasing the amount of foreign currency in the country’s national income to more employment opportunities. “It even ensures better quality of products because of international standards and competition, he added.
El-Mezeny agrees that this quarter’s increase in exports is insufficient. “Egypt isn’t performing as well as it should be. He believes that there needs to be changes to the export industry for Egypt to be able to maximize its performance such as decreasing the cost of storage and shipment of products as well as abolishing the bureaucracy that delays shipments. “We also need to cancel all taxes on the raw materials imported for manufacturing, he added.
Ali Awny, head of the Ministry of Foreign Trade and Industry’s QIZ unit, could not be reached for comment.
QIZ was first introduced in 1996 when the US Congress aimed to support peace in the Middle East, issuing decree 6955 which allowed duty-free entry into the US for the industrial goods originating from Egypt with inputs from Israeli.
While this protocol is not an exchange arrangement between Egypt and the United States, it is expected to be a step towards a Free Trade Agreement between the two countries.