Egypt and Israel are not mixing trade and politics, or so they say, reports Dina Ezzat Parallel to the build up towards the Annapolis, Maryland, peace meeting, Egypt and Israel this week signed an amended version of their three-year-old Qualified Industrial Zones (QIZ) agreement that allows preferential access to the US market of the jointly manufactured Egyptian-Israeli products. According to the original terms of agreement, components of QIZ products are supposed to be 11.7 per cent Israeli. On Tuesday, following talks between Trade and Industry Minister Rachid Mohamed Rachid and visiting Israeli Deputy Prime Minister and Minister of Industry and Labour Eliyahu Yishai, the percentage of the Israeli component went down to 10.5 per cent. "This is about a 10 per cent cut of the total Israeli share," commented Rachid in press statements that he made at the Heliopolis presidential headquarters following a meeting between President Hosni Mubarak and Yishai. In return for this reduction, Israel will have access to cooperation with a wider number of factories now included in the QIZ agreement. "This effectively means that in return for the cut they agreed upon in the Israeli overall share of QIZ products, Israel will augment its volume of exports to Egyptian factories," Rachid said. He added that the 203 factories so far included in the QIZ agreement are set to increase significantly, mostly via the inclusion of factories in Upper Egypt. On Tuesday, Rachid and Yishai signed a joint letter to US authorities requesting the designation of eight new industrial areas in Upper Egypt as QIZs. The original QIZ agreement was signed in December 2004 by Rachid and his then Israeli counterpart Ehud Olmert, now Israeli prime minister. According to figures quoted by Rachid, Egypt has managed since that time to secure comfortable access to the US market, especially for textile exports that would otherwise have been reduced due to the elimination of previous Egyptian-US export agreements. "During that period Egypt made [over] $1 billion in gains. During the same period the overall volume of Israeli exports did not exceed $1 million. This is certainly a positive outcome, especially that it meant that factories were sustained, the labour force for many factories expanded, and direct foreign investment encouraged," Rachid told reporters. He added that these gains are set to expand further. At its onset, the operation of QIZs was criticised in Egypt as American- imposed industrial cooperation between Egypt and Israel. The Egyptian government was repeatedly criticised for bowing to US pressure scrap prior conditions linking cooperation with advancement in Arab-Israeli peacemaking. It was also criticised for failing to secure a jumpstart to negotiations for an Egyptian-American free trade agreement -- the supposed US reward for Egypt's helping Israel. A particular point of criticism was over Israeli expert access to Egyptian factories, set today to expand. In response to continued criticism Rachid answers: "it is up to the [management] of each factory whether or not it might wish to use Israeli experts," adding "all security matters are very well taken care off. This is for sure." What Rachid was in no position to address is the political impact of such an expanded mode of industrial cooperation while Egypt is trying to secure a positive draft "political document" agreed upon by Palestinians and Israelis ahead of an international meeting that the US is planning to host in November. Egypt has been particularly apprehensive about the true intentions of Israel, first with the Palestinians and also with the Syrians and Lebanese. Egypt has been trying to secure some Israeli commitment to a timetabled peace process, but with little success. According to statements made by Yishai at the presidential headquarters, the Israeli delegation to the peace meeting will not be in a position to commit either to any particular timing or format of peace negotiations, or to reach a declaration of principles -- no matter how tentative -- on final status issues. Yishai all but said that the expected US meeting would be mostly an opportunity for Palestinians and Israelis to explore ideas for the future in the presence of some concerned regional and international players. Concerned Egyptian officials who spoke to Al-Ahram Weekly on condition of anonymity downplayed Yishai's statements and the concerns of critics over the negative impact of greater Egyptian-Israeli cooperation in the absence of serious Israeli commitment to settling the Arab-Israeli conflict peacefully. According to these sources, in view of the fairly stable relationship between the Israeli government and the Palestinian Authority, Egypt has no interest in confusing trade and politics. "Provided there is no major Israeli incursion, for example into Palestinian territories, then Egypt prefers not to mix the bilateral with the regional, especially that the profile of Palestinian- Israeli relations today has been at its best for the past seven years," one informed source suggested. Concerned Egyptian officials say they believe firmly that maintaining positive bilateral rapport with the Israeli government could better position Egypt to press for clear terms of reference for negotiations, a timeline for the negotiating process, and sufficient coherence in addressing final status issues. In line with this position, Egypt has promised to continue its effort to strike the deal to allow for the release of Israeli soldier Gilad Shalit in return for the release of several hundred Palestinian prisoners. During Yishai's meeting with President Mubarak, the Israeli deputy prime minister told reporters, he conveyed a message from Rabbai Ovadia Yussif, the spiritual leader of Yishai's Shas Party, demanding more intensive Egyptian effort towards the release of Shalit.
