Israeli Exports to Egypt and Jordan grew in 2008 at slower rate

Exports from Israel to Jordan increased some 15% in 2008, totaling US$289 million. Exports to Egypt increased by 3%, totaling US$160 million
 
Chairman of the Board of Directors of the Israeli Institute for Export and International Cooperation, Mr. David Artzi, said last week that commercial exports from Israel to Jordan increased some 15% in 2008, totaling US$289 million.
 
Exports to Egypt increased by 3%, totaling US$160 million.
 
The increase in exports for 2008 did not match that of 2007. In 2007, exports to Jordan increased by 85% while exports to Egypt increased by 10%.
 
According to the institute, these increases come on the back of free trade agreements between Israel and the two neighboring countries despite the economic crisis, which has severely affected Egypt's economy, and the deterioration of Jordan-Israel relations.
 
The slowing down of Israeli exports to Jordan can be explained in view of the coming into force of the U.S.-Jordan Free Trade Agreement (FTA). The FTA entered into force on December 17, 2001 and it will eliminate tariffs on U.S. and Jordanian goods over a ten-year period.
 
The coming into force of the FTA will reduce the attractiveness of the qualifying industrial zones ( QIZ ) agreement. The QIZ agreement allow Jordan to export products to the United States duty-free if the products contain inputs from Israel.
 
The immediate saving for an investor in the QIZ is the amount of the U.S. tariff on any specified good.  Generally speaking, U.S. tariffs on clothing and textile goods are relatively high, which has made production of these goods in QIZs especially attractive.