Trade regimes and global production networks: The case of the Qualifying Industrial Zones (QIZs) in Egypt and Jordan

Abstract

The fragmentation and dispersion of productive activities and the emergence of global production networks (GPNs) as key organisational structures for managing production and trade at a global scale has received growing attention over the past two decades. The role of trade policy and preferential trade regimes in shaping these production networks has been documented in this literature. Our understanding of the relationship between GPNs and trade regimes remains, however, underdeveloped. By examining the case of a trade agreement implemented in Egypt and Jordan as part of the “Middle East Peace Process”, this paper highlights how the shifts in global production networks and key actors within these networks were key drivers of this agreement. It also shows how the interaction between GPN dynamics and actors, the configurations of the trade regime, and the distinct locational and regulatory factors in the two countries led to production and trade outcomes that differed from the original objectives of the trade agreement. Through this case, the paper shows that more theoretical and empirical research is needed to unpack the interaction between trade regimes and global production networks at the level of the political economy of these trade regimes and also on how the specific requirements of these regimes interact with GPN dynamics to produce distinct geographies of global flows, production, employment, and development.