Cablegate: Egyptian Parliamentarians Question Qiz Program

VZCZCXRO5067
PP RUEHROV
DE RUEHEG #1825 1651123
ZNR UUUUU ZZH
P 141123Z JUN 07
FM AMEMBASSY CAIRO
TO RUEHC/SECSTATE WASHDC PRIORITY 5680
INFO RUEHXK/ARAB ISRAELI COLLECTIVE PRIORITY

UNCLAS CAIRO 001825

SIPDIS

SENSITIVE
SIPDIS

USTR FOR SAUMS

E.O. 12958: N/A
TAGS: ECON ETRD IS EG
SUBJECT: EGYPTIAN PARLIAMENTARIANS QUESTION QIZ PROGRAM

REF: A. 2006 CAIRO 7219
B. 2005 CAIRO 1013

Sensitive but Unclassified, not for Internet distribution.

1. (U) More than 140 members of Egypt's People's Assembly
recently petitioned the government to reevaluate the
Qualified Industrial Zone (QIZ) agreement, according to June
8 press accounts. The parliamentarians requested an analysis
of the economic performance of the agreement since 2004, when
it was signed by the GOE, Israel and the United States, but
did not state outright opposition to it. The 140
parliamentarians represent 30 percent of the seats in
parliament. Although their party affiliation was not
specified in the reports, opposition and independent MP's
hold only 107 seats in the Assembly, so at least 33 ruling
party MP's have apparently signed onto this initiative.

2. (SBU) Ali Awni, head of the QIZ unit in the Ministry of
Trade and Industry, told econoffs that he was not concerned
by the inquiry, which he described as routine. The QIZ
program has faced periodic opposition from members of
Parliament and receives increased attention during troubled
periods in Egyptian-Israeli relations, such as during the
violence between Israel and Lebanon in the summer of 2006
(ref A).

3. (U) While Muslim Brotherhood (MB) parliamentarians have
been particularly critical of the program, a policy platform
recently released by the MB included 26 pages of economic
policy pronouncements that were skeptical of "outside
economic influence," but made no specific mention of the QIZ
or trade with Israel (septel). The only public QIZ
demonstrations have been by workers calling for their
factories to be included in the program (ref B). The GOE
estimates that over 100,000 workers are now employed in QIZ
factories.

4. (U) Separately, the QIZ unit reported in May that overall
QIZ exports to the United States have surpassed USD $1
billion during the life of the program. The May meeting of
the GOE-GOI-USG committee that administers the program took
no action on a long-standing GOE request to lower the
required level of Israeli content in QIZ exports from 11.7 to
8 percent.
JONES

© Scoop Media