Israel, Egypt sign trade accord
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Tal Muscal, THE JERUSALEM POST Dec. 14, 2004--------------------------------------------------------------------------------
More than two decades after concluding a peace treaty, Israel and Egypt signed an historic trade accord Tuesday, giving certain jointly produced goods in three Egyptian areas duty-free access to US markets.
The agreement was signed by Industry, Trade and Labor Minister Ehud Olmert, his Egyptian counterpart Rachid Mohamed Rachid and US Trade Representative Robert B. Zoellick. It will create three Qualified Industrial Zones (QIZs), similar to those established by Israel and Jordan in 1996.
Under the program, goods manufactured through joint ventures between Israeli and Egyptian firms, set up in three areas – greater Cairo, Alexandria and the Suez Canal Zone (Port Said industrial area) – can gain tariff-free entry to the US, provided that 35 percent of the product is jointly Egyptian and Israeli, and that the Israeli component constitutes at least 11.7%.
Olmert concluded a meeting with Egyptian President Hosni Mubarak in Cairo earlier Tuesday and told the Egyptian, Israeli and foreign press that the accord "will be good for Israel, good for Egypt, and good for the entire Middle East."
Olmert used the opportunity to reiterate the country's desire for peace, saying that Israel's commitment to the road map peace plan lay farther then the Gaza disengagement plan.
"This is not the end of the story; rather the beginning, as we are committed to the road map frame work," Olmert said in response to a question by Egyptian media.
Egyptian Industry and Trade Minister Rachid Mohamed Rachid expressed his hope that the new agreement will assist not only in economical cooperation between both countries but also on the diplomatic track.
"Economic interests alone are not linked to this agreement. This agreement is consistent with our efforts, which started a long time ago with the signing of peace between Israel and Egypt. There is no time to wait, and we must act now to secure peace and prosperity."
On the new economic framework between both countries, Olmert raised the example of the Jordanian QIZs, which has so far brought in almost one billion dollars in Jordanian exports to the United States.
According to the US State Department, Jordan's QIZs are the kingdom's strongest engine for job growth, with estimates of over 35,000 positions created in Jordan's 12 special trade areas. Furthermore, exports from Jordan to the US have surged from just $31 million in 1999 to $674m. in 2003.
"Under the umbrella of free-trade agreement that Israel has with the US, Egypt will dramatically increase its exports to the US. Far beyond trade, this is another commitment of two major forces in the Middle East to greater cooperation, continuity, and stability," Olmert said.
He thanked Mubarak for his repeated display of confidence in Prime Minister Ariel Sharon's efforts to bring about peace in the region.
A few Egyptian industrialists have already expressed a positive outlook regarding the agreement. Speaking to foreign journalists, Magdy Tolba, the secretary-general of Egypt's Ready-Made Garment Exporters Association, and Mohammed Kassim, the vice chairman of the Chamber of Textile Industries, said the agreement should give clothing manufacturers a reason to hire 200,000 to 300,000 workers in the first year after it is implemented in early 2005.
Clothes and textiles are reportedly Egypt's top export commodity; 42% of the revenue comes from the US markets, making the QIZ agreement even more worthwhile to Egypt.
The accord is only one of several confidence-building measures by Jerusalem and Cairo following the death of Palestinian Authority chairman Yasser Arafat last month.
Last week, Mubarak ordered the release of Azzam Azzam, the Israeli Druse imprisoned on charges of espionage, who had served eight years of a 15-year sentence. In return, Israel released six Egyptian students caught while attempting to infiltrate the country.