The Egyptian Minister of Industry and Foreign Trade, Eng. Rashid Mohamed Rashid, has recently concluded with the USA Administration efforts to begin negotiations on establishing a FTA agreement with the USA, as well as, opportunities of creating the QIZ agreement which is similar to the QIZ signed between Jordan, Israel and the USA. The Jordanian QIZ agreement has managed to create new job opportunities (mainly to Asian labor) and attracted new investments from India and China which has build in a short period several industrial sewing facilities to supply the USA market, which has dramatically increased the Jordanian exports of apparel to the USA from USD 52 millions in year 2000, to USD 583 millions in year 2003.
Minister of Economic Affairs at the Israeli Embassy in Washington Boaz Raday said last week that negotiations for the establishment of a joint Israel-Egyptian industrial zone were nearing completion. The industrial zone will produce textiles for the US market. Raday denied a “New York Times” article from Thursday that claimed Americans feared that the import of cheap textiles from the Middle East without quotas or customs duties would harm the US textiles industry. Raday said, “Negotiations between the three countries are in an advanced stage, and we expect the negotiations to reach a successful conclusion within days. To the best of our knowledge, the information reported by The New York Times is incorrect.” He said Egypt minister for trade had met US officials in Washington on November 15, adding, “So far as we know, the talks were good.”Finalizing the QIZ between Egypt, Israel and USA, Egypt exports of woven and knitted apparel to the USA is expected to exceed 2 billion USD by the end of 2007 which is mainly due to the existence of an apparel sewing industry unlike the situation of Jordan. The Asian foreign investments in Egypt and in particularly in apparel sewing is expected to increase in parallel to take advantage of the availability of low cost labor, energy and infrastructure . Unlike other countries in the region, Egypt is the only country within the Middle East and Northern African countries that has a vertically integrated industry with the availability of fibers (Egyptian Cotton), spinning industry, dyeing and Finishing, apparel and home textile manufacturing. More than 60% of fiber consumption in Egypt is Egyptian Cotton, picture which is expected to change with the FTA agreement with USA. As the textile export production from Egypt and other countries exercing the FTA with USA increases, there will be a generated demand for the the imports of American Upland cotton, which is expected to increase dramatically. Therefore, Egypt vertically integrated structure, can be in a great benefit for the the whole region, expecially for the countries with no primary textiles, complementing Egypt to become the regional hub for primary textiles supplier. Accordingly, Egyptian manufacturers and exporters of home textiles will be the main beneficiaries of the FTA and the QIZ agreement which will be mainly attributed to the recognized reputation of the Egyptian cotton by consumers in the US. The exports of terry towels and bed sheets has exceeded 115 Million USD by the end of 2003.