Thursday, November 18, 2004

A Good Deal Goes Begging

The New York Times
November 18, 2004

A Good Deal Goes Begging

Last week, President Bush professed a desire to see a true peace in the Middle East, one where Israel can live alongside its Arab neighbors in serenity and harmony and all other good things. So why in the world is his administration holding up a trade deal between Israel and Egypt that could increase economic cooperation between the two countries?

Back in 1996, Congress passed a law giving Jordan and Egypt duty-free access to some parts of the American market if those products included some Israeli content. The point of the law was to encourage commercial ties between Israel and the Arab world, and to weaken the Arab boycott of Israel. Jordan embraced the law and set up special industrial zones for textile exports that included Israeli content, like zippers and fabric lining. Egypt, for its part, dallied for years; Egyptian officials cited the Palestinian intifada as one reason why they didn't want to be seen as embracing Israel.

But this year, Egypt finally came to its senses. The coming end in December of the United States quota system that has protected textile manufacturers from Chinese competition may have had something to do with the Egyptian turnaround. But whatever the cause, Cairo has agreed to establish special trade zones for duty-free exports to the United States. Such exports - mostly clothing and textiles - would include 11.7 percent Israeli content. Israel and Egypt quietly signed the pact in September. Great news, right?

Wrong. United States trade officials haven't approved the deal, citing concerns that it could hurt American textile and apparel companies. Apparently peace in our time isn't quite so important after all, especially not when measured against protecting important political constituencies.