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Israel-Egypt trade links may help limit any rupture in ties

Israel and Egypt have cooperated on a natural gas pipeline and Israeli-owned textile factories that employ thousands of Egyptians. Such links could be key to preserving a cold peace.

By Correspondent / February 10, 2011

A tour boat sailed down the Nile River past the burned National Democratic Party building in Cairo Wednesday.

Ann Hermes / The Christian Science Monitor


Tel Aviv

Even as most of Israel frets about the possibility that a new Egyptian government might downgrade the bilateral relationship, one group remains upbeat.

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Israeli businessmen with activities in Egypt still believe that the economic foundation of the peace between the two countries will help stave off a rupture in ties.

Though trade remains minimal because of the cold peace, the two countries have cooperated on a natural gas pipeline and Israel-owned textile factories that employ thousands of Egyptians to manufacturer clothing for export. The US has also added incentives for Egyptian businesses that use Israeli raw materials. The economic benefits of such links may deter any future government that emerges from Egypt's unrest from breaking off ties with Israel.

"Economics wins everywhere in the world. The peace with Israel means money,'' says Oded Beit Halachmy, who established an Egyptian factory owned by Israeli textile company Delta Galil Industries, which once employed 5,000 workers plus another several thousand in related businesses. "The $2 billion in aid comes from the US as a result of the peace process. Even if the Muslim brotherhood will be in the government, they will talk against Israel, but they will accept Israeli factories.''

Business affected by unrest in Cairo

With most of Egypt paralyzed by the massive antigovernment protests of the past two weeks, the few economic links with Israel were also affected: Textile factories were closed because workers couldn't commute. And a natural gas pipeline was shut down after a militant attack on Saturday.

"It is important to have trade to cement the peace,'' said Dan Catarivas, who heads the international relations department at the Israel Manufacturers association. "We are trying to separate politics from business, but there is no question it isn't always possible.''

Israel is still waiting for Egypt to fix its natural gas infrastructure so gas flow can be renewed in the wake of the attack. The pipeline represents a major link between the neighbors, giving Cairo foreign revenue and Israel cheap energy.


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