Tuesday, December 14, 2004

Egypt trade deal with Israel stirs debate

CAIRO, Egypt -- 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.