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