Political tensions lead to stagnant Israel-Egypt trade

JERUSALEM — Exports to Egypt declined last year "due to signals from the Egyptian government" and the imposition of various barriers, the Federation of Chambers of Commerce said Sunday.

"There wasn't a single trade delegation from Egypt last year," and there were very few visits from businessmen, said Mandy Barak, head of the federation's international department.

Egyptian Ambassador Mohammed Bassiouny said Sunday that bilateral trade stagnated in 1997 due to the political atmosphere, after years in which trade volume doubled annually.

In 1997, exports to Egypt dropped 5.3 percent to $54.8 million, while imports from Egypt totaled $30.4 million, an increase of 21.3 percent, Barak said, noting that some imports, especially food products, are actually destined for Palestinian Authority areas.

Economic relations with Egypt began stagnating after the arrest for espionage in late 1996 of Israeli textile worker Azzam Azzam, and the detention in Cairo last summer of Israeli businesswoman Dvora Ganani, Barak said.

"There are people who are afraid to go there to make new contacts and deals."

According to Barak, the Egyptian government issued an order that importers must show documents proving that Israeli products are not produced in the territories or the Golan Heights. "This scared many importers, and is yet another barrier to trade."

Bassiouny denied that his government is doing anything to discourage business with Israel. He said all Israelis are welcome to do business in Egypt, "as long as they respect the law."

Trade expansion has stopped "because there is a stalemate in the peace process," he said. "The private sector is affected by the political situation and the peace process."

"There is a big difference between peace and the fruits of peace," Bassiouny said. "When Egypt made peace with Israel, we did not aim at a separate peace. It was the first step at a comprehensive peace. Economic relations will be much better under the umbrella of comprehensive peace."

Bassiouny said cooperation in agriculture is going well, and Egypt is supplying Israel with around 20 percent of its crude oil.

Trade with other Arab countries has also been declining, Barak said, with exports to Tunisia dropping 88 percent in 1997, from $3 million to less than $500,000, and to Morocco by 21.9 percent to $4.8 million.