Posted on 12/12/2004 6:35:02 PM PST by NormsRevenge
CAIRO, Egypt (AP) - Egypt's coming trade agreement with Israel and the United States is stirring a debate in Egypt, with business executives saying it could create 250,000 jobs in a year and politicians saying it favors Israel.
As part of an accord scheduled to be signed Tuesday in Cairo, goods produced in certain areas in Egypt with a minimum Israeli content will gain tariff-free access to the United States. The deal is one of several moves that signal hopes of reviving the Mideast peace process after the death of Palestinian leader Yasser Arafat last month.
The secretary-general of Egypt's Ready-Made Garment Exporters Association, Magdy Tolba, and the vice chairman of the Chamber of Textile Industries, Mohammed Kassim, said the agreement should give such a boost to clothing manufacturers that they will hire 200,000 to 300,000 workers in the first 12 months after it is implemented early next year.
Many jobs will come from the use of idle capacity, as Egyptian manufacturers have lost American orders to competitors in Jordan and sub-Saharan Africa in recent years, Kassim said. Other jobs will depend on new investment.
The agreement applies to all goods produced within designated areas, and the makers of furniture, electrical and leather products are expected to take advantage.
But clothes and textiles are Egypt's No. 1 export commodity, and 42 percent of the revenue comes from the United States.
Tolba forecasts Egypt's garment exports to America will jump from the current $560 million a year to at least $1 billion by the end of 2005.
"The factories already have the capacity to reach such figures," Tolba said. "This is the reason that the effect (of the agreement) can be quite quick."
The job-creation predictions are dismissed as wildly exaggerated by Rifaat el-Said, the leader of the opposition party Tagammu, and by a former economic minister, Moustafa el-Said. The two are not related.
If it would create 250,000 jobs, "I would sign the agreement," said Rifaat el-Said, whose left-wing party opposes Egypt's diplomatic relations with Israel until there is peace with the Palestinians, Syria and Lebanon.
Moustafa el-Said, who supports relations with Israel, described the agreement as "unbalanced." He said while Israel was gaining the right to make 11.7 percent of the value of Egyptian exports to the United States, it was not granting Egyptian manufacturers a similar input to its exports.
Further, the minimum Israeli input gives Israeli manufacturers too much leverage over their Egyptian counterparts, Moustafa el-Said said.
Manufacturers and the government are well aware that the agreement will not be welcomed in certain quarters. Egyptians have been watching TV clips of Israeli soldiers firing at Palestinians for the past four years.
"The negative aspect is outweighed by the benefits," Kassim said.
The Ministry of Foreign Trade and Industry says it has already received calls from foreign companies interested in investing in the Qualified Industrial Zones, as the areas declared under the agreement will be known.
"We believe the agreement will have enormous impact on Egyptian citizens through job creation, improvement of standards of living, and through peace," said ministry spokeswoman Yasmine Allam.
Jordan's experience supports this optimism. The country set up QIZs to house joint ventures with Israel and export the products to the United States. It now has five and they employ a total of about 75,000 people. Annual exports from Jordan's QIZs have soared from $13 million in 1999 to a projected $800 million this year.
Egypt's negotiations for its QIZs benefited from the political goodwill that has flowed between Tel Aviv and Cairo in recent weeks. But what really concentrated the Egyptian negotiators' minds was the expiration on Jan. 1 of a World Trade Organization agreement that restricts textile imports from the developing world.
Experts forecast that China and India would flood the market with cheaper products in 2005. Egyptian manufacturers feared they would lose up to 45 percent of their exports to America, the world's biggest clothing market.
Nagy el-Fayoumi, an adviser to the minister of foreign trade and industry, acknowledged the government was under pressure to strike a deal before the WTO restrictions expired. Nevertheless, the government got a good agreement, according to manufacturers such as Tolba. "It's even better than we expected," he said Thursday.
Israel and the United States had apparently wanted Egypt to get only two QIZs. On Friday the ministry announced Egypt would get seven - in Port Said and districts in Greater Cairo and Greater Alexandria.
Their products may enter the United States without tariffs if 35 percent of their value was added within the zones, and 11.7 percent was made in Israel.
Egypt confirms trade deal with US, Israel ^
http://www.freerepublic.com/focus/f-news/1297941/posts
Sellout of AMERICA continues.
It's a good agreement for Egypt, for Israel, and for the United States, regardless of what the skinheads (and their Islamofascist brethren) may say.
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