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(Article): The QIZ & Egyptian Textile Industry *:
On Tuesday December 14, 2004 Rashid Mohammed Rashid, Egyptian Minister of Trade & Industry signed the QIZ (Qualified Industrial Zones) agreement in the presence of the Egyptian Prime Minister Ahmed Nazif and US Trade Representative Robert Zoellick. QIZs are industrial parks that will be set up in Egypt from which goods can be exported duty-free to the US. The Qiz agreement is just a step for negotiations with the US to establish an Egyptian- American FTA which would give more Egyptian exports the same benefits.
The Qualified Industrial Zones (QIZs) agreement opens the US market to goods that produced in pre-determined industrial zones in Egypt. The US delegation, led by Republican Senator Robert Ney, described relations with Egypt as extremely vital at the regional level, Cabinet spokesman Magdi Radi told reporters.The Egyptian government said that the agreement was the first step towards a full free trade deal with the United States.
Under the agreement, similar to one with Jordan, Egyptian companies in seven designated zones can export their products to the United States without duty or quota restrictions. The seven zones include four in the Greater Cairo Area, two near Alexandria and one in the Suez Canal city of Port Said. New zones are to be also included in the near future to the agreement according to governmental resources in the Egyptian ministries of investment industry and foreign trade.
QIZs will be instrumental in Egypt's efforts to encourage growth, increase exports, attract foreign direct investment, and of course create new jobs in Egypt. Egyptian manufacturers of clothes and textiles say the QIZ agreement could create 250,000 jobs in one year. The government added that it believed that such international trade agreements would not only facilitate global integration but would act as important catalysts for domestic reform.
Egypt sends out 42 per cent of its textile and clothing exports to the US market. “Exporting via production in QIZs will give Egyptian exports an edge over Chinese and Indian products," said Mohammed Qassem, garment manufacturer and major Egyptian exporter to the US. Samia Fawzi, senior assistant to the foreign trade and industry minister, said that “the agreement is to ensure investments of around $13 billion”.
Not only will this agreement stimulate at least $1 billion boom in Egyptian textile exports over the next two to three years, but it will also generate more than 250,000 new jobs and help attract more foreign investment into productive sectors of the economy. Taher Helmy, president of the American Chamber of Commerce in Cairo (Amcham), predicted that increased exports to the world's largest market would mean more job opportunities, economic growth and improved living standards.
The Qualified Industrial Zones (QIZs) agreement opens the US market to goods that produced in pre-determined industrial zones in Egypt. The US delegation, led by Republican Senator Robert Ney, described relations with Egypt as extremely vital at the regional level, Cabinet spokesman Magdi Radi told reporters.The Egyptian government said that the agreement was the first step towards a full free trade deal with the United States.
According to concerned industry circles in the region, Egypt is expected to overwhelm the US textile market due to many reasons. Compared to Jordan, which signed the QIZ in 1996, Egypt has many advantages as it has several ports for exporting, investment incentives, low wages of trained labours, and low costs of water, energy and raw materials. Under the QIZ, Egyptian textile exports to US are expected to reach US$ 4 billons in five years.
*sources:
Al Ahram Weekly, 18-24 November, 2004
Middle East Times 14 December, 2004
Al Aharam –Weekly 9-15 December, 2004; By: Ibrahim Nafie |
