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Cablegate: Moving Forward On Qiz Expansion

VZCZCXYZ0002
PP RUEHWEB

DE RUEHEG #2507 3510719
ZNR UUUUU ZZH
P 160719Z DEC 08
FM AMEMBASSY CAIRO
TO RUEHC/SECSTATE WASHDC PRIORITY 1059
INFO RUEHTV/AMEMBASSY TEL AVIV PRIORITY 1813
RHEHAAA/WHITE HOUSE WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY

UNCLAS CAIRO 002507

SENSITIVE
SIPDIS

DEPT FOR NEA/ELA AND NEA/IPA
TEL AVIV FOR APRIL COHEN
TREASURY FOR BRYAN BALIN AND FRANCISCO PARODI
WHITE HOUSE FOR USTR/SONIA FRANCESKI

E.O. 12958: N/A
TAGS: ECON ETRD EFIN EINV PGOV PREL IS EG
SUBJECT: MOVING FORWARD ON QIZ EXPANSION

REF: A) 07 CAIRO 3022 B) 08 CAIRO 2410

1. (U) This is an action request. Please see paragraph six.

2. (SBU) On December 14, econcouns met with Ali Awni, chief
of the Qualifying Industrial Zone (QIZ) Unit of the Ministry
of Trade and Industry (MTI). Awni stated that he hoped
further consideration of the proposed QIZ expansion to Upper
Egypt (ref a) could still take place this year. Awni told us
that the Egyptian QIZ Unit and their Israeli counterparts
were preparing a joint letter (ref b) to USTR proposing a
revision to the expansion request originally submitted in
October 2007. This proposal would ask for a more limited
expansion of the QIZ to only Beni Suef and Minya
governorates. He informed us that the Commercial Counselor
at the Egyptian Embassy in Washington had recently discussed
this idea with USTR in Washington. In connection with this
new, more limited expansion request, Awni promised to provide
us with the names of companies in Beni Suef and Minya with
the potential to export under the QIZ program. He hopes to
have this information to the Embassy by December 16. He
reiterated that many of these companies were very small with
only a handful of employees.

3. (SBU) In addition to the QIZ request, Awni expressed
concern that the USG has not yet responded to a separate
Egyptian proposal to establish a memorandum of understanding
(MOU) with the U.S. Customs and Border Patrol (USCBP)
division of DHS. This proposal, unrelated to the request for
QIZ expansion, was made directly by the Egyptians to DHS this
past spring. The purpose of the agreement is to help the
Egyptians gain greater expertise in compliance with and
enforcement of existing QIZ terms and documentation.

4. (SBU) In a subsequent conversation on December 15, MTI
Senior Advisor Sayed Elbous told econoff that he hopes to
have a signed, joint Egypt/Israel letter with the formal
request for a more limited QIZ expansion ready by December
16. It was not clear to us if he will deliver that to us
here in Cairo or through the Egyptian Embassy in Washington.

5. (U) Post will forward the list of potential QIZ exporters
upon receipt. We also stand ready to assist visitors from
USTR who would be interested in a site visit to the proposed
QIZ expansion areas. Both Beni Suef and Minya can be visited
in a day-trip from Cairo.

6. (SBU) ACTION REQUESTED: Post would appreciate a status
update, as soon as it is available, on the GOE's outstanding
request for an MOU between the GOE and U.S. Customs.
SCOBEY

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