U.S. designates Egypt-Israel trade zone

CAIRO - The United States will designate a new Qualified Industrial Zone and expand two existing ones to strengthen Egyptian-Israeli trade and political relations, the U.S. Embassy said in a statement yesterday.

Egypt signed a trade agreement with the United States and Israel last year to enable it to export Egyptian-made products to the U.S. duty-free if the products contain at least 11.7 percent input from Israel.

A new zone to be created in Egypt's central Nile Delta region takes the number of so-called QIZs to eight, the statement said.

The changes will allow previously excluded factories to benefit from the zones, particularly in the provinces where Egypt's textile industry is concentrated.

U.S. Trade Representative Rob Portman said the QIZs have helped "dramatically increase trade" between Egypt and Israel.

"Egypt's and Israel's desire to expand their QIZs underscores the success of this program in fostering closer ties between the people, businesses and governments of these two key Middle East countries," said Portman in the embassy statement.

Last December, garment workers in the Suez and Nile Delta regions protested after their factories were left out of the initial trade deal that set up the other zones.

Egyptian manufacturers of clothes and textiles - the country's top export - said the QIZ agreement could create 250,000 jobs in 2005.

Political opponents dismissed the figure as exaggerated, but a similar QIZ agreement among Jordan, the U.S. and Israel has dramatically boosted Jordanian exports to America and created 40,000 jobs.