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Israeli factor in Egyptian garments boosts exports to US
Dec '10
Export of Egyptian apparels to US market has increased twice to touch $800 million over the last five years and is likely to rise by 25 percent in the coming year. This has been possible because of the US-brokered trade deal of 2005 with Israel.

Egypt is, currently, involved in a dialogue with US to widen the scope of the trade deal. Additional Qualifying Industrial Zones (QIZ) are also being set up in Egypt, which is the most populous Arab country and the third biggest economy next to Saudi Arabia and United Arab Emirates. According to the deal, a zero-duty export of products with Israeli components like zippers and buttons has been permitted to the Egyptian companies.

Use of Israeli components in Egyptian apparels has enhanced Egypt's apparel exports to US. This has also generated job opportunities for women and youth in the country.

The Egyptian government has not been dissuaded from continuing its trade relations with its neighbor. The government intends to widen the zone agreement to incorporate all the provinces of Upper Egypt, which is a backward region located towards the south of Cairo. Expansion of trade zones towards the south is likely to support the labor-intensive industries.

Over 700 Egyptian firms are based in the zones. Initially, four areas in the northern part of Egypt were selected for QIZs and the zone agreement was further widened last year to include the southern provinces of Beni Suef and Minya.

Israel's bilateral exports to Egypt have increased considerably owing to the QIZ agreement. Israel's exports to Egypt had increased 50 percent to reach $90 million in the year after the deal was signed.

Fibre2fashion News Desk - India

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