QIZ. Your Duty Free Gateway to the US Market. Magic 2019 LAS VEGAS. Gabby Bar Israeli Co-Chairman of QIZ committee Ministry Of Economy & Industry

Transcription

1 QIZ Your Duty Free Gateway to the US Market Magic 2019 LAS VEGAS Gabby Bar Israeli Co-Chairman of QIZ committee Ministry Of Economy &

2 What is QIZ? A QIZ is an area in Egypt, that was designated by the United States, from which goods can be exported duty free and quota free to the United States. In order to enter the US duty free and quota free, these goods must meet the QIZ Agreement criteria and must be approved by the QIZ Committee.

3 Win.Win.Win For the U.S: (a) An unlimited term agreement (b) Allows unlimited textile and apparel imports to USA, duty free (c) Access to highly professional, experienced and skilled Egyptian suppliers (d) Diversifies the sources of imports into the U.S

4 Win Win Win For Israel: Opens new markets for Israeli export For Egypt: Improves competitiveness of their exports to the U.S Joint objective: To enhance business and industrial cooperation and to increase bilateral trade between Egypt and Israel, thus contributing to the bilateral cooperation and peace!

5 QIZ Rules of Compliance The Final Product Other inputs- Direct & Indirect, Local & Foreign origin 65.0% 35.0% Israeli direct inputs 10.5% Egyptian direct inputs 24.5%* 11.7% Minimum Egyptian inputs *Up to 15% can also be sourced from the U.S. The final products must undergo substantial transformation

6 Israeli Advanced Technology and Materials! Fabrics Zippers Chemicals Hangers Packaging Washing Materials Yarn Interlining Elastics Labels Threads

7

8

9 THANK YOU FOR LISTENING! شكرا תודה רבה

10 Trade & Presentation for the Seminar: Importing duty free ready-made garments from Egypt into the US MAGIC February 5 th, 2019

11 Ministry of & Trade Trade& and SMEs QIZ Unit Why to Source from Egypt Lower Shipping Rates Speed to market Good record in compliance Preferential Market Access to US and Other countries Education Egypt s Competitive Advantage Vertical Integration Young Populatio n Cheap Labor Developed Infrastructure Page 11

12 Ministry of & Trade Trade& and SMEs QIZ Unit Market Access In 2015, Egypt reached the 19th p osition (out of 157 countries) in the Unctad's Liner Shipping Connectivity Index" " which measures competitiveness in the maritime system based on the network and the quality of the container liner service offered by the ports. Between 2007 and 2014 Egypt rose 35 positions in the Logistic Performance Index, reaching the 62nd position. Egypt has a number of bilateral investment agreements in place with countries around the world, including the United States, China, Finland, France, Germany, Greece, Italy, Japan, Libya, Luxembourg, Morocco, the Netherlands, Romania, Singapore, Sudan, Sweden, Switzerland, Thailand, Tunisia, and the United Kingdom. Page 12

13 Ministry of & Trade Trade& and SMEs QIZ Unit Main Trade Agreements GAFTA (18 Arab Countries) COMESA (19 African Contries) EU Partnership (28 European Countries) AGADIR (4 North African Countries) Egypt - Turkey Egypt - EFTA (5 Countries) Page 13

14 Ministry of & Trade Trade& and SMEs QIZ Unit Factor costs Labor Cost Other Factors Job Title Project Manager Production Operator Maintenance Engineer Av. Salary (USD/m) Technician Labor Page 14

15 Ministry of & Trade Trade& and SMEs QIZ Unit Developed Infrastructure Egypt offers well-developed infrastructure and continues to invest in upgrades, including investments of more than US$ 15 Billion in roads, electricity networks and irrigation projects. The country s 15 commercial ports serve the nation s exporters and importers alike, while an expanding, upgrading airport network caters to both passengers and cargo traffic, Egypt s Air Cargo Airport currently has three cargo terminals, dealing with textiles, vegetables and many industrial products. Egypt has upgraded its transport infrastructure, adding more than 6,000 kilometers of new roads connecting multiple regions and serving a number of mega projects and investment zones. Egypt's power generation capacity has increased by 45 percent (adding MW) since June 2015 upon completion of three power plants. Page 15

16 Ministry of & Trade Trade& and SMEs QIZ Unit Population and Education Egypt boasts a large, well-trained and highly competitive labor force of around 29.1 million representing more than 31% of the total Egyptian population Youth aged between 18 to 29 years constitute 46.1% of the total labor force in Egypt Post-secondary vocational education and training (VET) in Egypt offers many programs in different specialties and through different types of institutions. There are approximately 108 different technical programs covering 22 disciplines Page 16

17 Trade & Textile in Egypt Page 17

18 Ministry of & Trade Trade& and SMEs QIZ Unit Textile in Egypt Egypt is the largest producer of Cotton and textile clusters in the African continent Textile industry in Egypt is Vertically Integrated Textile Contributes to 3% of Egypt s GDP. It employs almost 30% of Egypt s Industrial workforce (1.2 Million). It is responsible for 15% of Egypt s non-oil& Gas Exports (USD 2.6 Billion). 90% of the Ready-Made Garments are owned by the private sector The United States represents 55.9% of Egypt exports of ready-made garments, having the largest share of Egypt exports Page 18

