VZCZCXYZ0000
PP RUEHWEB

DE RUEHEG #2404 3291259
ZNR UUUUU ZZH
P 241259Z NOV 08
FM AMEMBASSY CAIRO
TO RUEHC/SECSTATE WASHDC PRIORITY 0907
INFO RUEHAM/AMEMBASSY AMMAN PRIORITY 1981
RUEHTV/AMEMBASSY TEL AVIV PRIORITY 1798
RUEHJM/AMCONSUL JERUSALEM PRIORITY 1084
RHEHAAA/WHITE HOUSE WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY

UNCLAS CAIRO 002404 
 
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 EFIN ETRD EINV PGOV PREL IS EG
SUBJECT: NEA/ELA DIRECTOR DISCUSSES QIZ EXPANSION WITH 
MINISTRY OF TRADE 
 
¶1. (U) Summary: In a meeting with NEA/ELA Director Nicole 
Shampaine, officials from the Egyptian Ministry of Trade and 
Industry expressed their frustration with what they felt was 
excessive delay in United States Trade Representative's 
(USTR's) consideration and approval of a 2007 request to 
expand Qualifying Industrial Zones (QIZ's) to Upper Egypt. 
They emphasized that the expansion was aimed at social and 
economic stability in the poorest region of Egypt, and that 
the composition and volumes of potential duty-free imports 
into the US were not threats to US producers. End Summary. 
 
¶2. (U) On November 17, NEA/ELA Director Nicole Shampaine and 
econoff met with Ali Awny, QIZ Unit Head in the Ministry of 
Trade and Industry, and Sayed Elbous, Minister 
Plenipotentiary and Sr. Advisor to the Minister of Trade and 
Industry to discuss the GOE/GOI proposed QIZ expansion into 
Upper Egypt.  Both Awny and Elbous expressed concerns that 
the US would not act on their proposal in the remaining days 
of the current Presidential administration, and that the 
Obama administration might not be able to focus on this issue 
for a long time. 
 
¶3. (SBU) Elbous expressed his frustration with what he 
considered the United States Trade Representative's (USTR's) 
unwillingness to respond to this request, initially made last 
year. He said that they have provided all of the information 
that they can to USTR and that the USTR is asking for 
detailed long-term planning information that doesn't exist 
and cannot be collected.  Elbous reiterated the GOE position 
that the proposal would have several benefits, including 
increasing support for normalization of Egypt-Israel 
relations in a conservative region of Egypt, and increasing 
social and political stability in Upper Egypt. 
 
¶4. (SBU) Awni and Elbous both emphasized that expansion of 
QIZ's was not a threat to US industry. Egyptian producers, 
they said, were not competing with US textile companies but 
were merely trying to maintain market share in the face of 
stiff competition from China and the Far East.  They also 
suggested that the expansion would enable expansion of 
non-textile exports such as dried foods.  The proposed 
expansion of QIZ's, according to Awny, was also targeting 
existing QIZ firms to encourage them to relocate from the 
Delta and Greater Cairo to Upper Egypt, in order to take 
advantage of labor surpluses in the area, one of the poorest 
in Egypt. As a result, they explained, there would be minimal 
net increases of exports from those firms.  Shampaine said 
she would follow up on this issue with USTR. 
 
¶5. (U) This cable was cleared by NEA/ELA Director Nicole 
Shampaine. 
SCOBEY