Israel, Jordan upgraded QIZ trade pact

Jan 1, 2007

Under the new upgraded agreement, the parties will switch to a quarterly review, replacing the current method of supervising the Israeli inputs in good assembled in Jordan

Gavriel Maimon, director-general of the Ministry of Industry, Trade and Labor, signed last week in Jerusalem an upgraded trade agreement with his counterpart at the Jordanian Ministry of Industry and Trade, Dr. Muntasar Uqla.

The newly signed agreement intends to improve supervision on compliance with rules of origin under the qualified industrial zones (QIZ) treaty. Under the new upgraded agreement, the parties will switch to a quarterly review, replacing the current method of supervising the Israeli inputs in good assembled in Jordan and exported duty-free to the US under the original 1997 QIZ treaty.

Under the QIZ agreement, Jordanian companies can export to the US duty-free, provided that 35% of the product shipped to the USA is jointly Jordanian and Israeli, and that the Israeli component constitutes at least 8% of the exported value.

The 1997 treaty has proven its worth to both Israel and Jordan, boosting Israeli exports to Jordan as well as Jordanian exports to the US. During the period January - November 2006 Israeli export to Jordan was up 10% compared to the same period last year. Total value of goods exported was US$110 million. Most of the export are raw materials shipped to the QIZ production facilities in Jordan.