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.