Qualifying Industrial Zones (QIZs)
The Qualifying Industrial Zones (QIZ) Protocol was established by the U.S. Congress in 1996 to build economic ties between Israel and its neighbors. Since the agreement took effect in February 2005, it has allowed products jointly manufactured by Egypt and Israel duty-free entry into the U.S. Eligible products must have at least 35% of their value added by QIZ factories. Egypt must contribute at least one-third (11.7%) of this value add, while Israel must contribute 10.5%. Egypt's government held talks throughout 2017 to lower the Israeli input requirement to 8% and to expand the scope of the program to include tech companies.
Qualifying Industrial Zones in Egypt are located in the Greater Cairo Zone, the Alexandria Zone, the Suez Canal Zone, the Central Delta region and Upper Egypt. These five regions cover multiple districts and governorates including:
- Greater Cairo Zone: Giza, Shoubra El Kheima, Nasr City, Tenth of Ramadan City, Fifteenth of May City, Badr City , Sixth of October City, El Obour City , Kalioub City and the industrial area in Gesr El Suez.
- Alexandria Zone: Borg El Arab and Dakahleyya governorate.
- Suez Canal Zone: Port Said, Ismailia and Suez.
- Central Delta region: Gharbeyya, Monofeya, and Damietta governorates.
- Upper Egypt: Minya and Beni Suef governorates.
Egypt’s 15 QIZs are located in Greater Cairo, Alexandria, the Suez Canal zone, the central Delta, Beni Suef and Minya. There are over 900 registered QIZ companies, of which the vast majority produce textiles and clothing items. Because U.S. tariffs on textile and apparel goods are relatively high, production of these goods in QIZs is particularly attractive. Other eligible sectors are food and beverage, leather and glassware.
QIZ exports make up 46.0% of Egypt’s total exports to the U.S. and 52.1% of non-oil exports. In 2017, QIZ exports totaled USD 752.7 million, a 1.5% year-on-year increase from USD 741.8 in 2016. Although Jordan and the West Bank are also eligible for the QIZ program, Egyptian products made up 97.4% of program-eligible exports. Textile and clothing exports made up 97.1% of all of Egypt’s QIZ exports in 2017, while food and beverage items made up 1.6%. Chemical and fertilizer minerals, which were not exported in 2016, was also among the top 10 products.
(Updated March 2018)