Potential for strikes still threatens Egypt-Israel trade

Social upheaval could cause further work stoppages.

Egypt clashes 311 (R) (photo credit: REUTERS)
Egypt clashes 311 (R)
(photo credit: REUTERS)
Some Egyptian companies still face the possibility of strikes due to ongoing social upheaval in the country, which in turn could affect work in Egyptian-Israeli free-trade zones, an Industry, Trade and Labor Ministry official said Sunday.
“They [Egyptian workers] have discovered union power,” said Gabby Bar, head of the ministry’s Middle East department.
“The Egyptian owners of the factories are now ready to negotiate, because they understand that otherwise there might be a strike that will cause damage to their factories.”
“Now [the workers] understand that they can make demands to increase the salaries,” he said. “You have to remember that their salaries are $80 a month per worker.”
Egyptian factories that use products from Israel under a US-sponsored trade deal have resumed work, after being closed for a month following the overthrow of former president Hosni Mubarak, Bar told Israel Radio on Saturday.
On Sunday he said continuing strikes were internal problems that were unrelated to Egypt upholding its trade agreements with Israel.
Ten Qualifying Industrial Zones were established in Egypt in 2005 following a deal between former Industry, Trade and Labor minister Ehud Olmert and his Egyptian counterpart, Rashid Muhammad Rashid. Based on a similar accord between Israel and Jordan from the late 1990s, the deal allows Egypt to send dutyfree exports to the United States, so long as their origin is at least 10.5 percent Israeli.
The value of Israeli exports to Egypt totaled $140 million in 2010, of which more than $100m. came from raw materials sent to the QIZs in Egypt, Bar said. As a result, Egyptian exports to the US totaled more than $1 billion in 2010.
Two more QIZs are being planned for upper (southern) Egypt, subject to US approval, Bar added. Of the existing ones, four are in the Cairo area, four in the Alexandria area and two in Port Said.