Egypt, Israel enhance US free trade accord
Egypt and Israel have agreed to expand the scope of an agreement which allows Egypt to export products containing a quota of Israeli components to the United States free of customs duties.
The deal was hailed as a sign of the success of the Qualified Industrial Zones (QIZ) agreement, which caused a political stir in Egypt when it was launched last December.
The QIZ were so far confined to some areas of Greater Cairo, and the cities of Alexandria and Port Said.
"We have requested the expansion of the QIZ areas to include all of Greater Cairo, Ismailia and Suez... and a new territory in the Delta region," Egypt’s foreign trade ministry said Sunday.
Prime Minister Ahmed Nazif announced the expansion of the program during an electoral meeting of the ruling National Democratic Party late Saturday in Cairo.
"The US trade representative approved the request," the trade ministry confirmed. The upgraded agreement should imply the inclusion of some 300 more companies in the scheme, which currently involves some 400 firms.
"This expansion is not a formal agreement but a mutual letter by Egypt and Israel which was approved by the US," said Ruth Lande, a spokeswoman for the Israeli embassy in Cairo.
"It’s a signal of the QIZ’s success and an indication that Egypt and Israel want to see the agreement bear real economic fruit, beyond the symbol of the signing ceremony," she added.
The QIZ agreement allows Egypt to export products manufactured in designated locations to the United States free of customs duties as long as they contain 11.7 percent of Israeli components.
When it was inked last year, the QIZ agreement was the first trade deal between Israel and Egypt since the two neighbours signed a peace agreement in 1979.
The agreement was initiated in a bid to preserve the competitiveness of Egyptian textiles, an industry that amounts to a billion pounds (172 million dollars) in assets, employs a million workers and contributes 30 percent of Egypt’s industrial exports.
The expansion of the QIZ agreement is expected to eventually lead to negotiations for a free trade agreement between the United States and Egypt.
The volume of bilateral trade between the two countries reached around five billion dollars in 2004. - AFP