VZCZCXYZ0000
RR RUEHWEB

DE RUEHTV #1754 2241140
ZNR UUUUU ZZH
R 111140Z AUG 08
FM AMEMBASSY TEL AVIV
TO RHMFUU/WHITE HOUSE WASHDC
RUEHC/SECSTATE WASHDC 7938
INFO RUEHAM/AMEMBASSY AMMAN 4583
RUEHEG/AMEMBASSY CAIRO 2582

UNCLAS TEL AVIV 001754 
 
SENSITIVE 
SIPDIS 
 
NEA/IPA FOR ASACHAR 
WHITE HOUSE PLS PASS USTR FOR SFRANCESKI 
CAIRO FOR BUZBEE 
 
E.O. 12958: N/A 
TAGS: ETRD ECON IS EG
SUBJECT: READOUT OF 14TH QUARTERLY MEETING OF ISRAEL/EGYPT 
QIZ 
 
SENSITIVE BUT UNCLASSIFIED, NOT FOR INTERNET DISTRIBUTION 
 
¶1.  (U) SUMMARY:  Israeli and Egyptian trade officials met on 
Sunday, August 10 in Jerusalem for the quarterly meeting of 
the Qualified Industrial Zones (QIZ).  Egypt requested 
Israeli assistance (and a possible joint delegation visit to 
Washington) to promote Upper Egypt's inclusion in the QIZ 
areas to the United States Trade Representative (USTR). 
Egyptian exports to the United States under the QIZ remain at 
about 18 million USD, which the Egyptians attribute to a the 
slowdown in the United States.  The GOI requested that the 
Egyptian delegation encourage a visit by the head of the 
Egyptian Manufacturers Association.  A case of possible fraud 
was discussed extensively and GOI officials will further 
investigate before any decision is reached.  Three new QIZ 
companies were approved and 59 QIZ certificates were renewed. 
End Summary. 
 
¶2.  (U)  Expansion into Upper Egypt remains very much a 
priority for the Egyptians.  Egypt is encouraging Israel to 
approach USTR jointly in Washington to lobby for the 
expansion, particularly after learning that the head of the 
Israeli delegation, Gabi Barr, of the Ministry of Industry 
Trade and Labor, accompanied the Jordanians on a similar 
visit for QIZ expansion.  Israel, for its part, is willing to 
assist the Egyptians.  Egypt is concerned that once the 
current administration leaves it will be more difficult to 
receive approval for the expansion. 
 
3  (U)  Egyptian exports to the United States under the QIZ 
remain at the same level as the first quarter, 18 million 
USD.  Both Israel and Egypt attribute this decrease from last 
year to the economic slowdown in the United States.  Barr 
told econoff that Israeli manufacturers were also interested 
in exporting to the European market to fill in the gap left 
by a lack of orders from the United States. 
 
¶4.  (U) Barr also mentioned that during the last quarterly 
meeting in Cairo, the head of the Egyptian Manufacturer's 
Association, El-Zorba, indicated his interest in increasing 
ties with the Israeli manufacturing community.  The GOI 
followed up by inviting El-Zorba to visit several Israeli 
factories and meet the head of the Israeli Manufacturers 
Association Shraga Brosh.  El-Zorba has yet to respond to the 
invitation, and the Israeli delegation requested that the GOE 
follow up with him.  El-Bous, head of the Egyptian 
delegation, confirmed that El Zorba had received the 
invitation, but remained noncommittal as to whether he would 
make the visit to Israel or not. 
 
5 (U)  A case in which an Israeli company sent fabric 
imported from China to be manufactured in Egypt and then sent 
back to Israel for resale was discussed extensively.  It was 
agreed that too little was known about the business practices 
of the company and further investigation was required. 
Although Israel and Egypt encourage this type of trade, both 
parties agreed that sending products back into Israel for 
resale was not in compliance with the QIZ. 
 
6 (U)  Three new QIZ companies were approved for the program 
and 59 QIZ certificates were renewed. 
 
 
 
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