19 Ministry of & Trade Trade& and SMEs QIZ Unit Egypt and U.S. Trade in RMG Egypt is among the top 20 countries exporting ready-made garments to the US markets Egypt s exports to the U.S. increased by 25.27% during the first half of 2018, which is the highest percentage increase among the top 25 exporting countries Egypt-U.S. trade benefits from two initiatives: U.S. Generalized System of Preferences (GSP) The Qualifying Industrial Zones (QIZs) Page 19

20 Trade & The Qualifying Industrial Zones (QIZs) Page 20

21 Ministry of & Trade Trade& and SMEs QIZ Unit Qualifying Industrial Zones The QIZ is a protocol signed between Egypt, USA and Israel in 2004 and entered into force in 2005 that allows Egypt to benefit from the Israeli Free Trade Area Agreement with the U.S According to this protocol, some areas are designated by the Egyptian and Israeli authorities and approved by the U.S. government, where products of these zones can be exported duty free to the U.S. Page 21

22 Ministry & Trade of and Trade& SMEs QIZ Unit Rules of Origin Requirements The product must be imported directly from the QIZ or Israel The product is substantially transformed The sum of the cost of the materials produced and the direct cost of processing operations performed must not be less than 35% of the appraised value. Egyptian manufacturer in the QIZ must contribute one third (11.7%) of the 35% content requirement The remainder of the 35% can come from West Bank, Gaza Strip, Israel, the QIZ, or as mentioned, the U.S The Israeli components must contribute 10.5% Page 22

23 Ministry of & Trade Trade& and SMEs QIZ Unit QIZ figures In Egypt, 11 governorates have qualified industrial zones There are over 1000 registered QIZ companies, 50% of them are located in Greater Cairo Region. 80% of these companies produce textiles and clothing items. Of these, 196 produce ready-made garments. Page 23

24 Ministry of & Trade Trade& and SMEs QIZ Unit QIZ figures Egypt is among the top 20 countries exporting ready-made garments to the US markets In 2017, QIZ exports totaled USD million QIZ exports make up 46.7% of Egypt s total exports to the U.S. Readymade garments and textiles represent 98% of the QIZ total exports. QIZ exports of ready-made garments represent 91.75% of Egypt s total exports of ready-made garments Page 24

25 Ministry of & Trade Trade& and SMEs QIZ Unit Top Exported RMG Products 2018 YTD Tshirts and top tanks 9% Baby garments Dresses and skirts 1% 1% Swimwear 1% Shirts and blouses 10% Others 3% Jackets and pullover 18% Underpants and night dresses 6% Pants and shorts 51% Page 25

26 Ministry of & Trade Trade& and SMEs QIZ Unit QIZ top U.S. buyers Page 26

27 Ministry of & Trade Trade& and SMEs QIZ Unit Contact Us Latin America Street, Garden City, Cairo, Egypt Page 27

28 Trade & Thank You Page 28

29 Improving operational, social and environmental capabilities of Egyptian suppliers under the Global Textiles and Clothing Programme (GTEX) By: Matthias Knappe Sourcing at Magic Date: 5 February 2019

30 ITC is also a partner in the Social & Labor Convergence Project (SLCP) Objective: To create a Converged Assessment Framework for social and labour data collection that will eliminate audit fatigue. Partners: Many brands already participate, SLCP targets 10,000 T&C companies by The SLCP system avoids duplications & reduce the number of social and labour audits, providing 1 standardized data collection framework This allows resources to be redirected from audits towards improving social and labour conditions. ITC built the online tool that facilitates the hosting & sharing of SLCP verified assessments (the Gateway) This centralized framework builds on ITC s experience of running Sustainability Map.

31 31 ITC s Global Textiles and Clothing Programme Overview 3 year programme: priority countries Egypt (QIZ) Jordan (QIZ) Morocco (FTA) Tunisia, Kyrgyzstan, Tajikistan

32 Transforming Suppliers to Meet Clients Requirements Before Design Product dev. Sourcing Sampling Manufacturing Shipping Warehousing Distribution Retailing Supplier s Responsibilities Client s Responsibilities Increasing value Design Product dev. Sourcing Sampling Manufacturing Shipping Warehousing Distribution Retailing Circular Design Social and environnemental sustainability CO2 Reductions Now & Future 32

33 33 Working directly with enterprises and institutions Enterprises Selection of approx enterprises in Sports and active wear Men's shirts (Egyptian cotton) Knitwear Improving dying and finishing facilities Pilot on working with 5 companies in rural areas Institutions: Apparel Export Council Textile Export Council Fashion Design Centre Export Development Agency

34 34 Collaboration with US & other partners Complementing our trade-related expertise: Working with USFIA, other American associations to build capacities at institutional level in Egypt Working with US retailers & buyers to upgrade their suppliers Working with US universities to build a support infrastructure to capacitate all enterprises

35 35 THANK YOU Matthias Knappe Programme Manager, Fibres, Textiles & Clothing International Trade Centre (ITC)